Peter Asman is Managing Director Public Sector and Enterprise at U.K. fiber network provider Neos Networks. He was interviewed by Fierce Telecom’s Senior Editor Diana Goovaerts on Tuesday, December 14, 2021 during Fierce’s Digital Divide Summit. During the event, he addressed fiber’s role in helping bridge the digital divide, including how governments and the private sector can work together and the alt-net model.
This transcript was lightly edited for clarity.
Fierce: So, I have a couple topics I want to touch on with you. Obviously, the topic of this whole summit is the digital divide. Something interesting that is happening in the U.K. is called Project Gigabit. Can you tell us a little bit about that - what that is, what that includes, who's working as part of that?
Asman: Of course I can. No problem at all. So, Project Gigabit came out the back of trying to give, uh, internet access to our rural areas across the United Kingdom. So, if you look at some parts of the U.K., you just couldn't pull copper or fiber out to the houses ‘cause they were just too far out. So it was the, you know, these small villages and hamlets that we had across the U.K., they were really struggling to get connectivity to them. So Project Gigabit came at the back of something called you know, the great British broadband journey, which is actually taking them down, taking these villages and giving internet access to every single house within the U.K. So Project Gigabit was kind of born out the back of that. And there was about 5 billion pounds worth of funding that was put into that by the government, which as I say it was all about extending that out to the rural areas and making, say, making internet access available for everybody in the U.K.
Fierce: And so how does it work when a private company is working with a government entity on these kind of broadband rollouts? Is it a public private partnership? Is it some sort of other arrangement?
Asman: Very much so. So, give you a few examples. So Oxford, we all know, heard of Oxford University. Oxfordshire, which is the, the whole state as it were that sits around Oxford came to market, looking to enable some of their smaller towns and villages with internet connectivity, but at the same time, making sure that it was future proof. So there was some big fat fiber pipes there so that when you needed to demand more data or more data flow in the future, the pipe work was there so they don't have to constantly go and rebuild and rebuild. So what they do is they'll look at, um, a number of different areas, Project Gigabit, as it were, at the DCMS - Department of Culture, Media and Sport – to run Project Gigabit would give an element of funding to that particular area where there isn't any fiber. So they can say, right, okay in your particular shire, your particular state as you call in the U.S., there's a certain area here where there's absolutely no fiber at all. So we'll fund that fiber build. However, we know that BT, Virgin Media business, one of the other alt-nets are built over here. So you need to go and build a sort like a structure with them to be able to pull it all together.
There’s two elements to the build that are really, really important. There's obviously the spine network, having the infrastructure, the big fat infrastructure, the exchange-to-exchange infrastructure in the ground. That's where Neos Networks really comes into their own. Our network covers 34,000 kilometers of the country and we can cover that so effectively the shire, the council can buy those services from us with some of that funding. And then also what we can do is we can bring in the alt-nets, the ones that do the fiber to the homes, and they can either come and put fiber into that particular area, or we can use the BT, the big, uh, the big carrier over here to be able to pull it together.
So it's a bit of a consortium of organizations that come together to able to really deliver that, I suppose, that fiber, that real strength and depth, the fiber to the ground.
It’s a bit of a disastrous way to talk about it, but COVID was a bit of a nightmare where everybody was working from home and, you know, poor mums and dads were having to, you know, try and teach their children from home and there was no connectivity there. So this all got massively accelerated. And if anything, what the, I suppose, the British government was thinking about, you know, five years ago was, you know, what, if everybody was pushed to home, what if we actually, you know, give everybody full connectivity to the home, to fiber, to the home as it were. So I can own my little house now in the country, I can have up to a hundred gig coming into my house if I need it.
According to my kids, I need it, but I certainly don't think I do, but we can have absolutely everything running across here. Absolutely no connectivity issues at all, no problems with pushing and pulling. So it was very clear that DCMS wanted to make sure that there was a lot of private entities involved in all of this. It was very important that they were bringing up the main funding for the areas that weren't, that didn't have fiber, but making sure that they fitted into the current infrastructures and networks that Neos Networks have to be able to extend that and actually give that full depth that they actually need so that you can have fiber to a country home like mine.
Fierce: Okay. I heard you mention alt-nets and I know that is a big thing in the U.K. and Europe. Can you tell us a little bit more about those where they fit into the puzzle? What the kind of business model looks like? I mean maybe from your perspective. I know you guys are the backbone provider.
