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which is relatively densely populated,
according to a spokesman. Analysts say
bT has estimated the cost of a national
fibre rollout as equating approximately to
£1,000 per household passed.
“The roi for fTTh is 12 to 17 years,
which makes it extremely challenging for
traditional operators,” says stuart orr,
head of european communications at
Operator plans: some recent fibre project commitments
Accenture. “who pays? end users? [And
is it funded by] government bonds? or
[by sales of] content?”
nevertheless, there is hope that additional
capacity will spur the usage of new
services such as 3d TV, high-speed
gaming, or the delivery of health, education
and other social services over very
high-speed broadband connections. if
The European Union’s ambitious goals for member states to provide very high-speed
broadband access networks mean governments will be under pressure to do more to
encourage FTTH build-out. The European Union’s Digital Agenda 2020 has set a target of
providing all EU citizens with broadband access above 30 Megabits per second (Mbps),
with 50% or more households accessing speeds of over 100 Mbps, at an estimated cost
of between E250-E300 billion.
In the UK, BT’s announcements have spurred other companies to plan competitive
strategies. Fujitsu plans to spend £1.5–£2 billion to roll out fibre over the next 3–5 years, of
which around £500 million is expected to come from the UK government. It says in order to
develop a sustainable wholesale economic model and attract national retailers—it is already
talking with Virgin Media and TalkTalk as possible customers—at least 5 million homes need
to be passed. And Telefonica’s 02 in June announced it will conduct commercial FTTH trials
in the UK towards the end of this year; 02 has carried out significant local loop unbundling
in the UK.
Several other key FTTH projects in Europe have been announced in recent months. In
March, Deutsche Telekom set out its strategy to connect 160,000 households in selected
districts of 10 German cities to FTTH this year, enabling downstream speeds of 1 Gigabit
per second (Gbps) and upstream speeds of 500 Mbps. The incumbent has previously said
it will cover 36% of households with superfast broadband by the end of 2012, of which 10%
will be FTTH. Analysts at AD Little / Exane BNP Paribas estimate Deutsche Telekom has
earmarked capex of E5 billion for FTTx rollout.
In June, TeliaSonera said it will invest more than 8 billion Swedish kronor (about E900
million) in fibre networks across its territories by the end of 2014, with some SEK5 billion
of that earmarked for Sweden and the remainder for Finland, Denmark, Norway, Estonia,
Lithuania and Latvia. It has set a target of covering 1 million homes in Sweden with direct
fibre broadband connections and a further 1.3 million households in the Nordic and Baltic
countries during the period.
France Telecom earlier this year set out plans to reach 60% of households, or some 15
million homes, with FTTH by 2020, with an interim target of 10 million households by 2015.
The operator said it will spend €2 billion to the end of 2015 to build out the network. Iliad
is targeting 4 million households; and Bouygues Telecom and SFR at the end of last year
signed an agreement to co-invest in fibre networks in high population density areas targeting
3 million homes, while the companies also have plans to build their own fibre networks.
In Italy, 2.5 million homes had been passed and there were 348,000 fibre subscribers by
the end of last year, according to the FTTH Council Europe. Telecom Italia has said it plans
to cover 10% of households with fibre by 2016 and has committed up to E3.4 billion in
capex; and a E2.5 billion joint project between Fastweb, Vodafone and Wind aims to bring
FTTH within reach of 10 million people in Italy’s fifteen largest cities by 2015.
In Spain, Telefonica has said it will extend its fibre footprint from around 300,000 homes at
the end of February to 1 million by the end of this year. It has committed around E1 billion
in capex so far.
According to the The FTTH Council, Eastern European countries lead the way when it
comes to FTTH subscriber penetration in the continent currently, with Lithuania in the top
spot at the end of last year followed by Sweden, Norway, Slovenia and Slovakia. In May,
Lithuanian operator TEO said its FTTH network covered 570,000 households, roughly half
the country’s population.
Globally, China is set to dominate the FTTx market. In a new report Ovum predicts that
China’s FTTx subscribers will reach 100 million in 2016, representing more than 50% of
the world’s subscribers. In July, China Telecom selected Alcatel-Lucent as a vendor for its
Broadband China Fibre Cities project, which this year aims to connect 26 million people to
high-speed Internet services. The operator says by 2015 it will cover 100 million households
with FTTH and aims to have some 30 million FTTH subscribers.
people are presented “with a genuinely
two-way pipe…all kinds of cloud and
upload become much more viable” and
the use of broadband may change, says
wood at Analysys Mason.
in addition, operators could encourage
very high-speed broadband take-up by
offering premium services exclusively
over fTTh. “if the operator tries to price
the service based on available bandwidth
it doesn’t resonate,” says Ana pesovic,
wireline marketing manager at Alcatellucent.
“[instead], operators can consider
offering services, such as premium sport,
uniquely over fibre in order to encourage
the transition.”
operators could also use fTTh to
explore new business models, such as
providing huge pipes of bandwidth that
make “the expensive clobber of quality of
service in streaming…an expensive irrelevance”,
says wood. in turn that could
circumvent some net neutrality concerns
currently playing out in europe.
but for other operators the success of
over-the-top content services raises
doubts about their ability to charge for
their own differentiated content.
Much could also depend on regulation
in individual countries in future, should
european regulators support servicebased
competition and make it hard to
develop new wholesale or charging
models that place a premium on overthe-top
content providers’ services. karl
wermig, head of ngA customer solutions,
eMeA, at Alcatel-lucent, says
europe’s operators are currently wondering:
“do i have to let everyone use my
network? There are a lot of politics and
economics involved.”
in June, for example, the dutch parliament
banned mobile network providers
from charging customers extra for using
over-the-top internet calling and messaging
services such as skype and whatApp.
currently, Vodafone in the netherlands
charges customers an additional fee to
use skype on smartphones and T-Mobile
prohibits subscribers from using it altogether.
The dutch parliament’s move
raises questions about how much leeway
operators have to develop new wholesale
or consumer charging models whether
12 www.totaltele.com July/August 2011