BPN 1747: Dutch telco KPN wants to redeem a precious IP brand

The Dutch telco KPN has published its intention to abolish the brand name of its IP subsidiary XS4ALL. This has led to a storm of indignation and solicited a petition to reconsider the decision, signed in the meantime by some 45.000 of the IP’s pioneers, subscribers and sympathizers. 

Dutch internet pioneer 

XS4ALL is one of the oldest Dutch IPs. It originated from the hackers’movement Hack-Tic and offered its internet services since May 1^st, 1993. On its first day it registered 500 subscribers, a score which was helped by one of the rare articles on internet in the national daily de Volkskrant. XS4ALL was one of the first Dutch pioneer IPs together with NLnet, Knoware and IAF. The foundation grew fast and gained speed, when beginning 1994 the Digital City in Amsterdam was launched.

By 1998 the Dutch scene of IPs had changed drastically. Competition between the new IPs had become fiercely, with competitors like Digital City, Planet Internet and World Online. In order to stay technically ahead, the foundation was faced with heavy investments, which they could not put on the table. So they put together a bidbook and offered that to the IP community. 

Wonderment 
The press and internet community was astonished when the winner was announced. The Dutch telco  KPN had beaten the other competitors, being in need of technical knowledge and having deep pockets. The astonishment was based on the difference in company mentality. KPN being a stock listed company and technical business was not in line with the free, anarchistic mentality of XS4ALL. Yet KPN guaranteed an independent course of management. 

Not just an IP 
XS4ALL was an early Dutch IP and kept its freshness from the beginning. So it stood side by side when the IP stood sideby side in a court case of a subscriber against the Scientology Church, which lasted from 1995 till 2005. In 1996 XS4ALL together with the Voice of America supported the continuation of the broadcasts of radio station B92 from Belgrado, which had been stopped by the then Federal Republic of Juguslavia. The IP was also a party in a censoring case with the German government. It also fought a legal battle in the Pirate Bay case with the Dutch copyright watchdog Brein. 

Shift

From 2016 a shift was noticed in the attitude of KPN towards XS4ALL. KPN parted with two independent foundations, which guarded over the origin and legacy of the internet pioneers. The attempt to take over the foundations failed and the annual contributions were stopped. But with the entry of anew CEO in 2018, a new marketing plan was developed: the brand name KPN would be leading for all subsidiary brand, including XS4ALL. The announcement on January 10, 2019 to say farewell to the brandname, sollicited immediate reaction from the subscribers, who threatened to discontinue their subscription. KPN tried to appease the subscribers saying that nothing would change in the service of XS4ALL, but that only the name of the pioneer company would be abolished. But the action committee of subscribers was not appeased. Of the more than 200.000 subscribers some 20.000 joined the action group as did some 25.000 of supporters. After a talk with KPN the group threatened to leave the KPN company and even start up a new company with the help of a third party.

BPN 1739: 25 years of consumer internet in the Netherlands

"On 1 May 1993, something remarkable happened. On that day, XS4ALL opened its server to the consumer. The management's objective was to acquire 500 customers in half a year. But at 7 o'clock in the evening, the 500th customer had already signed up. This success can largely be explained by the publication of the article "A continent that belongs to no one yet" by Francisco van Jole "(@2525) in the Volkskrant of the same day".

Besides (old) illustrations on the site of XS4ALL, there is also an old sound found. It is about the sound the handshake of a modem to the server of the IP. After the ringtone of DDS now also one of XS4ALL plus a happy birthday tune. 

 Text fragment: Toen digitale media nog nieuw waren - Pre-internet in de polder (1967-1997) - bit.ly/2e1T7ON. 

The following article is a translation of an article published by InCT.nl. 

25 years of the internet for Dutch consumers

On 1 May I congratulated my grandsons. They looked up from their phone and asked what. Of course, the congratulations were not for Labour Day, because they are still at school. I congratulated them on 25 years of the internet for Dutch consumers. They shrugged their shoulders and continued with their smartphones. For me, it is still a matter of guessing whether they know what consumers are.They know the term internet, but why celebrate an anniversary of something you use every day? Yes, they were still unborn when Dutch consumers were introduced to the phenomenon of the Internet (certainly, with a capital letter, because it was a new phenomenon at the time).

