Reggefiber presentation


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Presentation given by Hans Dekker - Reggefiber during the INCA and NextGen 'Dutch Light' visit to the Netherlands - 7 and 8 March 2012

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Reggefiber presentation

  1. 1. Reggefiber General OverviewVisiting Fujitsu Telecom, CityFibre Holdings, INCA and KCOM Jan Davids Directeur Corporate & Business Development 1 | 21
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  3. 3. Reggefiber’s headoffice marks start of Fiber roll out in NL 3 | 21
  4. 4. Company Overview• Reggefiber is the leading provider of Fiber-to-the-Home (“FttH”) in the Netherlands and a Joint Venture between KPN and Reggeborgh. Its success based rollout strategy has resulted in an uptake of around 60% in (nearly) completed projects• Reggefiber has successfully developed and introduced an open access business model with a focus on delivering a passive (dark fiber) FttH infrastructure to active operators. Reggefiber builds, owns and operates the infrastructure• Reggefiber is well positioned to benefit from the high broadband penetration in the Netherlands and the increasing demand for (symmetrical) bandwidth, the market trends towards single access, the company’s extensive FttH experience, strong shareholders and the regulatory certainty 4 | 21
  5. 5. Company OverviewReggefiber: building and operating passive FttH networks in the Netherlands• Reggefiber builds, owns and operates passive (dark fiber) FttH networks• Reggefiber FttH Projects in more than 150 cities in the Netherlands • 951,000 Homes Passed with 277,000 Homes Activated per Q4 2011 • Reggefiber’s ambition is to realize a large scale success-based rollout• Passive infrastructure delivered to active operators in an open access model, enabling: • Active operators to deliver active networks to service providers as a wholesale service • Service providers to deliver services (RTV / Internet / telephone) to consumers over active networks• Current active operators (customers) include Reggefiber Wholesale (part of Reggefiber), KPN Wholesale & Operations, BBNed (Tele 2), Edutel and Solcon• Tariffs and passive network access regulated by OPTA (published December 2008) and NMa remedies 5 | 21
  6. 6. Company OverviewAbout the Reggefiber joint venture and its shareholders• KPN is the Dutch incumbent and provides high-quality telephone, internet and television services and products and is an all-round provider of ICT services. • KPN is market leader in the copper fixed line with more than 3.6 million customers • KPN is market leader in broadband internet access with 2.5 million customers (Q3 ‘11) • KPN is a successful challenger in TV with 1.3 million customers (Q3 ‘11) • KPN is financially strong with an EBITDA of EUR 5.5 bn and revenues of EUR 13.4 bn (over ‘10)• Reggeborgh is the private investment company of the Wessels family and is active in construction, energy, real estate, and building and operating (fiber optical) communication networks 6 | 21
  7. 7. Company OverviewStrategic rationale cooperation Reggefiber and KPNThe cooperation between Reggefiber and KPN is mutually exclusive in respect to the construction andoperation of passive FttH networks in the NetherlandsStrategic rationale for Reggefiber: • Reggefiber has been successful in acquiring customers in competition with cable and KPN; cooperation with KPN will further increase the penetration on Reggefiber’s network and lowers the risks of rolling out • Offers direct access to large installed customer base for migration to FttH • KPN is a financially strong and committed co-shareholder • Provides extensive experience and knowledge of the telecom sectorStrategic rationale for KPN: • Taking part in Reggefiber is necessary in light of the trend towards single access and maintaining a substantial share of the consumer market • Reggefiber’s expertise and experience in building FttH networks and associated demand aggregation in combination with successful existing projects provide KPN with a jumpstart in FttH 7 | 21
  8. 8. Company OverviewCorporate Structure Supervisory Board: • Herman Hazewinkel – Chairman (former CEO Volker Wessels Stevin) • Dik Wessels (founder Reggeborgh) • Eelco Blok (chairman executive board KPN) Management Board • Bert Nijboer – CEO • Jan van Rooijen – CFO • Jordi Nieuwenhuis – Director • Jan Davids – Director Corporate Development • Arian Lodder – Director Construction and Operations Entities and roles • NEM subsidiaries – network owners • Reggefiber ttH B.V. – project organization • Reggefiber Operator B.V. – passive operator • Reggefiber Wholesale B.V. – active operator (*) (*) November 8, 2011 Reggefiber has reached an agreement with KPN to sell its non- passive FttH activities, including Reggefiber Wholesale B.V. to KPN (subject to NMa approval) 8 | 21
