BPN 1574 Dramatic slowdown in Dutch FTTH

Telecompaper reports:
a. dramatic slowdown in Dutch FTTH in 2010;
b. Household penetration forecast to reach 14% by 2015



The Dutch telecom research organisation Telecompaper has published its fifth annual report on the Dutch FTTH market. A host of new players has entered the market, and FTTH initiatives are underway in no fewer than 205 municipalities, almost half of the nation's 418. However, roll-out is going slower than some may hope. Adverse weather conditions (a lengthy frost period) hit the overall market, and Reggefiber's roll-out in Amsterdam also saw a dramatic slowdown. Connecting homes in metropolitan areas has proven challenging. Competitive factors have held back FTTH as well, such as the nationwide availability of Docsis 3.0 (offering speeds up to 120 Mbps), the absence of well-known brand names on FTTH (such as Tele2 and Online), and^ KPN's focus on shareholder remuneration. The latter forced Reggefiber to raise outside debt from an EIB-led consortium in a much delayed process which took almost a full year.
　
The Telecompaper report distinguishes between fibre-to-the-home and fibre-to-the-building (FTTB, also called Ethernet-to-the-home). By year-end 2010, we estimate the number of homes passed with FTTH or FTTB at 714,600. This compares to a combined 541,600 homes passed at the end of 2009.
　
Telecompaper expects the roll-out of FTTH to accelerate over the next few years. By the end of 2015, these two technologies combined stand to reach almost 2.5 million homes passed and over 1 million subscribers. The report also provides estimates on the market shares of the service providers in the Reggefiber ecosystem. The OnsNet cooperatives in Noord-Brabant lead the market with a combined 41 percent share.
　
For the fifth annual FTTH report, Telecompaper interviewed 17 market participants. The report describes the current state of the market and market dynamics evident in 2010, and provides estimates for the period through 2015. Many of the new and existing players are brought under the spotlight. Buyers of the report receive free access to our Broadband NL 2011 conference on 12 October, as well as a free copy of last year's report. Telecompaper is also preparing a national database of FTTH projects down to the city and borough level, to which access can be acquired on a subscription basis.

Please watch this space. I will have a comment on the slowdown tomorrow!

BPN 1574

Aussies and Kiwis sampling Dutch broadband (5)

Especially the civil servant in the Aussies and Kiwis trade delegation were eager to hear about the involvement of the government in the pushing of Fibre to the Home (FttH) networks. The first that they arrived they already upset the program set up by Paul Budde and Fred Kappeteijn. While in Amsterdam they wanted to know everything about CityNet and how do you get it off the ground. Also on Tuesday it remained a subject of interest. And when they were in Almere they still were eager to learn how to set up an FttH network and keep it an Open Net.

Of course Amsterdam is the most interesting case as the city has invested 6 million euro and is now under scrutiny of the European Commission. The municipality of Almere has not put any money in it the FttH network, which will be laid from 2007 till 2010. Also the municipality of Nuenen did not put money in the network.

(c) Elaine Sullivan

The Netherlands is not the only country working on FttH networks. IN Japan 300.000 FttH connections per month will be realised by 2008. In Europe the battle for Paris is on. The Iliad network will go after 1 million homes at 1 billion euro. Neuf Cegetel wants to have 250.000 FttH connections at 50Mbps for 29,90! The incumbent France Telecom starts FttH connections at 100/10 Mbps for 44,90 in Paris, Poitiers, Marseille, Lille, Toulouse and Lyon. Noos Numericable puts in a massive investment. In the department Haute-de-Seine 1,5 million household connections are aimed at as well as 100.000 SME connections at 50 to 70 million euro. All in all no less than 100 broadband projects are under way in France. In Cologne in Germany a broadband project is going on as well as in Schwerte, Norderstadt, Hamburg and Gelsenkirche. But there are also projects in Vienna (Austria) and Zurich (Switzerland), while in Denmark an FttH network project has been taken up by an energy company, which will connect 35 percent of the homes and reach 50 percent of all Danish people. In the UK there is a project in Oxfordshire. In the rest of the UK the slogan is: 12/1 Mbps is enough for all and ever. Of course FastWeb in Milan is the most operational project in Europe.

