100x faster broadband? Sweet mercy! It's here!

Exclusive: We talk to Europe’s leading broadband entrepreneur about how he’s offering outrageous speeds

Let me moan. I’m from rural Northamptonshire, where the broadband is shocking. Downloads are so slow you can put the kettle on whilst you wait. And when it rains the connection fails.

Here in central London things are slightly better. Most folk get around 10 megabits per second. But we are living in the Dark Ages compared to Japan or Korea where 100Mpbs are common.

Why are we so backward?

And when are things going to improve?

The one man who knows is Boris Ivanovic. He’s the guy who brought super-fast broadband to the UK from Sweden, where he started his first super-fast broadband firm. In 2001 when BT was hawking 2Mbps connections Ivanovic’s start-up Be Internet offered 24Mbps. He sold the firm a few years later for £50m to O2.

“The cost? Jaw-droppingly cheap. Hyperoptic’s premium service, the full 1000Mbps, is £50 a month”

Now he’s back with a new start-up, Hyperoptic, which offers broadband speed of 1000Mbps. Yes, that’s a thousand megabits per second, or one gigabit. More than a hundred times faster than what we pathetically call “fast” broadband today in the UK.

The upload speed is the same as the download, which is unusual. This makes the upload speed 200x faster than current speeds.

I was desperate to know how Hyperoptic can offer residences this speed when BT can’t, or won’t.

“We bring fibre directly to your house,” says Ivanovic. “BT Infinity claims to be fibre, but really it only uses fibre from the exchange to the cabinet [the large green telecom sub-station box which sits between the main exchange and the houses it connects]. For the last mile from the cabinet to the home it still uses copper, which is why their service suffers performance drops. They have to say ‘up to’ with heir offers – for example ‘up to 30Mbps’, as only a small number of customers ever get this speed. With our speeds, if we offer 100Mbps or 1000Mbps that is precisely what you get, upload and download.”

And therein lies the secret. Hyperoptic’s engineers take a thin fibre cable from the main telephone exchange and run directly it to your house, normally through existing underground ducts. Then they install a bit of kit at your house.

By bypassing the existing infrastructure, Hyperoptic can offer the sort of internet speeds the Japanese and Koreans take for granted. Even Virgin doesn’t offer this – it simply replaces the copper wire from the cabinet with a copper co-axial cable, which is better, but nowhere near true fibre.

The cost? Jaw-droppingly cheap. Hyperoptic’s premium service, the full 1000Mbps, is £50 a month, 100Mbps is £25 and the cheapo-option, 20Mbps, is £12.50. It’s barely more than ordinary broadband yet many, many times the speed.

How so cheap? “The cost mainly comes from installing the fibre,” says Ivanovic. “Once we have installed that, it is quite simple to run.”

Okay. So how come it isn’t more common? Why the flippin’ heck am I tolerating brick-slow speeds in London and in Northamptonshire?

Ivanovic: “The UK is an oligopoly. BT, Sky, Talk Talk, Virgin and the T-Mobile and Orange venture Everything Everywhere control the market. They have no incentive to improve speeds. They’d just be spending money on their existing customers for no gain. Whereas we need to win customers.”

There’s another reason too.

“BT’s model means it needs products which can be sold nationwide and which can follow industrial processes. It wants to tell 20,000 engineers to go off and do something. But fibre to the home isn’t like that. Every house is different. We need to survey a property, talk to the landlord and work out whether it is suitable. BT wants to focus on easier tasks.”

Now here’s the catch… you knew there was one right?

Hyperoptic is a start-up, so it needs to focus on areas where the customer density is greatest. This means it is currently only offering its service to residences where a hundred customers might sign up. Blocks of flats, for example. This means it needs only to run a single fibre cable to the building, rather than a hundred. The cost saving of this approach are terrific.

This means if you live in semi-detached you still won’t be getting Hyperoptic speed for a while yet.

Which is…depressing.

“It’s logistics. If you wanted a fibre cable to your house it needs to be done physically. Workmen need to dig a trench, or put the cable in the air with existing telephone cables. This isn’t cheap. Even if you live in an urban area it could cost £1,000 or £2,000 to complete.”

Sounds cheap, if you ask me.

Weirdly, this dependence on workmen to run the fibre cable through ditches means Eastern Europe is a hotbed of fibre-to-the-premises connections. “The labour over there is really cheap,” explains Boris. “So digging trenches is not a problem for them.” Here a ditch can cost £20 a metre to dig.

If you think the government will help, more fool you.

Only £500m has been promised by the chancellor to fund broadband upgrades, and that will be spent on BT’s preferred solution of running fibre only to the cabinet, not to individual houses. “It’s ridiculous” groans Ivanovic.

“The UK is planning to spend £30bn on that high speed rail project. For this sum they could put fibre to every house in the UK many times over! And think of the gains. In the short term it would be an economic stimulus, employing lots of telecoms engineers. And in the long term it would change the culture of the country. It would position the country as a high tech nation. People could work from home, using their gigabit internet connections. They wouldn’t need to use the high speed rail!”

Personally, I agree 100%.

Absurdly, even that £500m won’t be used for fast broadband. “The rules are so strict,” says Ivanovic. “Only firms more than three years old can apply for the money, so we can’t get any. BT will end up with almost all of it.”

So are we country bumpkins condemned to terrible broadband speeds for decades to come?

“No. When there is enough demand new solutions will come through. We have seen you don’t need to dig ditches for fibre. There are self-supporting fibre cables which hang from existing telephone lines.” All it needs is an entrepreneur to take up the challenge, he says.

Hyperoptic may trigger the revolution. It is undoubtedly a big force already. Only a year old it recently recruited John Armstrong as a non-executive director.

Armstrong was the CEO of the Royal Institute of Chartered Surveyors for 12 years until 2008. He’s Mr Big in the construction and property industry, and is helping Hyperoptic talk to major freeholders and construction companies.

The firm is also making headway in converting business customers to the pure fibre experience. For Soho video-effects firms it will save hours, or days, of download and upload times.

Ivanovic and his longtime business partner Dana Tobak took on no external investment for Hyperoptic, as they didn’t need it following their £50m sale of Be Internet. Ivanovic proudly says the majority of his 27 employees bought shares with their own money, investing to be part of Hyperoptic’s potential success.

Super-fast internet is a fact of life in the Far East, installed using precisely the same technology and business model as Hyperoptic. It’s no co-incidence that HD videoconferencing and online gaming are far more advanced there.

The argument over whether we need 1000Mbps is so trite I’m not going to air it. We do. I do.

Ivanovic openly admits he has no intention of bringing those speeds to the masses. He’ll concentrate on high-density urban areas.  His resources and manpower demand that he does.

But he has already achieved one thing: opening our eyes to what we’ve been missing. Now that we know super-fast broadband is possible - and the only hurdle is dragging a string-like fibre cable from the exchange to our houses - many of us won’t rest until we have it too.

Bring on the 1000Mbps internet. Bring it on, bring it on, bring it on!

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