  9. 9. Business model Passive FttH network open to all active operators and their service providers Business model – parties involved and value chain Consumer broadband CONSUMERS subscription packages EUR 40 – 110 (triple play) SP SP KPN SP SP SP Service Providers• Deliver services to consumers Wholesale• Communicate to consumers agreements Wholesale broadband access EUR 35 – 42 (triple play) Reggefiber 3rd party Active Active Operators KPN W&O Wholesale BV Operators• Buy in capacity on Reggefiber’s passive fiber network• Deliver wholesale fiber services ODF Agreement to service providers ODF Access EUR 12 – 17.50 [*] Passive Operator Reggefiber Operator BV• Builds, owns and operates the passive fiber network• Delivers open access to active Management Agreement Indicative monthly price operators ranges per active NEMs connection [*] excludes one-off fees, line rentals etc. 9 | 21
  10. 10. Business modelBusiness model – parties involved and value chainService providers• Deliver services over fiber to consumers• Communicate to consumers on services over fiberActive operators• Buy in capacity from Reggefiber’s passive fiber network• Deliver wholesale fiber services to service providersReggefiber (passive operator)• Builder, owner and operator of the passive fiber network• Delivers open access to active operators, including KPN 10 | 21
  11. 11. Business model – network architecture • As many homes as possible will be connected to a Fiber Termination Unit (FTU) in the metering cupboard inside the home • About 2.500 homes are connected to an Area-POP (AP) with two fibers. Here ODF access can be obtained • Max 8 AP’s are connected to a City PoP (CP) using a ring structure (city ring) Network Termina- Reggefiber’s city ring tion Unit FTU Network Active AP AP AP 2 fibers Operator APBackbone Equipment AP CP Active 2.500 homesActive Operator Equipment Operator Active Operator AP AP AP = Reggefiber’s passive network = Equipment Active Operator 11 | 21
  12. 12. Business model – Demand based roll-outMarketing• Key for a successful rollout is creating momentum in local communities, among others through ‘local ambassadors’ (churches, sports clubs, neighbourhood councils etc.)• Marketing to consumers: • During roll-out the fibre network is marketed by Reggefiber • Consumer services typically marketed by service providers Information session Edutel June 17th 2008 12 | 21
  13. 13. Business model – Demand based roll-out • With a target start penetration of 30% of the homes passed Reggefiber ensures a minimum start penetration before starting the construction • This is a sales formula formerly used in the Blue Projects in Ringfence 1 (excluding project Deventer) and has been refreshed and sharpened by our new marketing communication campaign “Eindelijk Glasvezel” (“At last FttH”) • Also new ISP’s like Vodafone and XS4All participate in the demand based roll out • Reggefiber has established a separate Sales & Marketing organization from the Construction Organization since the end of 2010. Main role is creating awareness on FttH, coordinating the demand based roll out process with ISP’s and consumers and thereby supporting the sales of all ISP’s 13 | 21
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  15. 15. Business model – Roll-out • Reggefiber’s ambition is to realize a large scale success-based rollout: • Realized in 2011: 293,000 • Planned in 2012: 400.000 • Planned in 2013: 500.000 • Existing FttH Projects: 15 | 21
  16. 16. Business model – Innovations Prefab PoP Ducts Universal FTU 16 | 21
  17. 17. The market – ReggefiberThe Reggefiber experience: initial success for FttH in competitive Dutch broadbandmarket• In market with decreasing prices per Mb/s delivered, evidence suggests that consumers do not trade down to reduce costs but rather upgrade capacity – resulting in stable prices with increasing bandwidths• Symmetrical connections arguably a different market than ‘regular’ broadband; once obtained consumers not willing to trade back to asymmetrical lines with same download capacity• Reggefiber experience from existing projects: • Willingness among consumers to pay extra for (triple play) fiber, with uptake rates as high as 60 – 70% • Churn very low (in conformity with evidence abroad): ca.4% on an annual basis for the service providers currently active on Reggefiber networks • An 60% of new subscriptions are consumers upgrading from ADSL lines, with and 40% coming from cable • Over 75% of consumers on Reggefiber operated FttH network have triple play • FttH customers show much higher bandwidth usage than typical ADSL user • FttH networks net uploaders to the Internet (caused a.o. by p2p applications) 17 | 21
  18. 18. The market: Reggefiber footprint 18 | 21
  19. 19. The Market – Reggefiber’s market share Homes Passed Q4 2011 Reggefiber SURFnet CIF OBR 951.000 Other 19 | 21
  20. 20. Concluding remarks• Reggefiber has proven it is able to roll out and operate large numbers of Homes efficiently• Reggefiber’s shareholders are fully committed to FttH. KPN has fully shown this by acquiring Reggefiber’s non-passive activities and Reggeborgh’s Service Providers• New promising Service Providers are entering the FttH-market• Looking at the large increase in HA in 2011, there definitely is a market for FttH(-services) and Service Providers are capable of providing attractive Services to end-users 20 | 21
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