UK telcos face £1bn risk under proposed copper switchover rules

Cartesian says Ofcom’s proposed copper switchover framework could force Openreach to build redundant fibre in rural areas, risking more than £1bn in wasted investment. The warning centers on about 1 million premises where an existing alternative network may already make a second build uneconomic.

Why it matters: - The proposed rules could shape where Openreach and rival operators build next, especially in rural areas where fibre deployment costs can exceed £1,000 per home. - Cartesian says the framework may drive uneconomic duplicate networks, reducing the return on private capital already deployed in UK broadband. - The issue matters because the copper shutdown is meant to accelerate faster broadband, lower fault rates and cut operating and energy costs.

What happened: - Cartesian released a report, The State of UK Fibre, warning that Ofcom’s proposed copper switchover framework could require Openreach to reach 90% or more of each exchange area before moving off copper. - The requirement would apply even where another operator has already built fibre in the same area. - Cartesian says that could force Openreach to overbuild existing networks in rural places instead of using the infrastructure already there. - The report was commissioned by Gigaclear. - Cartesian says it retained full editorial independence.

The details: - Cartesian estimates about 1 million rural premises could be affected by overlapping Openreach buildouts. - The alternative operators in those areas have likely invested around £1,000-plus per home passed. - Cartesian estimates the resulting wasted investment could total more than £1 billion. - The report proposes that Ofcom adapt the framework so existing fibre networks could count toward the coverage threshold. - The report also suggests alternative technologies, including satellite broadband, could count toward the threshold with safeguards to protect consumers. - Cartesian says the report includes discussion, analysis, solutions and market scenarios. - The report is available as The State of UK Fibre More information.

Between the lines: - The warning reflects a broader tension in the UK fibre market: rapid buildout has improved coverage, but fragmented ownership can make it hard for multiple networks to earn a return in the same area. - The proposed threshold appears designed to make copper retirement more straightforward for Openreach, but Cartesian argues the rule could distort investment incentives in places where one network is already enough. - Rural economics are the core pressure point. In those areas, two full fibre networks may not be commercially sustainable.

What's next: - Cartesian is calling on Ofcom to revise the framework before it locks in redundant construction. - The report frames the next policy choice as a tradeoff between maintaining consumer protections and avoiding stranded capital. - Openreach’s copper switchover program will depend on how Ofcom defines acceptable fibre coverage for exchange areas.

The bottom line: - Cartesian’s argument is simple: if Ofcom does not count existing networks, the copper switchover could duplicate rural fibre buildout and waste more than £1 billion in investment.