[Benoit Felten, an analyst at Yankee Group has recently published an excellent report on the economics of FTTh, and why an open access infrastructure makes business sense for cariers like that being deployed by KPN in Netherlands (in partnership with RegenFibe and CityNet) , Swisscom and others.
He notes in his report that “ The business model for fiber to the home (FTTH) is a tough one to make fly. Despite the increasing pressure (competitive and political) for wireline copper operators to upgrade their networks to FTTH, the economics of the business model scare both the telcos themselves and their shareholders or financiers… It’s virtually impossible for FTTH to pay for itself in less than five years unless takeup is at least 30 percent, and even then a time frame of seven to eight years is more realistic considering known conditions in most developed markets” This bleak assessment of the business case for FTTH applies not only to carriers but also to municipal fiber builders as well.
However M. Felten clearly demonstrates that “Although it might be perceived by most incumbents as going against the grain, opening up a new FTTH network to competitors is actually an efficient way to increase takeup without sacrificing strategic positioning. It has a significant impact on the reduction of the payback as it generates additional revenue from low ARPU but high-margin wholesale customers.”
I would also add that if the carrier deploys point to point open access fiber infrastructure it opens up new business opportunities such as customer owned fiber (as advocated by Google and others) and bundling cost of fiber and Internet with customer’s energy bill, as in the case of Swisscom. For more details please contact Benoit Felten at Yankee Group BFelten@yankeegroup.com or visit his excellent blog on the subject http://www.fiberevolution.com/ -- BSA]
No comments:
Post a Comment