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Dr. Bert Sadowski, Associate Professor, University of Technology Eindhoven …

Dr. Bert Sadowski, Associate Professor, University of Technology Eindhoven
“Is There a Market for New Fibre-based Services for Residential Consumers?
Case Study Evidence from the Netherlands”

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  • 1. Is there a market for new fibre- fibre based services for residential consumers? Case Study Evidence from the Netherlands Bert Sadowski Marcel de Pender
  • 2. Netherlands: Broadband versus Fiber d) etration Level (perhousehold 100.0 94.3 90.0 83.2 80.0 74.0 73.0 70.7 ( 70.0 66.1 60.3 60.0 50.8 FTTH 50.0 46.0 Broadband Pene 40.0 40 0 29.0 30.8 30.0 20.0 12.0 10.0 10.0 10 0 6.0 7.0 2.5 2.5 2.6 0.0 (Source: OECD, 2009; FTTH Council Europe, 2009) PURE Institute
  • 3. A long and winding road to municipal broadband b db d • Emergence of municipal fibre networks in 2005 g based on governmental R&D program ("Knowledge District" 2000-2006) • EC decisions on State Aid: • Appingedam: November 2004: Essent Kabelcom formal complaint with EC > In 2006, EC ruled as State aid 2006 • Amsterdam's citynet: December 2005: Complaint with EC cable company UPC > December 2007: EC in line with Market Investor Principle • Dutch Telecommunication Act (Art. 5.14) in 2007 • Recovery Plan (23-09-09) Crisis & Herstel Wet PURE Institute
  • 4. Restarting municipal networks? g p • EC B EC: Broadband G id li db d Guidelines (2009/C 235/04): 235/04) • Supporting the rapid deployment of NGA networks (3.1) • NGA networks: 1) wired access networks > wholly or in part of optical elements & broadband access services with enhanced characteristics (such as higher throughput) (Art 53) 2) future HD content, support on-demand bandwidth hungry applications & for business affordable symmetrical u g y app cat o s o bus ess a o dab e sy et ca broadband connections (Art 54) • "White NGA area " > NGA networks do not exist and where they are not likely to be built and be fully operational in the near future by private investors (Art 68) PURE Institute
  • 5. FttH HTC Why is FttH an NGA network ADSL M y Mobile 10 Mbit/s 100 Mbit/s 1 Gbit/s (Source: Own Investigation, 17 February 2010) PURE Institute
  • 6. Who is leading? g Muncipality Number of Homes connected Almere 10,507 Nijmegen 17,008 17 008 Eindhoven 17,160 16% of total HH Geldrop-Mierlo 10,597 Nuenen 8,600 Amsterdam 13,807 3% of total HH Deventer 10,000 10 000 Enschede 10,800 Utrecht 23,807 15,6% of total HH Leiden 11,297 Rotterdam 10,445 3,6% of total HH Source: Stratix, 2009, own research. PURE Institute
  • 7. What is missing? g •C Current research: t h • Broadband versus NGN • Broadband penetration versus advanced b oadba d based se ces broadband-based services • Residential users (price/income) PURE Institute
  • 8. The D t Th Data • S Survey (SURF, 2009) conducted on-line from the area (SURF d t d li f th of Eindhoven (area Tongelre and Woensel) in July 2009 • From the 8,606 people approached via email, 2,682 responded. From the group of non-respondents, 313 g people started with the survey but did not finish it. (response rate of 31.2 %) • 443 people h d a 2 Mbit/ Internet connection, 1290 l had Mbit/s I t t ti used a 100 Mbit/s Internet connection. PURE Institute
  • 9. Difference between residential users PURE Institute
  • 10. Price remains important! p PURE Institute
  • 11. Local Presence important! p PURE Institute
  • 12. Is it a global or ….? g PURE Institute
  • 13. A local medium? PURE Institute
  • 14. Hypotheses yp • H Hypothesis 1: R id ti l users with a high speed th i 1 Residential ith hi h d Internet connection also experiment more often with advanced services (such as digital TV) en use new mobile equipment (bijv. Smartphones with data options, PDA's). • Hypothesis 2: Residential users who attach a higher yp g value on social issues (such as social cohesion) do more often utilize higher Internet speed. PURE Institute
  • 15. PURE Institute
  • 16. But What about new services? • New fibre b d fib based services are defined as:  i d fi d 1. Network VCR 2. Video calling  2 Video calling 3. Inactivity sensors,  4. Medical video calling, Medical video calling,  5. Local TV,  6. Home security cams,  y 7. Access control • Conjoint Analysis: Respondents evaluate several product concepts with a number of conjoined attributes (or product features) PURE Institute
  • 17. What about new services? PURE Institute
  • 18. Results of study y • Th There i d is demand f new fib b d for fibre based services! d i ! • Installation as well as monthly costs are negatively related to attractivity of product • The use of new servies via the internet of via the mobile phone increase the attractivity of the product and the willingness to pay • Local shops are not significant • Age has been an important factor • And the way of introducing the new service! PURE Institute