BT Has Same Cost Problem as AT&T, Verizon, CenturyLink

BT has said that there is a commercial case for it to upgrade about two thirds of its national network to fiber-to-the-cabinet and fiber-to-the-premises networks. The rest of the country, though, is too sparsely populated to justify wholly private investment, BT insists.

People sometimes forget how sensitive infrastructure costs are to the vagaries of population density, terrain, soil composition and duct or pole access. In the United States, as elsewhere, loop length (distance from customer location to the nearest central office) is inversely proportional to population density. So are capital requirements. The cost of serving the last 10 percent of customers is extraordinarily high compared to the cost of reaching the most-dense 30 percent of locations (click on image for larger view).

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