Net profit

Despite this year’s recession, the progressive development and expansion of broadband networks has continued at a sustained pace. Adoption of the service has been steadily growing throughout the year as consumers and businesses now consider broadband internet speeds to be the industry standard, with many users feeling that high speed internet is an indispensible addition to their life or business model.

The importance of internet access has been firmly at the forefront of the public imagination in recent months, chiefly due to the ongoing debate over peer-to-peer sharing and the attempts of various governments around the world to regulate what has been a fairly open market, with a number of countries declaring internet access to be an essential human right.

However, while the market has remained stable, the proliferation of internet service providers, coupled with a relatively saturated market, has meant that many new customers are actually making a switch from another ISP. BT, which provides the physical infrastructure for the vast majority of these services, resells DSL internet services to over 750 providers, according to a recent Ofcom report.

“ISPs have generally proven to remain resilient despite the state of the economy. In certain markets, for example residential, competition has inevitably intensified as the larger consumer players such as Sky, O2, Virgin, TalkTalk et al have vied for market share,” observes Entanet’s head of marketing, Darren Farnden. “The market’s essentially at a point where the majority of new signups are based on customers moving from one provider to another on the basis of price, features and service. Businesses, meanwhile, continue to adopt broadband and higher speed connectivity solutions as the basis for improving the efficiency of their operations, empowering remote workers and regional offices and better managing costs.”

Andrew Ferguson, editor of broadband comparison website Thinkbroadband.com, agrees on the enthusiasm that business has shown towards broadband uptake: “Generally, as with 2008, the recession has not affected broadband take-up. Most consumers and businesses appear to realise the savings in terms of purchases and online billing, plus for small business it makes you much more accessible to your customers.”

However, he notes that the services that can be offered by ISPs are highly dependent on the infrastructure provided by BT Wholesale: “The network roll-out by the BT Group, which is how the group is offering ADSL2+ in some areas, has lead to some issues with people experiencing variable speeds, or less reliable lines.”

Despite the possibility of variable service due to infrastructure, BT has observed a high level of growth in the ISP sector, with its wholesale division recently moving into profit.

“We recently announced profitable growth for the first time in two years,” comments BT spokesman Simon Dux. “The key driver behind BT Wholesale’s return to profitable growth is the runaway success of BT Wholesale’s Managed Services business. In 2008, BT Wholesale signed Managed Network Solutions (MNS) deals worth £1.2 billion – and the momentum is continuing into 2010. Of BT Wholesale’s top 15 customers, ten have now signed long term managed deals.”

One of the key aspects of BT’s wholesale program, and other forms of private enterprise, is that the money generated is often reinvested into upgrading the physical network and the deployment of fibre optic cabling, allowing it to handle the kind of data transmission rate required by modern technology such as cloud computing.

The 21st Century Network plan – commonly referred to as 21CN – is a Government-proposed scheme that, like many modern Government initiatives, relies on private investment to raise funds and create the network, while the Government creates and modifies the legal infrastructure as the market develops.

BT’s commitment to the 21CN is the roll-out of fibre optic cable to UK households, in the form of Fibre to the Cabinet (FTTC) or Fibre to the Home (FTTH) networks. The fibre optic cabling provides a much higher rate of data transfer than traditional copper wiring, and while FTTC is currently deployed to a much higher ratio of the country, FTTH is also being trialled in specific locales.

“BT Wholesale is already providing fibre to the premise (FTTH) services – with burstable speeds of up to 100Mbps – at Ebbsfleet Valley, Kent,” confirms Dux. “Following customer pilots of fibre to the premise services – with speeds of up to 40Mbps and potentially 60Mbps – BT Wholesale will make fibre broadband services available to our customers in line with BT’s rollout plan. It aims to bring ten million UK homes and businesses in reach of fibre to the premise services by 2012.”

Another company to push the use of fibre has been Virgin Media, which has been working on its 50MB broadband proposition for the last year or so. Although this scheme does not solely utilise fibre optic cables, it has been praised for bringing higher broadband speeds to a large proportion of internet users.

“Virgin Media should certainly be applauded for pushing the fibre agenda – its swift roll out of a fibre hybrid service with genuine ‘up to’ 50Mb speeds certainly set the cat amongst the pigeons, and the response from the ADSL market has been pretty positive. ‘Up to’ 40Mb should be a reality for some ADSL customers in the new year,” comments Chris Marling, editor of the ISP comparison website Broadband Genie.

“This has an obvious knock-on effect on related technology too. Improved internet speeds will bring advances such as 3D TV and multiangle television nearer to commercial realisation, which is going to be huge for both entertainment and business in the coming years.”

Entanet has also made significant investments into the development of physical infrastructures, having installed gigabit ethernet multi-service interconnect links (MSIL) at each of the nodes that form the backbone of BT’s 21CN. The company is also now involved in the FTTC trials, utilising the ‘up to’ 40Mbps service.

“Over time these can be scaled up to 10Gbps,” confirms Farnden. “For commercial and operational reasons Entanet chose to do so at all of the nodes rather than a select few. Doing so also meant, therefore, that we had to extend the existing Entanet network by working with disparate carriers to create multiple links between each of the 20 locations. This resulted in us creating a resilient network infrastructure for our customers.

“In January 2009, Entanet became the first and only non-BT company to utilise IPStream Connect to deliver 20C ADSL connections over 21CN backhaul. This move required us to install further MSILs and allowed us to finally stop using traditional BT IPStream Centrals. The net effect of this was that we were able to launch, in April 2009, a new portfolio of unified ADSL and ADSL2+ products.”

ISP PROVIDERS
The following is a list of just some of the broadband providers that provide white label virtual ISP services for resale:

Entanet
www.enta.net
0333 101 0000

DSL Plus
www.plus.net
0845 1400 200

BT
www.btwholesale.com

Griffin Internet
www.griffin.com
0870 804 0804

Eclipse Internet
www.eclipse.net.uk
0845 1224 333

IDNet
www.idnet.net
0800 701 2000

Virgin Media
www.virginmedia.com
0845 840 777

123vISP
www.123visp.co.uk

VISPA
www.vispa.com
0844 979 8888

Broadband First
www.broadbandfirst.co.uk
0844 412 0820