In the UK, major telecommunications companies, such as BT, as well as alternative network providers are investing heavily in building fibre either independently or as part of a consortium, backed by infrastructure capital. The UK government estimates the cost for completing this development will total around £30 billion ($US42.5 billion).1
In the United States, the digital landscape is both similar and different, as operators have maintained vertical integration. This has led to the rise of smaller, independent wholesale challengers entering the fibre market. There are also many cable operators, whose networks are typically newer than the legacy copper-wire providers. The increased speeds these offer has led to a slower adoption of a network overhaul to full fibre.
Della Pasca says that a key driver for change in the US market is the increasing need for greater upload, as opposed to download, speeds. This is the being led by the rise of video conferencing and more interactive, social forms of online activity – such as gaming. Here, fibre and new infrastructure has the distinct advantage over cable networks. As a case in point, in March 2021, RVA reported that over $US60 billion of investment is expected in fibre-to-the-home (FTTH) in the US over the next 5 years, which is “about twice the size of any previous FTTH forecast from the firm.”3
Oliver Bradley, Managing Director of Digital Infrastructure Investing at Macquarie Capital, notes that, “building these fibre networks quickly requires enormous amounts of capital as well as industrial scale resource. In some markets, this has driven telecommunication companies to partner with infrastructure investors to help share the burden of this capital expenditure, and ease the pressure on their balance sheets”.
But the investment is necessary. Not only is greater data consumption a result of more commercial and household connections, but machine-to-machine (M2M) connections – themselves largely a result of the increased take-up of the internet of things – is also growing. By 2023, IBM anticipates that M2M connections, such as smart meters, video surveillance, healthcare monitoring, transportation and package or asset tracking, will account for around half of all devices and connections.3 This, IBM says, will be made possible by the increasing of 5G networks, as well as cellular advances and widescale Wi-Fi upgrades.