Hartwig Tauber FTTH Council, Ghent 24 Oct 2011
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Hartwig Tauber FTTH Council, Ghent 24 Oct 2011



Workshop on Municipal Fiber Networks

Workshop on Municipal Fiber Networks
Ghent, October24th2011



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    Hartwig Tauber FTTH Council, Ghent 24 Oct 2011 Hartwig Tauber FTTH Council, Ghent 24 Oct 2011 Presentation Transcript

    • FTTH Market & Financing of FTTH Hartwig Tauber, Director General, FTTH Council Europe Workshop on Municipal Fiber Networks
    • Photo by Nicolo Baravalle FTTH Europe Council
    • FTTH Council EuropeOur Vision: A sustainable future enabled by Fibre to the HomeOur Mission • To accelerate FTTH adoption through information and promotion in order to enhance the quality of life, contribute to a better environment and increased competitivenessOrganisation • Founded in 2004, non-profit industry organisation • More than 150 member companies • Industry only – no operators
    • FTTH Conference 201214-16 February 2012, Munich, Germany www.ftthconference.eu
    • Photo by Nicolo Baravalle Europe in the slow lane?
    • Digital Agenda of European Commission• By 2020… • At least 50% of the households in European Union will use broadband connections of 100 Mbit/s or more • All households in European Union have broadband connections of at least 30 Mbit/s available• Published in Q2/2010• High priority in some European countries
    • FTTH Global panorama mid-2011 – Total subscribers 5.6 M 9.5 M 4.6 M 46 M 0.3 M … and FTTH continues to grow
    • FTTH Global Ranking – mid-2011
    • FTTH European Ranking – mid-2011
    • New FTTH/B subscribers 1H11• Top 5 countries • France +87,300 • Portugal +71,000 • Bulgaria +69,000 • Netherlands +43,000 • Spain +41,149 (Russia: + 964,000) Source: IDATE for FTTH Council Europe
    • Analysis of European Broadband Market• EU is not one single telecommunication market (like US)• Each member state has its specific broadband market with different players involved. Examples: • Countries with strong utility involvement: e.g Sweden, Denmark • Countries with strong competition on last mile: e.g. The Netherlands, France • Countries with strong government involvement: e.g. Portugal, Slovenia • Countries with strong incumbent and competition mainly on unbundling basis: e.g. Germany, UK • Countries with main focus on mobile market: e.g. Austria• There are no real „pan-European“ players. One operators often acts very different in different countries, e.g. Deutsche Telekom or France Telecom
    • FTTH in Eastern Europe• High number of former Easter European countries in European ranking: • Baltic states • Slovenia • Slovakia • Bulgaria • Rumania • Czech Republic• Three main reasons: • Need for building or rebuilding communication infrastructure (e.g. Lithuania) • Strong involvement of Western European Operators (e.g. Slovakia) • Dynamic market with many new players (e.g. Bulgaria)
    • European Region FTTH Forecast 35000 32604 30000 Connected Households, 000s 25665 25000 19430 20000 14476 15000 11065 10000 8265 5519 5000 3509 1892 0 2007 2008 2009 2010 2011 2012 2013 2014 2015Source: Heavy Reading for FTTH Council Europe, February 2011Note: Households connected directly to fibre (FTTH) and apartments connected via basement fibre termination (FTTB)
    • Europe in Context: the Race to Fibre Maturity AfterCountry 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020JapanKoreaChinaTaiwanAustraliaIndiaUSACanadaBrazilRussiaFranceGermanyItalyUKSpainSwedenNetherlandsPortugalSwitzerland Note: chart shows the year in which each territoryDenmark is expected on current trends and plans toEUROPEAN UNION achieve “fiber maturity”, defined here as 20% household penetration of FTTH or FTTB 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Heavy Reading for FTTH Council Europe, February 2011
    • Financing of FTTH NetworksPhoto by Nicolo Baravalle
    • The Challenge• FTTH is an infrastructure  financing needed• Financing of deployment of end-user fixed network is a new scenario for all players• Typical misunderstandings: • FTTH financing does not work because ROI is more than 4 years  basic misunderstanding: FTTH is an infrastructure • FTTH is too expensive (I)  investments in Telecommunication infrastructure in Germany was 82,7 billion EUR from 1998-2008. This is 2.000 EUR/household • FTTH is too expensive (II)  no need for expensive frequency spectrum fees. In Germany operators paid 3 billion EUR just for frequency-licences of the “digital dividend” in 2010 • FTTH investments are compared with interim investments in “alternative” technologies  FTTH is the end game solution, no expensive “migration path” necessary• Situation changes if FTTH is understood as infrastructure like railroads, streets, water supply or sewers
    • Different Players – Different Requirements Municipalities & Utility Alternative Operators Incumbents companies• Long term investments • Enter a competitive • Own a• Regional projects market telecommunication• Project costs relatively • Limited cash flow network already small • Challenge of low • Limited by• Business case based equity „shareholder value on open access in • Short-term planning requirements“ many cases • High risk • Short-term (and• Lack of experience in sometimes mid-term) • Good experience in planning, operating planning operating and and marketing marketing • „big and slow“ telecommunication telecommunication • „bound“ to national networks networks perspective
    • Different Players – Different Requirements Institutional Risk Capital & Banks EIB Investors Business Angels• High volume • Low volume • Medium volume • High volume• Stock exchange • Risk avers • Need to be • Official „role“ to listed companies (Basel III) addressed finance FTTH only (with some • Lack of directly • Good exceptions) understanding • Need for a good understanding• Require a of FTTH „business story“ of FTTH „professional“ • Short term • „slow“ business case investments • Trigger private• Some • Lack of share understanding understanding of FTTH of FTTH
    • How to Match? Networks • Create understanding & • Municipalities & increase awareness Utility Companies • Neutral information • Alternative • Political agenda Operators • Incumbents • Marketing • Lower risk • Eurobonds • PPP Financing • Cooperation models • Institutional • Public investment Investors • Banks • Innovative approaches • Risk Capital & • Investment aggeregation Business Angels • EIB • „multiple usage“ of investment (e.g. for LTE)
    • Photo by Nicolo Baravalle The Impact of FTTH
    • Example of Hudkisvall• Hudkisvall: – Population: 15.000 – Location: 300 km North of Stockholm – FTTH-Network decision: 2004• Impact: – Population decline stopped, partial increase – Increase of number of businesses: 6-14% per year – Two high-growth businesses founded premises in Hudkisvall – Old@home Ehealth-project started – National research instituted stared subsidiary
    • Example of ARGE Glasfaser Waldviertel• Three municipalities (Bad Großpertholz, St. Martin, Großschönau) in rural Austrian area• Start of deploying new sewers network in 2006• Mayors decision: deployment of FTTH in parallel – With support of local population – Against incumbent and regional politics (Bundesland)• Impact: – 100 Mbit/s parallel network available including triple play – Young families start to move back into municipalities – “Connected tourists” – “Sonnenplatz” – competence centre on passive houses founded in Großschönau – Special connected homes for elderly people will open 2012
    • Conclusion
    • Conclusion• FTTH is the infrastructure of the 21st century• FTTH stands for – Quality of life – Economic leadership – Socioeconomic benefits• …and the basis for a competitive Europe
    • Thank you for your attention! www.ftthcouncil.eu