Illustration 1: The Volkskrant article of 1 May 1993

On May 1, 1993, I opened the Volkskrant and found an article with the headline 'A continent that belongs to no one yet' by Francisco van Jole. It was about the phenomenon of the Internet. According to language researcher Perry Feenstra, that word was only used 22 times in the national newspapers in that year.
 
Open to consumers
On the same day, the Internet organisation XS4ALL opened its service to consumers. It was anticipated that it would take between six months and a year for 500 subscribers to come forward. But the target was achieved that same evening. The article in de Volkskrant will undoubtedly have contributed to this. This made XS4ALL the first real internet organization to serve consumers as well as business customers.

The years prior to the launch of XS4ALL were confusing. In the Netherlands there was an online multi-flow country: there were ASCII, video and electronic messaging services and Bulletin Board Systems (BBS). In academia, something as vague as the Internet played a role and, since 1990, the Web. New companies were formed around this new movement, which mainly focused on business customers or associations such as the Hobby Computer Club. In 1992, 292 companies were customers of an Internet service provider. NLnet gave consumers - mostly former students - access, but did not believe that there was a consumer market.

Illustration 2: A map of the Netherlands with internet services, academic and business (1992/1993)

XS4ALL did not do the same thing. There the founders believed in a consumer market. The founders knew each other from the magazine Hac-Tic, which dealt with hacking, free calls, operating systems and services such as Bulletin Board Systems (BBS). The founders of XS4ALL also made use of NEABBS (Dutch First General Bulletin Board System), a BBS based in Amsterdam.

In 1993, XS4ALL was founded by Rop Gonggrijp, Paul Jongsma, Felipe Rodriquez and Cor Bosman. In a short space of time, they were able to develop their internet service into a company. In early 1994, for example, XS4ALL worked with De Digitale Stad (The Digital City). In that year the company also worked together with VPRO, which became the first broadcaster to work with the internet; in view of their visual material, they needed fast telephone lines and found them at the telecom service of the Dutch Railways. In 1994, the service was incorporated into a foundation and, since 1996, into a private limited company.

Illustration 3: Advertising of XS4ALL

XS4ALL was also the first to face lawsuits. For example, in 1995, the Church of Scientology filed a lawsuit against the publisher Karin Spaink Karin, the Internet service XS4ALL, and a number of other service providers. Spaink is said to have published on the internet texts of Scientology on which the Church's copyright would rest; according to Spaink, they were merely extracts. XS4ALL successfully argued that it only passed on the material, not published it.

To KPN 
The great surprise was when the Dutch telecom operator KPN took over XS4ALL twenty years ago. It soon became clear that XS4ALL would remain an independent company and would not be integrated with Planet Internet, which had just survived an integration battle at the beginning of 1997 with the videotex service Videotex Netherlands, the Internet service WorldAccess and the messaging service Memocom. However, after the sale to KPN, activism remained a feature of XS4ALL. For example, XS4ALL has conducted a trial with Ziggo against the collecting society BREIN for blocking access to the Pirate Bay download site.

Meanwhile, XS4ALL is one of the better but more expensive internet providers in the Netherlands and the service is used by KPN as a vehicle to sell multiple service packages with fibre optic, landline, television and mobile.

Illustrations are part of the Collection Jak Boumans.

BPN 1729: i-mode heads for history

The mobile information service i-mode will be ready for the history books next year. According to The Japan News, Japanese telecom company NTT DoCoMo announced that the production of  the customised mobile phones will stop, while the service itself will be phased out over 2017. At its peak in 2009 i-mode registered almost 49 million subscribers in Japan.

Technically i-mode was a web service for GSM telephones, using compact HTML protocol for surfing and e-mailing on customised mobile telephone devices with little memory. Interesting was the attention given to the part of content in this service. As the service needed specially edited pages, NTT DoCoMo parsed the content pages before releasing them for consultation. 

