Fujitsu has hatched a plan to build an open access fiber-based broadband network in the rural UK with service provider partners TalkTalk (LSE: TALK) and Virgin Media (Nasdaq: VMED) and vendor Cisco (Nasdaq: CSCO).
Touted as a "groundbreaking and innovative alternative" to BT Openreach's (NYSE: BT) own rural fiber broadband effort, Fujitsu's plan will deliver fiber-based broadband to about five million rural sites. Ultimately, the Fujitsu-led group would like to tap into the UK government's £530 million ($866.5 million) it has set aside to bring fiber-based broadband services to rural areas.
As an open access wholesale network supported by Cisco's gear, TalkTalk and Virgin will buy wholesale capacity on the network to bring broadband services to rural UK towns. While TalkTalk and Virgin are the first service providers interested in the network, other competitive carriers will be able to also buy wholes services to deliver services.
However promising Fujitsu's plan is, MF Global analyst David Hogg believes the vendor will face a number of challenges in trying to get a piece of the UK's fund. Not only does Fujitsu lack the "economies of scale to help it in its bidding efforts" that UK incumbent operator BT has, but it was also was also an original bidder on the faltering National Health Service contract "so the U.K. government's predisposition toward Fujitsu is unlikely to be positive."
- Wall Street Journal via Dow Jones has this article
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