Open Access Networks, presentation of broadbandservices presentation from New Zealand 2012

1. Zitius OPCO
"Experiences from the Swedish Market"
Sören Fernström, co-founder
”It’s not about technology it’s about relations and business models ”

2. Can you imagine?

3. Imagine an airport…
… with one Airline: … with many Airlines:
• Limitation of destinations • Limitless destinations
• No competition • Huge competition
• Fair prices? • Fair prices!
• Slow development • Freedom of choice

4. An airport for RSP:s
The universe of Zitius
• Freedom of choice 100/10 Mbps, NZD 33
• Many RSPs 1000/100 Mbps, NZD 37
VoIP, NZD 6
• Limitless variations of services IPTV (18 channels), NZD 24
• Huge competition 100Mbps Triple play, NZD 53
• Change RSP whenever you want (VoIP, IPTV, 100/10)
• Fair prices
UNCAPPED !!!!
RSP’s
OpCo=Lessee+manager of airport
NetCo=Infrastructure owner

5. Actions taken by
the Swedish Government
• In 1994 it was estimated that the need for fiber infrastructure in Sweden exceeded
250 000 km to reach out to 99% of the population, to a sum of €10 billion.
• The “Home PC” project ensured everyone could get a computer from their employer,
with high tax subsidy.
• The target for Swedish strategic Broadband service today is “before 2020 , 90% of all
Swedish citizens and company's should have >100 Mbps access”. Today we have
reached >10 Mbps.
• The City Networks around Sweden got huge government subsidies, under the
precondition that they also had to open up their networks for competition. Today
they are even forced to climb down in the food chain and stop distribute their own
broadband services.

6. The world is changing fast!
From monopoly to freedom of choice
• Fixed voice - Mobile Network – Skype
• Future?
• Freedom of Choice - Competition
• Problem, challenge or business opportunity?

7. A simple business model
Revenue stream
The subscriber receives a single
Subscriber
invoice per month from their RSP
RSP The OpCo invoices the RSP
OpCo The NetCo invoices the OpCo
NetCo

8. A simple business model
Sweden New Zealand
Subscriber Subscriber
RSP RSP
OpCo ?
NetCo NetCo

9. A close call
• We travelled all over Sweden (twice as big as New Zealand) for two
years to meet NetCos who where in big need for a helping hand
• Instead of signing contracts and do high margin business with
Landlords next door
• Those mistakes almost cost us our business

10. Facts we didn´t have
Average broadband penetration in Sweden = 54%
(Excluding retirement homes, and services accommodation)
Council/State Landlord Houses/Condominiums
•18% after 12 month •60% after 12 month
•25% after 24 month •70% after 24 month
•35% after 60 months •>80% after 60 months
•Competition from Cable and DSL •Competition from Cable and DSL
Private Landlord New Houses/Condominiums
•25% after 12 month •85% after 12 month
•35% after 24 month •87% after 24 month
•55% after 60 months •>87% after 60 months
•Competition from Cable and DSL

11. If we had the facts
Customers ranked by ROI Customers with the most need
1.New Condominiums/Houses 1.Council/State Landlords
2.Condominiums/Houses 2.Private Landlords
3.Private Landlords 3.Condominiums/Houses
4.Council/State Landlords 4.New Condominiums/Houses

12. Conclusion
• Go for the deal with the highest margin, not the biggest need
• Educate your customer
• Simplicity is far better then being unique
• Ensure Longevity, long relations is the key to success
• Do your homework, don´t ignore the facts like we did

13. Who will be the first Zitius in New Zealand?
“Internet is perhaps the most democratic medium in human history.
Therefore, it is the democratic state's responsibility to work for all
citizens in one way or another to access the Internet”