In Europe licenses were given to Dutch telecom operator KPN, the Greek operator cosmOTE and the British operator O₂.In 2004 these operators clocked 2 million subscribers. KPN used its license in Germany with E-Plus, in Belgium with Base and in the Netherlands. The KPN services were launched in 2002. The telecom company officially held a license for 10 years, but the Dutch service was terminated in 2007; at its peak in 2003, the Dutch service counted 1 million subscribers. The German, the Belgian and British services in 2009.

The service has been overtaken by technology. Although mobile Internet was possible from 1995 onwards, installation of the settings was technically complicated; besides usage was very expensive, especially from abroad. NTT Docomo launched a content service with a special telecom protocol, which also needed special mobile phones. The service was also called teletext for mobile telecom. KPN claimed in 2004 that had 560 i-mode services provided by 400 national and international content providers.

In Japan the service has run from 1999 and will be terminated in 2017. NTT DoCoMo still has 17 million subscribers, which represent 30 per cent of the operator’s subscriber base. The long run of i-mode in Japan and the short run in Europe can perhaps be explained by the characters used in the Japanese language. Also the elderly segment of the subscribers loved the mobile phones customised for the segment, the service and the e-mail facilities.

(To enlarge tick on the illustration) 

Will i-mode leave  any historical trace? The special phone is being phased out, but a copy will undoubtedly be saved by a telecom museum. The content services will also be missing towards  the end of next year, unless NTT DoCoMo will make a copy of the services (which is usually forgotten). However, the e-mail service is maintained. And the telecom company has safeguarded the e-mail symbols, emoji (絵 文字 in Japanese) by donating  the original set of e-mail symbols to the Modern Museum of Art. The set emoji was designed by Shigetaka Kurita, a designer in the i-mode development team. For the launch of i-mode he designed 176 emoji on the basis of the format of 12x12 pixels.

For more background see the following blogpostings on Buziaulane:
- http://buziaulane.blogspot.nl/2007/07/flash-european-phase-out-i-mode-starts.html 
- http://buziaulane.blogspot.nl/2008/03/bpn-1049-i-mode-slowly-closing-up-in.html

BPN 1634: Twenty years internet access for Dutch consumers

It is not clear who the first Dutch supplier of Internet access for consumers was. In 1992 there were only 239 companies users of the internet systems of service providers (ISPs) such as XS4ALL, NLnet, Knoware and IAE. For example, a company would pay for a subscription 100 guilders  (45.50 euros) to XS4ALL. The number of companies connected to the Internet was not large, because the internet online system was only known by small group of entrepreneurs, mostly university graduates. Entrepreneurs outside this group did not have any idea of ​​the Internet and were linked to other systems such as Videotex Netherlands, ASCII databases and email systems as Low Cost Linking.

The  ISPs were really yet interested in consumers. The ISPs did not have the marketing machines and helpdesks. If a consumer accidentally wandered by and wanted to have a subscription, h/she would get it, but without a manual. All that started to change in 1992.

XS4ALL arose from the organization Hack-Tic, a group of people that exchanged hackers tricks, tips and files with each other. The organization initially made use of the facilities of the University of Amsterdam. But the university stopped the group from using its computernetwork. So that was the time Hac-Tic started  the foundation XS4ALL.

From 1992 XS4ALL started to accept members of the Hobby Computer Club (HCC) besides companies. And early 1993 the management decided to accept consumers. So 20 years ago on May 1, 1993 XS4ALL started to offer consumers access to its servers for 30 Dutch guilders (roughly 13 euro) a month . XS4ALL was the first ISP who started to take consumers seriously. They management predicted that  50 subscribers would sign on the first day. By the evening of May 2nd, 1993 at 19.00h the ISP had registered 500 consumers. There was clearly a need for internet among consumers. The first wave of consumer subscribers might have been helped by an article about internet, which was published in the Dutch national morning daily De Volkskrant that day.

