FTTH Business Guide - AWT.be

Rights-of-way
If you do not own all the land over which the FTTH network passes, then you will
have to pay the land owner for the right to put your fibre cables into the owner’s
ground or into the owner’s ducts. If you acquire the right by paying a lump sum, it
will be categorized as a capital expenditure; alternatively, in the case where you
pay a periodic rent (monthly, annual) it will be classified as an operational
expense. In other words, rights of way can be treated as CAPEX or OPEX, but
experience has shown that in most deployments it will be an operational expense.
Careful planning can have a positive effect on the costs associated with rights-ofway.
For example, if you are paying rent to deploy fibre in third party ducts, you
may be able to reduce your expense by opting for an architecture that uses fewer
fibres or cables.
Backhaul
Don’t forget to plan and budget for backhaul – your FTTH network needs to be
connected to the rest of the world. The cost of this will depend on whether you
own your own backhaul, lease fibre from another operator, or purchase a
bitstream product – in other words buy only the capacity that your network uses.
Unless you own your own fibre, backhaul costs will be an operational expense.
Bitstream costs for a fibre operator can be significant, depending on availability,
local pricing, and the degree of competition. The challenge then is to estimate and
cost the right usage per user, decide how much backhaul oversubscription (if any)
you will allow, and decide whether you want to use a cap on usage – this is not an
uncommon practise in regions with high IP transit costs.
It is not a good idea to have a single source of access for IP transit, in case of
failure. Your second access point should be able to cope with 80 percent of your
maximum traffic, even if this facility is not normally used.
Marketing
One activity often overlooked in business cases is the cost of attracting subscribers
to the network.
Where contracts can be agreed with landlords and/or tenant associations, the cost
of sale is spread across 50, 100, 500 or more potential customers. If you have to
try to sell to each individual tenant/home owner then you may need to use lowcost
approaches (e.g. leaflets) as advertising may not be justifiable for the limited
number of clients.
A shop in a roll-out area can be a good idea, depending on the size of your
business and your potential customer base. Customers need to be made aware of
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