Comms Business talks to Rob Hamlin, Commercial Director of CityFibre to establish why the Channel should be taking note of dark fibre and what sort of benefits it can offer above other wholesale connectivity options.
Q. Why is dark fibre becoming more popular with the Channel?
A. Dark fibre is a platform for innovation and change. It gives CPs of all sizes more agility and greater power over the solutions they offer to their customers. They’re no longer hampered by the long lead times associated with managed service upgrades or restricted to building connectivity products based solely on those services. Instead they can use their channel expertise and insight to develop end-to-end solutions that respond better to customer’s needs, differentiate their businesses and boost margins.
Using dark fibre to specify and build their own services gives full control, network visibility and security choice to CPs. It allows them to guarantee the elimination of all non-dedicated middleware and bid in with technology based solutions – even if their own customers are application focused.
Q. What about differentiation and margin opportunities?
A. Full control over product/solution build means CPs can choose to offer far superior service levels to some customers – for which they can charge a premium – while simplifying services for others – effectively stripping out cost to make them more saleable to the masses.
They can decide what the upload/download ratios are and whether a service is dedicated or shared. They can also deploy equipment that meets needs more precisely – rather than using ‘best in class’ equipment ‘as standard’ with some customers paying for functionality that they won’t utilise.
Dark fibre can help CPs improve margins by consolidating existing networks/services, building for scale and, most importantly, breaking the link between cost and bandwidth by giving them full control over the speeds they supply, customer-by-customer, day-by-day.
We’re already seeing our dark fibre partners doing exactly this. For example, at a recent gaming conference our partner Commsworld were able to dial up the bandwidth to 10Gbit/s – just for the duration of the event.
Q. How do you see the market evolving?
A. Dark fibre offers virtually limitless bandwidth capability – perfect for meeting the inevitable, future, multi-gig bandwidth demands of organisations of all sizes. It’s not for everyone of course. Designing and deploying solutions based on it requires in-house (or outsourced) technical and operational capabilities that many will not have. Others will simply not want to play in this space. But that doesn’t mean the market won’t fundamentally shift for them too.
Even if a CP doesn’t want to consider the opportunities presented by dark fibre, they are still likely to end up competing against a new wave of differentiated services from those who do – or grasp the opportunity to resell them. Others will see an opportunity to lead the way– potentially developing into aggregators/wholesalers themselves and rapidly discovering new ways to grow their business.
In the market generally, we’re likely to see consolidation and strategic partnership. Smaller CPs who show innovation in the dark fibre space are likely to become attractive to larger players who may wish to partner, merge or even acquire their business models and expertise.
We’re also likely to see the emergence of dedicated intermediaries; a new breed of companies with the technical wherewithal needed to engineer platforms over a dark fibre infrastructure and unlock its potential for larger groups of CPs. Where these innovators operate in distinct regions, we may start to see the emergence of different types of end user connectivity products in many areas of the country.
Q. What is your take on the latest rules Ofcom has imposed over BT with regards to its dark fibre network?
A. We welcome the prospect of a healthy competitive environment with genuine choice throughout the supply chain – from infrastructure provider to end customer. A regulator’s role is to encourage that choice, but mandating BT to provide something that they will only provide reluctantly is, in our view, not the answer.
Regulated products are restrictive by nature and an incumbent operator who doesn’t want to make dark fibre available is unlikely to deliver beyond the scope of the immediate requirement. Regulation itself also has a controlling ‘knock-on’ effect for those (like CityFibre) who are willing to compete; stifling the very choice and innovation that Ofcom should be driving for.
The alternative is to encourage competitive investment in networks, allow this to stimulate demand and itself create an environment where BT recognises, embraces and chooses to respond.
A healthy competitive market that nurtures and welcomes innovation from different suppliers is, in our view, the only thing that will change the long-established status-quo and provide free choice for all.