Essential to the Open Net is the three layer model. There is a point to point connection for an unbundled local loop; this provides the largest capacity for future growth. The active layer has active Ethernet. On top of that is the application service layer. Any service provider can use the application service layer against the same conditions.

In Amsterdam the municipality is represented in the board of network. And Amsterdam has invested 6 million euro. Amsterdam claims that it did so under company conditions. In Almere the municipality is also represented in the board, but it will not invest in the network. In fact the municipality does not have to do this as an investor has been found and an operator, most likely KPN, will take care of the operations.

In all cases people ask, why an open network is the option. The answer comes from economics. A closed network will give a return upon investment of 8 percent, while an open network will yield 10 percent return upon investment.

Blog Posting Number: 696

Tags; Open network, FttH

Aussies and Kiwis sampling Dutch broadband (4)

On March 13, 2007 the Australian and New Zealand trade delegation had a day full of lectures. One of the lectures was about the future All-IP network of KPN and the regulatory challenges for the telecom watchdog OPTA.

The Netherlands is on top the listings concerning broadband penetration in the homes. And at a reasonable price due to the competition. Cable networks cover 94 percent of the country, while the telephone network covers 99 percent. The telephone network infrastructure is run by the incumbent KPN telecom company. Some DSL operators have their own networks, but 50 to 70 percent of the DSL operators have to rent local loops. There are 5 million broadband connections in the Netherlands of which 60 percent are DSL connections, of which 10 percent is non KPN, and 40 percent cable connections. There are about 40+ local initiatives with Fibre to the Home (FttH). There are now half a million homes connected with FttH, mostly student houses.

The environment in The Netherlands has grown competitive. KPN lost 0,56 million access lines last year. Voice over broadband overtook the plain old telephone system. Digital television is already in 25 percent o the 6,9 households. Triple play offers are made by the telecom companies like KPN and Tele-2, by the cable companies and by private FttH operators. Unbundling (ULL) has been operative since 2000 based on the principles of access, prices, transparency, non-discrimination, accounting and separation.

So you might think that the Dutch have it all under control. But KPN surprised the telecom, cable and FttH market in 2005 by announcing a national All-IP network. This would entail that the layer of all exchanges, including the rented spaces and equipment of the DSL operators, would be taken out and the fibre network will be linked to 28.000 street cabinets. The bandwidth would be upgraded to 50Mbps and up to 100 Mbps for business. KPN would make an investment of 0,9 billion euro. But the exchanges/MDF locations would give KPN a return of 1 billion euro. The roll out will start in 2007 and the network needs to be finished by 2010. For KPN it means that it can phase out the present technology, which is at the end of its cycle, and start competing with the cable operators.

The challenge for the regulator is of course in the fact that KPN start to dominate the playing field and starts changing the business cases of the DSL and FttH operators. The New Generation Network (NGN) requires another regulatory environment than the good old legacy regulation. Of course the NGN might also move to a duopoly.

The NGN is now under study with the telecom watchdog OPTA. Basic principle is that KPN has the freedom to upgrade the network and terminate the exchanges and MDF model. Replacing the MDF model would be a sub loop unbundling (SLU). But KPN has not yet suggested any rules or prices. OPTA hopes that the draft decisions are available by the second quarter of 2007.

The question was put in by some delegates why KPN would put in an All-IP network. Was it just replacing technology at zero cost or was it to shake up the competition in the telecom and sector? Not a few delegates and visitors were inclined to guess that it was the competition argument.

Blog Posting Number: 695

Tags: New Generation Network, All-IP network, DSL, broadband, Fibre to the Home, cable