FIBRE FUNDING BUSINESS & FINANCE
SECTION HEADER NEXT-GENERATION NETWORKS
Governments and incumbents are still working out the dynamics of funding new fi bre networks in regions where fi nancial models do not always stack up. By Ian Kemp
female prime minister in the country’s history, taking over from Kevin Rudd as leader of the ruling Labor Party; and tele- coms incumbent Telstra struck an agreement in principle for the govern- ment to use its infrastructure in the construction of the planned nationwide next-generation wholesale fibre network. The two developments may not be
T
linked, but political vicissitudes are one indication of how easily the rate of growth of fibre services could be impacted, as well as the extent of the funding burden on operators. The next-generation broadband network (NBN) was one of Rudd’s key 2007 campaign pledges in Australia, but the main opposition conservative Liberal- National coalition has said it will scrap the project if it wins office in the next Federal Election—due by April 2011, but which could be called as early as August. In the UK, meanwhile, the new
Conservative-Liberal Democrat coalition in June confirmed that it will not imple- ment the 50-pence-per-month landline tax proposed by the former Labour government. The tax was intended to raise up to £175 million per year to help fund next-generation network build, particu- larly in rural areas, and ensure minimum 2-Megabits-per-second broadband to all homes by 2012. “Instead, we will support private broadband investment, including to rural areas, in part with funding from the digital switchover under-spend within the TV licence fee,” said chancellor George Osborne in his first budget speech. Then on 15 July the government said it would delay the 2-Mbps commit- ment to 2015, blaming a lack of funding by the former government. The burden on incumbents could
become greater as regulators look to encourage fibre competition. In June the European Commission upheld Ofcom’s
10
he end of June marked two signif- icant developments in Australia: Julia Gillard became the first
decision to allow BT to provide only virtual unbundling of its next-generation network for four years, provided physical unbun- dling follows; a similar ruling was made in respect to Telekom Austria in July. Meanwhile the Telstra agreement—
which comes with an A$11 billion payment to help it decommission its copper network and migrate traffic to the govern- ment-owned NGN—in effect puts an end to the incumbent’s resistance to undergo- ing structural separation just as BT was mandated to do; it also opens the door to Telstra putting in a bid to construct some of the new network. Keeping the Australian NGN in the
hands of the government should mean more widespread coverage in a country with a dispersed population over a huge land area. But governments elsewhere are still grappling with how to fund fibre rollout in rural areas not likely to be commercially viable for operators. In June the French government said it
will provide €30 million in funding for several dozen fibre network projects in rural regions . And in Italy the regulator in July called for Telecom Italia to work together with a rival consortium to build a common fibre infrastructure. Currently, the incumbent plans to offer 100-Mbps broadband to 50% of the population by 2018, and to invest €7 billion in its fixed- line network upgrade in the next three years. In the rival plan, Fastweb, Vodafone,
FTTH/B subscribers, end 2009 Rank
1 2 3 4 5 6 7 8 9
10
Country Japan
Russia Taiwan
South Korea 9,228,300 USA
5,700,000 3,040,000 1,675,000
Hong Kong 770,000 China (1) Sweden Italy
France
710,000 537,100 325,000 308,200
(1) Not included are the roughly 17 million FTTx + LAN subscribers in China
Source: IDATE
FTTH/B subscribers 17,140,000
Wind and Tiscali aim to invest a combined €2.5 billion to bring broadband to Italy’s 15 largest cities in the next five years. As for the UK, spending commitments
already made by operators have for some time looked like eclipsing the promise of public funding accrued yearly through taxes—not to mention the deeply unam- bitious government broadband target of 2-Mbps speeds. Now operators are accel- erating their spending and rollout timescales. BT in May said it will invest an extra £1 billion in its access network to bring fibre broadband at speeds of 40–100 Mbps to two-thirds of the UK by 2015; it had already set aside £1.5 billion in July 2008 for fibre rollout. Virgin Media has said it will begin providing 100-Mbps broadband services by the end of this year; the cable operator’s 50-Mbps service already passes half of UK households. And among altnets, Fibrecity is building an open access fibre network and has set a goal to bring 1-Gigabit-per-second serv- ices to 1 million homes in four years. Yet the Fibre To The Home Council,
citing research it commissioned by analysts at Heavy Reading, says the UK is in danger of falling behind other Western European countries and creating a new digital divide for NGN services. It predicts the UK will be the last nation in Europe among 38 countries surveyed to reach “fibre maturity”, defined as 20% of house- holds having a broadband subscription over an FTTH network. The new study forecasts the UK will reach this milestone in 2020, between two and four years later than the other major G20 European econ- omies of France, Germany and Italy. Sweden is expected to reach that level in 2011 and the Netherlands in 2014. “The Council is also concerned that the
UK government’s emphasis on reducing the budget deficit will push FTTH infra- structure investments even further onto the sidelines,” said the FTTH Council in a statement. “Furthermore, at present
www.totaltele.com July/August 2010
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36