„Broadband in the 21st century“
    CEPS, Brussels,
    May 26th, 2009




    Broadband cooking recipe
    A pragmatic ap...
MICUS and KONEXT:
                             two complementary approaches of broadband policies




    Market research,...
Fiber optics is THE broadband technology

         Fiber optics:
         - Virtually unlimited transmission capacity
    ...
From global to local responsibilities:
                                                                    the example of ...
Involving private companies
                                                       in broadband development in rural areas...
Broadband mapping: a strategic tool

    Demand layer:
    - Qualified broadband demand
    - Quantitative market analysis...
Planning the broadband development at the regional level

    A. Demand analysis: evaluate the market size and the economi...
Foresee the next steps
                                     in the development of the broadband infrastructure

         T...
Investment-friendly regulated market:
                                                    more money for better infrastruc...
Help users discover the benefits of broadband


     Building a state-of-the-art broadband infrastructure is not the point...
How will you address the structural issues in the long term?



         A long-term structural digital divide between urb...
Thank you for your attention
      Tank you for your attention


                        Dr. Martin Fornefeld
            ...
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Broadband Cooking Recipe

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A pragmatic approach to the implementation of a successful broadband development strategy for rural areas

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Broadband Cooking Recipe

  1. 1. „Broadband in the 21st century“ CEPS, Brussels, May 26th, 2009 Broadband cooking recipe A pragmatic approach to the implementation of a successful broadband development strategy for rural areas Dr. Martin Fornefeld Gilles Delaunay Stadttor 1 D – 40219 Düsseldorf Albertstr. 12 D – 10827 Berlin phone +49 (0)211 – 3003 420 · fax +49 (0)211 – 3003 200 www.micus.de info@micus.de 1 Bild: Tagebau bei Cottbus, Brandenburg, von „Flicker/smitty42“, Creative Commons License © 2009 MICUS Management Consulting GmbH
  2. 2. MICUS and KONEXT: two complementary approaches of broadband policies Market research, strategy development at a higher level Project management, infrastructure development with local communities 2 © 2009 MICUS Management Consulting GmbH
  3. 3. Fiber optics is THE broadband technology Fiber optics: - Virtually unlimited transmission capacity - Virtually unlimited transmission distance - Virtually unlimited lifetime Copper cables: - Virtually unlimited availability - Limited [capacity x distance] product - Expensive raw materials Radio technologies: - Interference and interception issues - Limited capacity (radio frequency spectrum) - The infrastructure already exists - Limited reach (obstacles) - „Light“ infrastructure - mobile internet: interesting market as a complement to broadband Backbone: long-distance, Access network: radio, high-capacity infrastructure copper cables or optical fiber An easy-to-use indicator for measuring broadband development: the distance between the end-user and the nearest optical fiber 3 © 2009 MICUS Management Consulting GmbH
  4. 4. From global to local responsibilities: the example of Germany Market Public Technical Infrastructure Demand regulation Financing support Planning stimulation EU Federal state Higher regional level (states) Lower regional level Local communities Find the right decision level for the right job. 4 © 2009 MICUS Management Consulting GmbH
  5. 5. Involving private companies in broadband development in rural areas „Enable the private market, not replace it.“ Within settlement areas: Long distances between high market density villages: no private investor Backbone infrastructure: • High costs compared to investments in urban areas. • Competition at the infrastructure level is not possible in rural areas. Solution: public financing (partially) and leasing model „fair access“. 5 © 2009 MICUS Management Consulting GmbH
  6. 6. Broadband mapping: a strategic tool Demand layer: - Qualified broadband demand - Quantitative market analysis (business/ private) Coverage layer: - Broadband coverage - Available bandwidth/ quality Infrastructure layer: - Telecommunications infrastructures - Other relevant infrastructures Development layer: - Draft planning - Planned upgrades Make it Web 2.0! 6 © 2009 MICUS Management Consulting GmbH
  7. 7. Planning the broadband development at the regional level A. Demand analysis: evaluate the market size and the economic detriment for not- connected companies. B. Analysis of the existing infrastructure: figure out the current broadband coverage and other relevant infrastructures for broadband development. C. Draft infrastructure planning: draw the lines of an efficient development strategy. D. Negociations with the telecommunications operators: negociate the contribution of the private market to the development of the infrastructure. E. Analysis of the economic opportunity: compare investment costs, return on investment and risk factors over the next 15 to 20 years. F. Project financing: bring together public and private financing. G. Business model (optional): in case the private market is not able to propose solutions, create a business of public initiative. All these points are essential! 7 © 2009 MICUS Management Consulting GmbH
  8. 8. Foresee the next steps in the development of the broadband infrastructure The development of the broadband infrastructure is a continuous process Next Generation Broadband Networks internet Narrow band internet ADSL >> „Fiber-to-the-Village“ >> „Fiber-to-the-Home“ Shape the present, prepare the future. 8 © 2009 MICUS Management Consulting GmbH
  9. 9. Investment-friendly regulated market: more money for better infrastructures Better infrastructures should generate higher revenues. A bad example ISDN DSL FTTH in Germany: 384kbit/s to 104kbit/s 100Mbit/s 16000kbit/s 70€/month 35€/month 35€/month (average) (market price) (in Cologne) Which investor would be so fool to upgrade the ISDN infrastructure in rural areas? A good example Local-loop acces Regulated price Regulated price in Germany: prices 2007-2009 2009-2014 Fiber optics local 13.25€ 16.27€ loop (OPAL) Copper local loop 10.50€ 10.20€ Do not let private actors decouple access prices and connection quality. 9 © 2009 MICUS Management Consulting GmbH
  10. 10. Help users discover the benefits of broadband Building a state-of-the-art broadband infrastructure is not the point. Having people use broadband is the real objective. Two main targets: - small businesses - elementary schools Other targets: - elderly people - low education social groups Up to 1/3 of public broadband programmes should be used for demand stimulation. The three golden rules for an efficient demand stimulation: - Users train users (no „teachers“) - Do not explain; just demonstrate - Try it yourself and learn by yourself 10 © 2009 MICUS Management Consulting GmbH
  11. 11. How will you address the structural issues in the long term? A long-term structural digital divide between urban und rural areas. How will you finance the long-term development of the telecommunications ? infrastructure in rural areas? Possible strategies: − Spend taxpayers‘ money to develop broadband infrastructures in rural areas. − Introduce costs redistribution mechanisms between private operators on the basis of the regional distribution of their respective customer base. − „Free market“: People in rural areas should pay the full price! Put an end to the nationally unified prices. 11 © 2009 MICUS Management Consulting GmbH
  12. 12. Thank you for your attention Tank you for your attention Dr. Martin Fornefeld +49 211-3003 420 fornefeld@micus.de MICUS Management Consulting GmbH www.micus.de 12 © 2009 MICUS Management Consulting GmbH

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