FTTH Conference 2009 Christian Berg

From Megawatt to Gigabit - The Danish Energy Companies FTTH Council Europe Conference Copenhagen 11 February 2009 Christian Berg Chief Consultant chb@danskenergi.dk

Topics Why FTTH? The Danish Energy Companies – what are their plans for the future? ”Dansk Fibernet” – a new quality label in Denmark Investment rationales for FTTH Important challenges for the Danish Energy Companies

Why FTTH? High-speed internet is an enabler of ICT-innovation, digital content, growth, education, new jobs and social welfare Bandwidth capacity on copper infrastructure is too limited to handle “heavy content” like IPTV, HDTV and advanced video applications, e.g. high definition telepresense Strengthen infrastructure competition – to the benefit of citizens, businesses and society in general

Broadband coverage gaps today Broadband coverage – Mid-2008 Percentage of households and businesses on postcode level with access to 10 Mbps downstream and 0,5 Mbps upstream Source: National Telecom Agency, December 2008

Bandwidth is under pressure…

… and we have only seen the tip of the iceberg

roll-out plans - time frame: 5-7 years

Roll-out and take-up Homes passed Customer take-up

The Energy Companies and FTTH The energy companies have deep roots in the local communities Most energy companies have a cooperative structure – are owned by the citizens in the area Significant cost-savings when electricity cables and fibres are put into the ground simultaneously 100 years of experience in deploying infrastructure

A new quality label in the broadband field All-In-One Guaranteed speed Future proof Fibre all the way

Best effort broadband - what is the speed? Note: ADSL 10 Mbps is based upon 927 reporting's from customers. ADSL 20 Mbps is based upon 1240 reporting's. Period of measurement is 2 July 2007 – 2 July 2008. Source: National IT and Telecom Agency

Investment rationales for FTTH - risks and opportunities Long term investment, with built-in risks Financial, critical mass – cost base Price competition, recap investments Regulatory risk First mover benefit – high penetration will discourage competitors to expand competing networks Churn rate on FTTH is very low compared to traditional telecom churn rate – significant cost savings New revenue streams Unique content and services Targeted advertisement due to digital footprints Backhaul transmission for wireless technologies

Important challenges (I) Barriers of entry Employer paid broadband/tax subsidised broadband covers around 1/3 of the total broadband market and is mainly based on ADSL Mandatory membership to a local cable-TV network covers around 1/3 of all Danish households with cable-TV. Effective protection shield and a clear distortion of competition

Important challenges (II) Facing competition from nationwide competitors The energy companies need to cooperate to archive critical mass and economies of scale Standardize technology and interfaces, uniform net-design and couple their network Strengthen their bargaining power when facing suppliers of content and equipment

Important challenges (III) A countermove to the falling prices on traditional broadband FTTH has to be differentiated more effectively from copper- based broadband – apples should not be compared with pears! Better legislation to safeguard consumer transparency on advertised broadband quality and speeds Unique content on FTTH has to be introduces - to show the significant difference on quality between copper-based broadband and FTTH

Thank you for your attention!

FTTH Conference 2009 Christian Berg

by ceobroadband on Mar 08, 2009

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FTTH Conference 2009 Christian Berg — Presentation Transcript