stefan glusa

TeleKommunikationsGesellschaft Südwestfalen mbH

02/16/2012

Building a Regional Broadband Network in Public-Private-Partnership FTTH Conference 2012 Munich, Germany Fibre to the Home Council 16th February 2012 Stefan Glusa MA TeleKommunikationsGesellschaft Südwestfalen mbH Steinstraße 27 59872 Meschede Telefon: +49 (0)291 94 1502 Telefax: +49 (0)291 94 1503 eMail: [email protected] www.tkg-swf.de


02/16/2012

Hochsauerlandkreis / Südwestfalen Hochsauerlandkreis

1.958,77 km²

largest district in NRW

272.000 inhabitants

12 cities / towns

average: 141 inhabitants/km²

range: 68 - 400 inhabitants/km²

Südwestfalen

cooperation of 5 districts

6.200 km²

1,6 Mio. inhabitants


02/16/2012

• German constitution: Artikel 72, Absatz 2, Grundgesetz (GG) • broadband coverage no universal service

living conditions equality

• population decrease from 82 Mio. to 65 -70 Mio. in 2060 • working population decrease from 50 Mio. to 33 - 36 Mio. in 2060

demographic change

• governmental precautionary principle • Social duties of municipal services

services for the public

• high quality infrastructure • decentralized production sites and small / medium “hidden champions”

economic development

Public / municipal interest in FTTH


02/16/2012

Bevölkerungsstruktur im HSK Settlements and SMB locations


02/16/2012

Invest per home connected (EUR)

Long term FTTH coverage (in %)

• own development • co-operation • public participation

proactive

• negotiations • planning reliability • basic support

stimuli

• competition • serviced anyway • no need to interfere

market

Investment scope


02/16/2012

Quelle: TKG, Atene KOM GmbH, 2009

Network design

Core ring PoP (RF) Backbone Access Networks NOC FTTH


02/16/2012

Backbone

Backbone (plan)

Feeder (plan)

Link Town/Citynet

Homes passed

Radio coverage (WiMax)

Network expansion Q1/2012

Core network Plan / progress 2012


02/16/2012

60% 10% 5%

9%

6% 10% rollout (access) rollout (core) administrative costs OPEX rentals active components

material work

Cost structure (total)

• 80-90% construction work (ext.) • 20-10% material input (TKG)


02/16/2012

• DBFO+Maintain (DBFOM)

• DBF+Operate (DBFO)

• DB+Finance (DBF)

• Design/Build (DB)

PPP structures

Operation

Concession

Cooperation TKG property (passive)

Private operations/ investment

Income Allocation Operating Income - Operating Expenses Net Operating Income -lease payment (to TKG) -Debt service

Cash Flow -Preferred return Net Cash Flow Public Share Private Share

Partnership


02/16/2012

Funding

TeleKommunikationsGesellschaft Südwestfalen mbH German limited liability company (GmbH)

Total Equity: 5.5 Mio. €

Olpe 1.0 Mio. €

Hochsauerland 1.5 Mio. €

Soest 1.5 Mio. €

Siegen-Wittgenstein 1,5 Mio. €

NetCo (4.5 Mio. €)

OpCo (1.0 Mio €) + additional

5.5 Mio. € shareholder

loan HSK OE SO SiWi …PP

private operators

Data Center

contracts / concessions

shareholder / partner


02/16/2012

• City / Town annual budget • Leak tests / sewage drain §61a LWG • Utility / public service company • Cooperative (citizen, companies, banks) • Promotional / development loan

(NRW.BANK) • Subsidies

NetCo (4.5 Mio. €)

OpCo (1.0 Mio €)

RF FTTH VDSL WLL … Interface (S/PRI ?)

Data Center

Access (L2-BSA ?)

Project funding

+ 60-80%

• Mobile backhaul • P2P company connection • Public sites, hospitals,

schools, administative buildings, TETRA / BOS

• misc. „synergies“

+

11.0 Mio. € Initial

Budget

project funding

mix of debt and equity


02/16/2012

Example FTTH case

Planning / Proj. Mgmnt.

- 630.000

CAPEX OPEX

ARPU = 10-25 € / Break even 9,3 yr.

0 100% TKG risk:

public sector building

private telco(s) operating

TKG possible

exit

FTTH 300 homes connected


02/16/2012

FTTH rollout


02/16/2012

Coordination database for civil engineering

• public construction authorities

• countryside highways

• district- & city roadworks

• water-, utility companies

• network operators

• underground work

• important instrument

for continuous

coordination


02/16/2012

Technology mix / cooperation with partners

SO

MK

OE

SI

HSK

„Consumers don‘t care about pipes“ „Any provider over any infrastructure“

http://www.helinet.de/cms/�

http://www.gasline.de/home.htm�

http://telemark.de/index.html�

http://www.widsl.de/�


02/16/2012

• “Digital dividend” will not close the broadband gap in rural areas in the long run • Private Telcos “can” only care for about 75% of the market. Remaining quarter too costly. • Public Private Partnership (PPP) with a combination of publicly owned networks and

additional companies’ / private investments = Public Participation Model (PPM) • Extremely project oriented, lots of preparatory work, highly individual planning and roll out

required. Constant public attention and management necessary. • Strongly focused on public NGN investment and property. • Our mission: Enabling private operators to serve underserved areas.

Lessons learned

• No revenue- or payment guarantee needed for private Telcos to operate existing networks • (Very) little demand for TriplePlay in our rural areas (yet, >90% use Satellite TV) • Public investment in a private venture under market conditions = no state aid (MEIP) • > 2.500 customers in > 80 separate networks; Short term expansion potential: 60-75.000 hh • “NBN Co.” also works well as an RBN Co. = Regional Broadband Network Company (Ltd.) • Long-term ROI. Only municipal shareholders able and willing to pre-finance the infrastructure

Results & conclusions


02/16/2012

Alright, I‘ll try again next year - you know, one of these days you‘ll wake up and say,

‘Why don‘t I have FTTH?!‘“

There is still a lot to do…


02/16/2012

Thank you! Stefan Glusa MA TeleKommunikationsGesellschaft Südwestfalen mbH Steinstraße 27 59872 Meschede Telefon: +49 (0)291 94 1502 Telefax: +49 (0)291 94 1503 eMail: [email protected] www.tkg-swf.de

stefan glusa

Business

public sites

public private partnership

public ngn investment

constant public attention

public participation

tkg db

tkg risk

long run private telcos