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As an <strong>FTTH</strong> network owner, your interest could stop at any of the three levels in<br />
the value chain. Indeed, the same organisation could have different interests in<br />
different geographical areas, depending on the local market and the availability of<br />
potential business partners.<br />
Each type of operational model has its own opportunities and challenges, which<br />
are summarized in the following table:<br />
Vertically integrated<br />
Wholesale operator<br />
Passive network<br />
owner only<br />
Pros Cons<br />
You control total value chain Complex operation and high<br />
and cash flow profile.<br />
execution risk.<br />
Capture extra margin for Must <strong>be</strong> technically credible<br />
modest incremental<br />
yet flexible. Small operators<br />
investment.<br />
may struggle due to lack of<br />
commercial and operational<br />
standards for wholesale.<br />
Simple operations.<br />
Lack of direct control over<br />
About 50% of the revenue the revenue stream and<br />
potential.<br />
marketing to the end-user.<br />
Deciding which operational model to chose is fundamental, as it will determine<br />
the business model of your activities and your financial model. This decision,<br />
however, is also dependent on the regulations within the territory you are<br />
planning to operate, the competitive environment, and your core business<br />
activities and competencies.<br />
23 www.ftthcouncil.eu
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