From May 1, 1993 the number of subscriptions to Internet for consumers increased steadily, but not by the hundreds. Until later in the year XS4ALL started to collaborate with the political and cultural centre De Balie in the project and the Digital City in Amsterdam. The project had been devised to promote the municipal elections in the spring of 1994. Apart from the local television, radio and print media, the Digital City would be part of the public debate. On Monday, January 17th 1994 the Digital City opened its doors. This project caught the fascination of  many of the  national media wonder and as a side effect  it generated a lot of publicity for internet. In 1994 alone this project generated eight television and radio fragments, starting with an interview with Frank de Grave and the mayor of the Digital City Marleen Stikker in the 8 o'clock news on January 15, 1994 according to the database of Sound and Vision. After six weeks the project had tallied up more than ten thousand registered users.

In 1996 the foundation created a company, which was sold to the incumbent telecom operator KPN in 1998. However XS4ALL remained independent as a subsidiary and now offers various internet access services such as ADSL, SDSL and fibre and via KPN information and entertainment packs.

1575 Dramatic slowdown in Dutch FTTH - my comment

Yesterday, I reproduced the press release by Telecompaper on the dramatic slowdown in Dutch FTTH. At first sight the figures are dramatic. Despite the roll-outs in 205 municiplaities of the almost 418 municipalities nationwide, the figures are down.  Causes:
- Adverse weather conditions (a lengthy frost period) hit the overall market.
- 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) by cable operators such as UPC and Ziggo.
- The absence of well-known brand names on FTTH (such as Tele2 and Online), and KPN's focus on shareholder remuneration forcing Reggefiber (in which KPN is a shareholder) to raise outside debt.

From my home situation I experience the dramatic slowdown in the Amsterdam metropolitan area. Last year I started a sibling blog on fibre to my home in Almere. Initially there was excitement with the activity of rolling out the cables. That was March 2010. By May this year, so more than a year later, the fiber was connected and two months later operational. Can you imagine: you put fibre in the ground and let it rest overthere for more than 16 months doing NOTHING. Of course the story is more complicated.

The fibre was resting in the ground for at least 13 months. During those months nothing happened and as far as I know fibre does not have to settle in the ground. If a bank would not pay rent for 13 months you would have brought your money already somewhere else. It is inconceivable why it took so long. The financing question of Reggefiber and KPN might have been at the root of this postponement.

Secondly, the fibre I am talking about has to enter an appartment building. In an appartment building with working people it is hard to coordinate to get the fibre connected. And as the organising company is only available in working hours, there is a problem. So that explains another month or two.

A third problem is the communication. As house owner you do not get a notice telling you that you are connected now and can have a look at the offerings. In the meantime you see only KPN canvassing the neigfhbourhood and some flyers of Tweak.

So you go to the page of Glashart, an coordinating organisation for the ISP's, type in you ZIP code at the site of Glashart and it says: Congratulations your address has a glass fibre connection; you can now enjoy all the advantages of the new connections and you have a selection out of eight ISP's. In your enthusiasm you start comparing all the offers and want to start ordering. But then something strange happens. So Glashart has told you that you have a glass fibre connection and that you can enjoy the advantages. But closer reading shows that your neighbourhood can not make use of all the offerings!

Time to make a phone call to the ISP you have selected after comparison of the offerings.As my house rule is to avoid any KPN subscriptions, I look for another ISP. BTW The KPN is lousiest offer of the eight ISP's. I get on the phone with one of the candidate ISP's, in my case Solcon. I tell my story: Glashart tells me I can get a glass fibre connection, but when I fill out my ZIP code on the Solcon site, I do not have a connection. The Solcon rep starts to explain.The glass fibre has been laid by Reggefiber. KPN has a majority share in this company. So KPN and its ISP's (Lijbrandt, Tweak) are allowed to canvas the eighbourhood  EXCLUSIVELY for half a year in order to recover its investment in Reggefiber!

Besides all the problems mentioned (frost and finacing problems) the slow uptake of glass fibre can be blamed on: no level playing field fo all the ISPs and the lousy offer of KPN. For th time being I will stay with UPC which has also a  glass fibre infrastructure with speeds up to 120Mb, but not to the home. So I have still to share the cable with my neighbours. When the close-up period for the ISP's in our neighbourhood is over, I will make another phone call. The earlier the level playing field is instituted the faster the subscriptions will come.