Asman: Yeah, sure. So, um, I suppose multiple different ways you can, you can actually argue that, I suppose, that Neos Networks is an alt-net. You know, we're an alternative network to the main big carrier, which is BT in the U.K. So effectively it's around creating competitiveness to the market. But what BT are not doing is – they've got a fiber network that will go to majority of the homes in the U.K. So they are under a regulation to be able to deliver a telephone line to every single home in the U.K. But they're not under contract to deliver a fast internet access to the home, you know, so that's why you get that 10, 15% of the U.K. homes that didn't have that connectivity. So alt-nets came out the back of those 10 to 15% homes that couldn't effectively get that.
They said, actually, if we work with Neos Networks, we could pull fiber to these homes. And actually we could look at our revenue model over a period of 15 to 20 years and say, well, that home's gonna have that connectivity. They're probably not gonna move it because if they get a fiber pipe and they're unique within that town, they put a fiber, a fiber pipe going into that house like I have in my home. Um, there's gonna be no difference between actually them staying there for a year or staying there for 15 years. So they could see their revenue models coming back in quite good terms. So all of the sudden you are starting to expand that fiber network out. So if you think about the way that actually started, yes, it was all about giving fiber connectivity to the homes that couldn't be reached from an internet perspective, from a data perspective, by the big BTs. Now it's gone so much further than that. Now it's gone actually out to all the rural areas, where you're getting that as well.
All the new builds that are coming in a lot of the towns now, the bigger towns that always had that BT copper infrastructure are now saying no, we want fiber in the ground. And because the regulatory isn't investing in that, private and DCMS funding – the Project Gigabit funding – are actually expanding out the back of that. So what's happened is there’s lots of these we call them alternative networks that are popping up everywhere. Now they seem to be very regionalized apart from us, we are nationalized, but they're quite regionalized. So you get Gigaclear, which is one of our partners across the Oxfordshire area. They do a lot of the fiber to the homes there and because they have the infrastructure there, it makes sense for them to connect up a few of the smaller businesses. They don't have really big fat fiber pipes like we would, but they have that opportunity to link into the exchanges.
So a lot of these regional alt-net networks have popped up. So what they're doing is they're giving that connectivity play, which is so important now to the home, to the small businesses. So internet access or data flow is no longer a problem. Don’t get me wrong, it's still being supported and held together by the, you know, the big BTs of the world, that big infrastructure, cause they still have a huge play in it and by the Neos Networks. But all of a sudden where it was before really difficult to get connectivity out to these houses, these alt-nets are seeing a real strong business case to actually pull their infrastructure. And with the DCMS, the Project Gigabit funding, as well as some private money, and they're looking at that return on investment over 15 years, there's actually a real strong business case for them to do it. So there's a lot of them popping up and they're doing it.
Fierce: Just a quick follow up on that. I mean, do you feel that alt-nets make a difference at all or maybe better phrased, how do you feel alt-nets impact, you know, rural broadband buildouts? Do they help speed it up? Is there any sort of dynamic at play there that, that maybe we should think about as we think about this in the U.S. and in other countries as well?
Asman: The quick answer to that is yes, absolutely. They speed up deployments of fiber in the ground. Alt-nets will make money once the connection is made. When you're looking at a regulated market, they'll kind of get to it when they get to it. Whereas if you look at an alt-net that would pop in a town with maybe 1,500 houses in it, they only start making money when the connection is made. So they'll need to get in there, they need to connect it and they need to sell it. So they need those contracts up and up and going. So as any private entity, once they get into it, they'll look at their revenue models, the quickest they can get to revenue the better. So what you're finding is that they are getting quicker to revenue now because of the Project Gigabits that are funding them to get there and they're coming up with, they can actually see a business model that actually really fundamentally better than what they're getting from the really big carriers. They're getting the support they need, they're getting the fiber to the house. The poor mums and dads are teaching all the kids at home. You know, guess what, they can have multiple different iPads and multiple different laptops and multiple different Netflix running in the background and it's not gonna run out because that infrastructure's there. So all of a sudden there's real value for what they're trying to sell.
So they are. It's all about generating that revenue for these private – that's where the private companies do come into their own is actually, we gotta make money, we've gotta drive revenue out of this. And that's why they're really popping up. And they're actually, yeah, they can deploy so much quicker and so much faster. They can deploy the people and get there. So that's what we're finding that they can get it up and going so much quicker. Also the big companies are not doing fiber to the home. They're doing the old infrastructure. They've got a lot of sunk cost that has gone into a lot of infrastructure build as well, so they're not gonna be putting new infrastructure in play. We know BT aren't. But you know, we are across our exchange-to-exchange network, but a lot of the alt-nets are pulling brand new networks to the homes to actually make them, you know, connectivity aware.
