New Zealand's Ultra-Fast Broadband project (workshop FTTH EU Conference 2016)

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One of the biggest success stories in the world regarding FTTH network deployment is being written in New Zealand. Success is however never achieved without overcoming a significant amount of barriers. Using knowledge obtained from an academic assessment of the initiative, as well as practical experience from the actual deployment, this session provides New Zealand’s answer to important FTTH deployment barriers. Some of the questions that will be tackled are: How to handle the different types of geography? How to manage subcontracting and define the deployment workflow? What about take rates, TCO and funding?

This is the presentation from a workshop at the FTTH EU Conference 2016 titled "Learning from Real life cases - key success factors during preparation of a FTTH rollout" organized by iMinds, GE and FiberPlanIT.

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New Zealand's Ultra-Fast Broadband project (workshop FTTH EU Conference 2016)

  1. 1. FTTH Council Europe, February 2016 New Zealand’s Ultra-Fast Broadband project Marlies Van der Wee James Wheatley Jeroen Vanhaverbeke
  2. 2. 3 Sessions 13:00 – 14:45 Eir’s experiences Key Learnings from FTTH deployment in Ireland 15:00 – 16:30 New Zealand’s UFB deployment Answers to important FTTH deployment barriers 16:45 – 17:30 Handling Business case uncertainties Exploring ways to improve your business case 2
  3. 3. Speakers 3 Marlies Van Der Wee iMinds James Wheatley GE Jeroen Vanhaverbeke FiberPlanIT
  4. 4. A short introduction to New Zealand Marlies Van der Wee 4
  5. 5. New-Zealand 5
  6. 6. km2 260,000 millions 4.4 per km2 16 ratio 7 # 2 Some facts about New Zealand 6 <1 person per km2 :
  7. 7. Some history 7
  8. 8. 2009 National party OK, but how?
  9. 9. Cover an entire nation on a limited budget Jeroen Vanhaverbeke 9
  10. 10. In a perfect world… 100% FTTH coverage But… Limited budget 10
  11. 11. Impact most expensive homes 11 0% 25% 50% 75% 100% 50%60%70%80%90%100% Investment Coverage Exclude most expensive homes  Maximum Cost/HP? Big impact on total investment 2 programs  UFB  RBI
  12. 12. Case study: cost per home 12
  13. 13. Case study: cost per home 13
  14. 14. Case study: cost per home 14
  15. 15. Where is the cut-off? Methods  Current connection speed  Population density  …  Cost-coverage analysis 15 Generate deployment cost heat map
  16. 16. Budget estimation How to calculate needed investment  Tendering  Funding Required Accuracy? Time constraint? 16
  17. 17. Total cost of ownership  OPEX vs CAPEX  OPEX often overlooked  Active equipment in the field  Power, maintenance, …  Leasing  Dark fibre, ducts, exchange, poles from utilities, … 17
  18. 18. Broadband via two separate projects! Marlies Van der Wee 18
  19. 19. UFB, New-Zealand 19 • Public-Private Partnership based on tender • NZD1.5 billion public investment • GPON • Only a wholesale bitstream offer • no retail services!
  20. 20. The Rural Broadband Initiative (RBI)  Areas not covered by UFB deployment  speeds of at least 5 Mbps  90% of rural homes and businesses, all public schools and hospitals  Procurement of NZD $350 million 20 further deployment of VDSL and ADSL2+ Fixed-wireless broadband by upgrading existing and deploying new base stations
  21. 21. UFB progress so far December 2015 21 UFB Priority users Schools in UFB, RBI and remote areas
  22. 22. Business model: bitstream open access 22 …
  23. 23. Business model: bitstream open access 23 … Competition local and nationwide 87 in total, typically 10 per area Own geographical coverage area BITSTREAM ACCESS
  24. 24. Bitstream open access on GPON 24 CO Point of Interconnect ICAB ONT 1 GB or 10GB L2 access network 30/10 or 100/50 CO ONT
  25. 25. Funding schemes 25 Funds-recycling model Investment model
  26. 26. Funds-Recycling model 26
  27. 27. Start planning and deploying! Jeroen Vanhaverbeke 27
  28. 28. Rollout order: based on priority users 28  Schools and universities  Hospitals  Businesses
  29. 29. Alternatives: phased rollout  Take the cheapest option for every incremental step? OR  Plan the entire network upfront and already take trenching, duct capacity… of future rollouts into account in the first phase? 29
