fiberweek_2010_an overview of fiber to the home deployment - status & trends
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An Overview of Fiber to the Home Deployment - Status & Trends
FiberWeek 2010, Croatia
Dr. Igor Brusic
SBR Juconomy Consulting AG
Split, 29.04.2010
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Why Fiber to the Home?1
FTTH Deployment Worldwide / Europe2
Economic Challenges3
Regulatory Challenges4
New Business Models5
Summary and Outlook 6
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Introduction - SBR
SBR Juconomy Consulting AG offers sound business , technical , regulatory and
legal advice on regulated markets in the telecoms sector and other network
industries (post, electricity, gas, railways), as well as the media and information
technology (ICT) segments
Established on 1 March 2004
Track record of >100 projects in the telecommunication sector
Consulting of utility service providers regarding the cooperation potential for fibre-
based network roll-outs and regulatory questions concerning the use of different
access technologies
Ongoing support to municipalities and utility providers with regard to building their
own broadband network infrastructure and the migration from unbundling local-loop
to an FTTX strategy
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Why Fibre to the Home (FTTH)?
Source: http://www.useit.com/alertbox/980405.html
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Source: A.T. Kearney/Hellenic Ministry of Transport&Communications/Broadband Strategy/May 2008
Why Fibre to the Home (FTTH)?
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Source: McKinsey&Company, Creating a Fiber Future, White Paper, 2010
Why Fibre to the Home (FTTH)?
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Source: OECD adapted from “Electricity and Economic Growth”, Committee on Electricityin Economic Growth, Energy Engineering Board, National Research Council (1986).
Why Fibre to the Home (FTTH)?
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Source: Based on Technological Revolutions and Financial Capital: TheDynamics of Bubbles and Golden Ages, Carlota Perez; IBM 2004 Annual Report
Why Fibre to the Home (FTTH)?
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The choice is yours …
Why Fibre to the Home (FTTH)?
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Why Fiber to the Home?Why Fiber to the Home?11
FTTH Deployment Worldwide / Europe2
Economic ChallengesEconomic Challenges33
Regulatory ChallengesRegulatory Challenges44
New Business ModelsNew Business Models55
Summary and Outlook Summary and Outlook 66
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FTTH Global 2009
Source: FTTH Council Europe
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Countries (> 1% of FTTH)
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USA
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Asia
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Australia
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Europe
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Europe / Countries
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Why Fiber to the Home?Why Fiber to the Home?11
FTTH Deployment Worldwide / EuropeFTTH Deployment Worldwide / Europe22
Economic Challenges3
Regulatory ChallengesRegulatory Challenges44
New Business ModelsNew Business Models55
Summary and Outlook Summary and Outlook 66
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Economical challenges
Very strong dependencyon revenue and number of users
Fixed costs and variable costs
Highest investments costsin access network infra-structure because of civil work (50-80%)
Operators are investing if:
Business model ispositive, or
Strategic decision
Source: Dr. Raul Katz: Ultrabroadband telco investment models; Ultra Broadband Seminar, Paris, April 2008
How much has to be invested?
How many users will pay for it?
How much the useris ready to pay?
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Why Fiber to the Home?Why Fiber to the Home?11
FTTH Deployment Worldwide / EuropeFTTH Deployment Worldwide / Europe22
Economic ChallengesEconomic Challenges33
Regulatory Challenges4
New Business ModelsNew Business Models55
Summary and Outlook Summary and Outlook 66
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Regulatory challenges
If the fiber network is built by the incumbent, without regulatory
holidays, probably it has to be open for use by alternative
operators
Symmetrical or asymmetrical regulation?
Ex-ante or ex-post obligations/remedies?
Focus on infrastructure or service competition?
Higher return on capital invest because of higher risk?
Defining network elements, for which SMP is relevant and to which
access is to be granted (ducts, dark fiber, collocation)
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Market uncertainty
Regulatory uncertainty• Regulatory holidays• SMP analysis
Private sector will
probably hold back
with investments in
fiber if pay back is not
ensured under given
market and regulatory
conditions
Harmonizing of investment
incentives and operator‘s
strategies through
– PPP-Projects
– Open Access Models
– Obligation to provide
wholesale-offers
Harmonizing of investment
incentives and operator‘s
strategies through
– PPP-Projects
– Open Access Models
– Obligation to provide
wholesale-offers Fostering of investment
Consequences SolutionHurdles
Possible solution
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Why Fiber to the Home?Why Fiber to the Home?1
FTTH Deployment Worldwide / EuropeFTTH Deployment Worldwide / Europe2
Economic ChallengesEconomic Challenges3
Regulatory ChallengesRegulatory Challenges4
New Business Models5
Summary and Outlook Summary and Outlook 66
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New business models
Passive Infrastructure Active Infrastructure Services
Dark FiberAB Stokab
Provider 1 many plenty
NetCo OpCo Retail Service ProviderSingapore and
Australia
Provider plenty11
Verticaly integrated operatorSchwerte and
M-net
Provider 1
Digital Marketplacendix
plenty1Provider
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Why Fiber to the Home?Why Fiber to the Home?11
FTTH Deployment Worldwide / EuropeFTTH Deployment Worldwide / Europe22
Economic ChallengesEconomic Challenges33
Regulatory ChallengesRegulatory Challenges44
New Business ModellsNew Business Modells55
Summary and Outlook 6
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Summary
Fiber as the new infrastructure
Difficult business model for operators
Private sector can´t capture social benefits and economical impact
(externalities like rising employment, higher tax income, reduced
outflow of people, business settlement, CO2 reduction, etc.)
Governmental support can be essential (Sweden)
Rural areas are in a unfavorable position (World)
Regulation matters but regulatory holiday can´t save rural areas (USA)
Fiber is squeezing out xDSL (Japan)
Municipality networks and open access as a possible solution (Europe)
There is no „one-fits-all“ approach in deploying fibre
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Outlook
Fibre is the ultimate solution of the broadband challenge
Mobile networks (LTE, WiMAX) are not competing but promoting the
acceptance of FTTH
Infrastructure competition is not a way to count on fostering national fibre
roll-out
Governments have to play a bigger role by
Promoting e-government, telemedicine, telework and online learning
Favorable tax policies
Investing/funding fiber roll-outs in rural areas
But this is not (yet) part of the Croatian government economy recovery
program (http://www.slideshare.net/manjgura/program-gospodarskog-oporavka)
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Contact
Nordstrasse 11640477 DüsseldorfDeutschlandTel: + 49 211 68 78 88 0Fax: + 49 211 68 78 88 33URL: www.sbr-net.com
Parkring 10/1/101010 WienÖsterreichTel: + 43 1 513 514 0 15Fax: + 43 1 513 514 0 95URL: www.sbr-net.com
E-mail: [email protected]
SBR Juconomy Consulting AG
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Main incentive for FTTH for Iliad
Source: Iliad, FY 2008 Results and Strategy Presentation, March 19th 2009