FTTH Business Guide - AWT.be

Chapter 5: Deployment
In this chapter we ask the all-important question, how much will the network
cost? How much investment will be required to build the network, and how much
will be required to keep it going? Expenditure falls into three main categories:
� capital expenditure (CAPEX) – big ticket items paid for at the start of the
project, and during upgrades and extensions;
� operating expenditure (OPEX) – the cost of keeping the network running;
� cost of goods sold (COGS) – costs incurred when a sale is made.
In the following sections we consider the major influences on these items, and
offer some general advice on how to reduce costs during network deployment.
For technical information on FTTH equipment and deployment please refer to the
FTTH Handbook, which is available via the FTTH Council Europe website.
CAPEX
It is helpful to understand the relative contribution of each the different items of
capital expenditure, and thus the relative cost-saving potential. The chart below
shows a simplified CAPEX distribution for typical Greenfield FTTH deployments,
where no existing infrastructure can be reused. Civil works are the most
expensive item, and therefore offer the greatest potential for cost reduction – and
also the largest variance between different situations.
The other items are:
• CO actives – the active equipment in the central office
• subscriber actives – equipment installed at the customer premises
• material – fibre-optic cable, enclosures and other passive hardware
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