FTTHForum 2011 Frans van Camp, XS Insight

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FTTHForum 2011 Frans van Camp, XS Insight

  1. 1. Dealing With The Fiber Transition FTTH Forum Budapest November 9, 2011 Frans van Camp
  2. 2. Dealing with the Fiber Transition• Fiber Transition• Fiber Transition Model• Insights from CA study
  3. 3. Landscape is changing fast CABLE INCUMBENTS DVB-TDVB-C TV IPTVDOCSIS Internet xDSL POTS VoIP Telephony ISDN VoIPTV is main battleground and key driver of FTTH deployments
  4. 4. Timing fiber investment crucial• Incumbents need fiber to compete• Incumbents face Catch-22 situation – Too early : insufficient demand – Too late : churn to cable• Decisions determine long term success and maybe even survival
  5. 5. Decision support tools have serious shortcomings• Subjective market share estimates• Static competitive environment• No holistic approach
  6. 6. FTM uses conjoint analysis to model customer behavior• Products are collections of attributes• CA determines utility per attribute• Utilities translate into preference shares
  7. 7. FTM offers dynamic modeling of elaborate scenarios• Unlimited number of actors, each with own technology roadmap – Passive/active operator, service provider – Common technologies, incl. unbundling and WBA• Each technology has own roll-out scenario – 4 pro-active scenarios, incl. own roll-out plan – 3 reactive scenarios
  8. 8. FTM offers dynamic modeling of elaborate scenarios • CA data set preloaded • Option: own CA data sets • Demand development • Customer migration • Customer inertia • Demand aggregation • Data visualization • ...
  9. 9. Insights from CA study• Fiber enjoys a limited premium• Avoid ‘build-it-and-they-will-come’ strategies• Continue investment in xDSL infrastructure• Cable is in comfortable position• AltOps face constant margin squeeze
  10. 10. Fiber enjoys a limited premium Attribute Importance Download:Upload ~5:1 Fiber Premium >60%PriceTe le phony Provide r Upload Download #channe ls 8-15% Or ~€5 in absolute terms#HD channe ls
  11. 11. Avoid ‘build-it-and-they-will- come’ strategies Demand threshold Assumptions 40% • 3 xDSL providers – KPN – Tele2 30% – Online • 1 cable operator (UPC) 100/100/€85 Gap of ~10% to • 1 Fiber provider (KPN) 60/60/€55 be closed by marketing push • Instant migration, no 30/30/€45 customer inertia Autonomous demand
  12. 12. Continue investment in xDSL infrastructure Cable Vectoring xDSL Pair bonding
  13. 13. Cable is in comfortable position Cable trumps xDSL... ...and fiber... ...unless prices decrease xDSL Cable Cable Fiber Cable Fiber 20/2/€35 1.07 25/1.5/€35 25/1.5/€35 1.16 30/30/€45 25/1.5/€35 = 30/30/€36 40/3/€45 1.28 60/6/€35 60/6/€35 1.4 50/50/€55 60/6/€35 = 50/50/€37  120/10/€55 120/10/€55 2.0 100/100/€85 120/10/€55 = 100/100/€51 20-40% lower pricesx = Comparative attractiveness cable= = Equally attractive
  14. 14. AltOps face constant margin squeeze Retail price Price premium 10-15%Scale premium Operating cost Wholesale price Incumbent AltOp
  15. 15. www.xsinsight.comwww.fibertransitionmodel.com

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