BPN 1575 

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

BPN 1441 Dutch pension funds in FttH

Three Dutch pension funds (ABP, PGGM and PvVervoer) have set up the Communications Infrastructure Fund (CIF) in which they have invested some €1 billion. The purpose of the fund is to develop, over the next ten years or so, a national fibre network through a range of mergers and acquisitions of existing networks as well as new builds and network expansion commitments. This network will be made available to all players including the incumbent KPN and the principal cableco UPC and Ziggo.

CIF also aims to invest in antennae to be used by mobile network operators for their mobile broadband offers based on HSPA+ and LTE technologies. The move is astute, given recent developments in both the fixed-line and mobile markets.

A report from the Task Force Next Generation Networks to the government in mid-2010 recommended that 90% of Dutch homes and businesses have access to NGN broadband services by 2020. The report covered proposals for rolling out faster networks, and assessed ways by which average download speeds could be increased to between 75Mb/s and 400Mb/s by 2020, compared to 5Mb/s to 14 Mb/s currently.

Mobile broadband will have a more substantial role to play in pushing high-end data services to rural areas: the April 2010 auction for licences in the 2.6GHz band saw four licences awarded to the joint venture between Ziggo and UPC, Ziggo 4 (set up in December 2009 to deploy and run telecom and broadcast networks). This will allow the cablecos, which together have near national geographic coverage, to complement their existing bundled services (based on fixed-line access) with mobile voice and broadband offers.

KPN’s HSPA network is currently being upgraded to provide up to 21.6Mb/s, while Vodafone in July 2010 doubled download speeds on its HSPA network to 28.8Mb/s in Amsterdam, Rotterdam, Utrecht and The Hague. Tele2 NL in the same month announced plans to trial LTE in Diemen and Amsterdam (Tele2 also received four licences in the 2.6GHz frequency auction). All of these players would be able to make use of CIFs fibre-based mobile antennae as backhaul.

A main consideration for CIF is to provide a healthy return on investment for its clients. Real estate and most stocks have proved very volatile since late 2008, and there remain few safe havens for investors. The final cost of the project may reach up to €10 billion.

For more info see: Budde Blog

BTW In June the fibre connection was brought to the cupbord of our Almere apartment. But there is still no live connection. All this FttH effort has been going on in our neighbourhood since 2009.

BPN 1441

BPN 1427 Dutch fiber connections doubled

No less than 1,2 million glass fiber connections will linked in The Netherlands by 2012. In the past year the connections already doubled, but the execution of future plans is delayed. In 20 years time every household will have a fiber connection. Those are the conclusions of Stratix Consulting in their annual inventory and analysis of glass fiber in The Netherlands.

On 1 April 2009 218.000 households were linked up to the glass fiber network. One year later there were 451.000 link ups, a raise of 108 per cent. The statistics indicate the availability of glass fiber to the house holds. It does not mean that all house holds have subscribed. In the Netherlands the glass fiber link is laid up to the meter cupboard, but only connected when an application for a subscription has been made. In 2009 there were 139.000 subscribers and in 2010 only 217.000; only a raise of 56 percent.

Differences show up geographically. The roll out of glass fiber networks takes place under the free market system and makes the networks primarily available in strong social-economic areas. Money of market parties is invested mainly outside the big cities and in municipalities with a strong social cohesion, growth municipalities and new communities.

Top of the list is the province Flevoland, where almost half of the households (50,7 per cent) have a glass fiber link in their meter cupboard. The province of Brabant where the first commercial glass fiber network was introduced, has the highest number of subscribers.

Despite the raise of glass fiber house holds, Stratix notice a delay in the fiber plans, especially in Amsterdam. There the explosive growth has slowed down to a more gradual execution. In Amsterdam 47.000 households have glass fiber to the door; 15.000 households have been linked to the meter cupboard. Only 8676 households have taken out a subscription for fast internet, telecom and television.

In Almere almost 80 pct of the households have been provided with glass fiber to the door. But sofar only 7500 households have taken out subscription. In Almere KPN has technical and administrative problems, delaying the subscription conversion.