  30. 30. Case Study: How to do a Phased Rollout? Source: Municipal driven fiber access network rollout (Van Ooteghem, Casier, De Heyn, et al.) 30
  31. 31. Case Study: Results  Optimizing the network for different phases can lead to significant differences in CAPEX.  Results depend on:  Technological choices  Labour and material cost  Size of the phases  Cost of Capital, estimated time between phases, expected adoption… play an important role when making a decision.  Every rollout is different. Planning needs to be done case by case. 31
  32. 32. Deployment to non-FTTH areas Backhaul upgrades  Cabinet  Antenna Connect passed homes  Low additional cost  Future proof 32
  33. 33. Project cost calculation Easy!  ∑ (Equipment x (material cost + labour cost)) But… All unit costs known? Equipment volume correctly estimated? Unforeseen costs? 33 Shared driveways
  34. 34. Project cost calculation Easy!  ∑ (Equipment x (material cost + labour cost)) But… All unit costs known? Equipment volume correctly estimated? Unforeseen costs? 34 Shared driveways
  35. 35. Increased complexity 35 Depending on regional legislation Frequently with subcontractors
  36. 36. How to tackle increased complexity Chorus  Started rolling out in 2011  Now in year 6 of the 9-year build plan  Phased approach per year  Roll-out rules and techniques are reviewed and improved  Design rules per year  Chorus developed a "ruggidised" cable that can be either surface mounted (e.g. on fences) or shallow buried 37
  37. 37. Costs at customer activation  Design decision!  Impact on time to activate  Skills  Unexpected problems?  Cost per Home Passed vs Home Activated  Adoption rate?  Design rules/Architecture impact 38
  38. 38. Managing the network build James Wheatley 39
  39. 39. Managing the build  FTTH deployments are big construction projects  Hundreds of tasks to be completed by many crews  How to efficiently manage all this work?  How to report out to senior management on progress?  How to manage multiple sub-contractors?  How to identify tasks that are held up?  How to assign tasks to the right resources?  How to keep track of status of each task?  Use a work management solution to manage it all 40
  40. 40. 41 Reduce average Cost per Premise Passed (CPPP) from NZ$3,500 to less than NZ$1,500 The original challenge for Chorus
  41. 41. Field Engineer Designer Coordinator Resource Pool Design Civil Works Connection Feasibility Jobs & Tasks Manager Standardised Processes & Data Structure … etc.… etc. How work management solutions can help 42
  42. 42. Processes & procedures define how things need to be done and by whom What needs to be done gets loaded & organised in work management solution Work management then helps assign, schedule, manage & report on these items Work management done right 43
  43. 43. Benefits of work management solutions 44 Enables process optimisation, eliminates waste, automates manual tasks and removes bottlenecks Removes the barriers to effective contractor management by providing a collaborative operating model between the operator and its contractors Provides real-time strategic business intelligence and detailed reporting Deploys operational controls to ensure work is completed on time, in full and to specification Reduces project management & administration costs – including analysis, reporting, document management & communication
  44. 44. Current situation at Chorus 45 Cost Per Premise Passed: Projected to be NZ$2,134 Now: within range of NZ$1,700 to NZ$1,770
  45. 45. Session wrap-up Marlies Van der Wee 46
  46. 46. Something to remember?  Clear government role in fiber deployment  Significant control in return for direct investment  Cost-coverage trade-off in design decision  Led to two separate projects: UFB and RBI  Phased approach: learning as-you-go  Supported by work management solution 47
  47. 47. Next steps for New Zealand?  Reducing uncertainty in regulation  Revision of the Telecommunications Act of 2001  Different proposals…  Extension to both projects  FTTH to at least 80% of homes  Mobile Black Spot Fund -> coverage to highways and key tourist areas 48 ?
  48. 48. FTTH Council Europe, February 2016 Thank you for your attention! Any questions? www.technoeconomics.ugent.be

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