FTTH Business Guide - AWT.be

So how much market share is it reasonable to expect? Experience of FTTH
operators indicates that first year penetration rates in areas with no fibre, cable or
fast DSL competition can be as high as 50 percent, but conservatively 20-30
percent is perhaps more realistic. The final penetration in the same area might be
as high as 70 percent, but again you have to estimate the realistic penetration and
this will also depend on the ability and willingness to pay.
The competitive environment will be the major influence on the market share that
you can expect to achieve. The maturity of broadband and triple-play local
markets varies greatly across Europe. On the one hand, in Greece there is no
cable television and ADSL only became widely available and affordable in 2008.
On the other hand in Sweden there are many areas where FTTH and cable
compete and ADSL has been more or less squeezed out of the market.
In general, it is easier to gain traction in a growing market, although it is also
entirely possible to convert a local market from lower broadband speeds to highspeed
broadband.
Places that are not served by broadband clearly offer the best prospects; however,
broadband “notspots” – locations too far from the telephone exchange to receive
DSL services – tend to be geographically diverse, and therefore more expensive to
connect with fibre.
The most risky proposition is a market that already has good FTTH coverage. All
other factors being equal, the presence of an existing FTTH operator immediately
reduces your addressable market by 50 percent – why should you expect to get
more than your fair share of the market? In practise, you are likely to be
competing for the unaddressed portion of the market, which is likely to be a
harder sell – if they didn’t want fibre from the first service provider, why would
they want it from a second?
Back to basics
FTTH technology has inherently advantages when it comes to providing a range of
new services, but don’t get carried away. Getting the basics right – fast, reliable
broadband – is a good way to secure customer loyalty. Broadband on its own is a
profitable product – in fact it is the most profitable product for carriers, according
to research.
One way to avoid mistakes that could alienate future customers is to run a trial.
Limit your commercial launch to a beta test group that fully understands that you
will be testing your services, and is prepared to expect the teething problems. Do
not expand beyond your beta group until the system is up and running properly
and has been thoroughly tested.
37 www.ftthcouncil.eu