C-level briefing: KCOM CEO Bill Halpert explains how fibre could help drive Hull’s reinvention as a high-tech digital hub.
BT is the national operator of the UK, but not everyone knows that through a strange quirk of the telecoms sector, the Hull and East Yorkshire has its own local provider in the KCOM Group.
In 1902, Hull City Council was granted a license to run its own telephone network. The other municipal telephone companies around the UK from this period were eventually absorbed into the Post Office Telephone department, later to become BT, while Hull’s remained independent.
KCOM essentially holds the same position in Hull as BT does elsewhere in the UK; it owns and operates the only substantial network in the city. Like BT, it also provides IT services and over-the-top applications.
CEO Bill Halbert explains that this has made the telecoms situation in Hull unique compared to the rest of the UK, and even that this quirk might be a key factor in powering the area’s economic regeneration as a high-tech digital economy.
"What [the network’s history] enables us to do, which is not impossible but extremely difficult to do economically elsewhere in the country, is deploy fibre all the way to the premise as opposed to deploying it to the nearest cabinet."
In December, CityFibre became the UK’s second largest wholesale broadband infrastructure provider after acquiring KCOM’s national network assets.
CityFibre bought all of KCOM’s fibre and duct assets outside of those in Hull and East Yorkshire, for £90 million.
These included 1,100 km of duct and fibre network in 24 UK cities, as well as 1,100 km of national long distance network that connects these cities to major data-centres across the UK and to internet peering points in London.
"The CityFibre decision goes back to 2008 when we started a transformational journey," says Halbert. "We had a national network outside of Hull which had been built post-flotation in 1999."
KCOM took the decision to leave the business of owning and operating a national network.
"That’s fundamentally a high capital-intensive scale game which I didn’t think was right to pursue," says Halbert.
Where KCOM needs access to network capacity to provide to its customers, it can buy it off a network owner and operator. KCOM did a deal with BT, where BT took over management of the KCOM national network and provided KCOM with national access.
In turn, when other providers want access to Hull’s infrastructure, they purchase it from KCOM.
Exiting the national network game allowed KCOM to refocus on its local investments.
In March, KCOM announced a £30 million investment in the Lightstream fibre network.
This will bring Lightstream to around 91,000 additional homes and businesses over the next 20 months, making it available to 148,000 local properties in East Yorkshire. This means total investment in KCOM’s fibre network deployment is around £60 million.
Indeed, Halbert thinks that fibre connectivity needs to play a key role in the future of UK telecoms: a recommendation that was also at the centre of the recent Ofcom Digital Communications Review.
Ofcom stated a desire to reduce the UK’s reliance on Openreach to create competition between fibre technologies and BT’s investment in technologies such as G.Fast.
"A major strategic shift will encourage the roll-out of new ‘fibre to the premise’ networks to homes and businesses," the report reads, "as an alternative to BT’s planned innovation in copper-based technologies."
For example, Openreach will be compelled to open its ducts to allow competitors to install fibre. In that regard, Halbert says that it is a matter of waiting to see whether they do so.
But because of KCOM’s unique situation, according to Halbert, the company is already "ahead of the review."
"We’re future-proofing the network in that ‘oasis’ of Hull and East Yorkshire."
According to Halbert, this fibre could be a key part of Hull’s future.
"Hull had a really strong economy pre-1960s based on fishing. The Cod Wars happened and the consequence was that it destroyed Hull’s economy. Hull therefore has struggled to recover ever since."
He adds that the city has also suffered because it is geographically isolated; it is in a corner of the country and not on a through-route.
"What we’re doing, putting fibre everywhere, is really important if you think about the potential to regenerate an economy like Hull into a digital economy," says Halbert.
Of course, Halbert says that the fibre network is not the only solution; KCOM is working in concert with initiatives in the city to boost its digital sector. This includes CD4I, a high-tech hub which he says is "trying to encourage the kind of thinking and development that goes on at Silicon Roundabout in the City of London.
"This is of course a similar model to what you find on the West Coast in the States."
"Hopefully therefore it will encourage economic growth because of the ultra high-speed digital infrastructure we are putting in. Obviously we can’t do that alone, it does require businesses to take it up and does require the kind of investment that we’ve seen."
Halbert believes that having this kind of infrastructure will make it more attractive for businesses.
"With Hull’s position as culture city in 2017, we can hopefully see some regeneration of that economic activity."