Fierce: Okay. I wanna switch gears for a quick second and talk about where fixed wireless fits into the coverage puzzle, especially as it relates to rural builds. So, I know at least here in the U.S., there are just some parts of the country where fiber's just not really feasible for a variety of reasons. I'm sure it's the same in certain of other countries as well. So where do you see fixed wireless fitting in, briefly?
Asman: So that's all a part of the, the whole smart revolution that we seeing around telecoms. If you think about the five different steps that you need to be able to create a smart town, a smart village, a smart city, what you need, you fundamentally need that wireless connectivity, which is probably one of the most important parts. You need the foundation, need the pipe work in the ground, its what we do, the Neos Networks. You need to have the connectivity piece and that's where private networks and the wireless connectivity really comes into it. So that's the 5G, the 4G, the private LTE, the ZigBee, the Bluetooth, the WiFi, the secure mesh kind of infrastructures that really do come into it. And that's that private kind of cost of network that will, you know, I suppose, put an umbrella over a town that may be relatively rural.
Given that connectivity back, you're then starting to say that, you know, the boost of industrialized IoT, being able to put sensors all over the world to be able to monitor and manage things better. Whether there's a storm coming, so you can actually manage water flow or wind flow or rain or whatever, you can do that. You need to have the software to make it all hang together. And then you need to have the security across as well. So the software and the security need to have a form of connectivity.
You're absolutely right, fiber's not going to go absolutely everywhere in the U.S. So you need to have that private, I suppose, that wireless connectivity, that private network that you need. But to have that core infrastructure, which I know you guys have got and connecting to that is really important. So I do see there's a real, there's a real opportunity around that, but very much around the smart development, the smart city, smart place kind of area what we're getting into. So industrialized IoT and smart cities is what I'm talking about there.
Fierce: Okay. Speaking of smart things, we have a couple minutes left and I just wanted to kind of delve into the idea of smart agriculture, because especially in a rural context, that's something that's really kind of popping up as a key trend or a key topic. So what do you think about smart agriculture? And I think there's this concept called the smart Shire. So can you tell us a little bit more about that and what that all is all about?
Asman: It’s a little bit of what I just talked about, right. So it's creating that smart environment, that umbrella of technology that goes across the top. So, you know, it's almost like you can deploy any kind of industrialized IoT platform, whether it's agriculture, whether it's anything, if you have the connectivity play in place. We don't have that much need for massive smart agriculture in the U.K., but I know you do in the U.S. because your fields and your agriculture is so much bigger than ours. So there is a drive to be able to do that. And you do see a, a multitude of different innovations coming out, you know, with the self-driven, drone driven combine harvesters to be able to pull in crops or being able to monitor livestock without actually going to see that.
So, you know, being very much more of a control center to manage rather than someone going out and doing the job. There's a multiple of different sort of social awareness reasons we need to talk about that, but at the same time if you've got the connectivity there, whether it's that wireless network we just talked about or that fiber in the ground, all of them become available. You can start to actually drive innovation across any particular sector, not just agriculture. So agriculture's a great one because the size and scale of what you have to do. All of a sudden you can actually to monitor crops, monitor stock so much easier with actually having to go out and see it for yourself. So the farmer is actually starting to, dare I say, be a little bit more techy rather than he was before, when it was coming down to driving technology and innovation into that because you can do so much more with this stock. It doesn't need to employ that many more people to be able to do the job. We’re not massive over here with smart agriculture, if you want, because we're not as big. But I can see how there's a real value to that in the U.S. And I can see how having that stack, that infrastructure in place, that smart infrastructure in place really helps and having that connectivity piece is really important.
Fierce: In 30 seconds or less, what do people need to do if they want to bring that connectivity to their, farm or their city. Do they contact a company like you or are they going to be going through the government, through those public private partnerships?
Asman: So it's going through a private company to be able to get it up there. The government, they will fund these kind of activities, because you can see the value it. But it's the private companies that are gonna know how to tap into that fund. And that's what we are seeing with the alt-nets over here. They know how to tap into that DCMS fund, the Project Gigabit, to be able to do so much more with connectivity.
Fierce: Excellent. Well, Peter, thank you so much for joining us and for sharing your insights. We are so grateful to have had you.