Recently the Australian research bureau Budde Comm critisized the Dutch incumbent telco KPN for the slow implementation of glass fiber. In Almere almost 80 pct of the households have been provided with glass fiber to the door. But sofar only 7500 households have taken out subscription. In Almere KPN has technical and administrative problems, delaying the subscription conversion. And people start noticing it and getting less enthusiastic to take out a subscription. Last year, March 2009, fiber was laid in Almere’s neighbourhood Tussen de Vaarten. Only in June 2010 the glass fiber was in the meter cupboards of the people. So the hunt for subscriptions started, but not for the apartment buildings. The households still have to wait for the fiber to be operational, before a subscription can be entertained. With the glass fiber already in the ground for more than a year, the investment is not turned into subscriptions yet.

BPN 1427

BPN 1425 KPN responds to poor FTTH uptake

KPN is one of the few incumbents to pursue FttH, though the decision to go full-steam for FttH rather than the cheaper solution of upgrading its copper network (FttC with VDSL2 in the last mile) took some time. The company initially considered that VDSL could compete effectively with DOCSIS3.0, and its latest data release shows that it still believes that copper at least in the medium term is still sufficient for most customers.


Nevertheless, at the end of 2009 the company announced that FttH was indubitably the superior technology, and that it would invest some €1.3 billion to expand the number of FttH-connected homes, essentially concentrating on FttH instead of expanding FttC. Despite this appropriate emphasis on FttH, the company is still struggling to convince most customers to sign up.

This is partly due to poor marketing, but also – and ironically – due to the success of its VDSL roll-out. VDSL serves the last mile, and large-scale roll-outs began in earnest from January 2008. The VDSL network is capable of providing up to 30Mb/s, and delivers IPTV to 80% of households and HDTV to 70%. The company plans to expand the VDSL footprint to ‘outer suburbs’ (completing this job by the end of 2011) and so increase IPTV coverage to 88% of households, but otherwise there will be no further roll-out of FttC.

In poorly marketing FttH, KPN targeted what it refers to as ‘sub-optima’ customers in its roll-out areas, or a demographic less interested in services delivered or less able to afford them. The pricing for bundled packages was also set too high, which has dissuaded many consumers from switching from their existing DSL service (considered by many to be acceptable for their needs). In reality, only about 9% of customers capable of receiving FttH sign up for the service, though this is an improvement on the 2.7% sign-up of the first quarter of 2009.

To address these poor figures, KPN has set in train a number of measures to reduce its pricing and improve the way it targets and sells to customers. It aims to reach a 60% sign-up rate of activated homes and at least 250,000 customers by 2012. Prices for its FttH tiers (from this month) have fallen by €10 per month. Yet the difference between VDSL and FttH offers, if anything, is less pronounced than before. In the pre-July pricing structure there was a €5 difference between a 20Mb/s Premium VDSL offer and a 50Mb/s Silver FttH offer. There is still a €5 difference between these two in the new pricing structure, but VDSL has been ramped up to 40Mb/s. The inclusion with FttH of an additional TV receiver, HD recording capability and more IPTV channels may be enough to tempt some customers, but KPN’s experience thus far is that the majority of customers, if they are happy enough with their service, will not switch. To address this, the company aims to improve it fibre delivery mechanism, shortening delivery times and improving its ‘first time right’ ratio. The company at least needs to convince customers that switching from copper to fibre is seamless, that there are real benefits for households’ use of IP-delivered services, and that it will not cost them more.

http://www.budde.com.au/

BPN 1424

BPN 1411 KPN misses the broad picture by focussing on FTTC

Yesterday, The Dutch incumbent telco KPN published its mid term strategy on broadband in The Netherlands. The strategy is neither fish, meat nor good red herring and is most concerned with returns in the mid term. The Australian telecom consultancy Budde Comm criticised the strategy, saying KPN’s focus on FttC misses the broader picture.

The Netherlands remains one of the few countries in Europe to have significant FttH networks. Until 2009, the main characteristic of Dutch fibre rollouts was the dominant role played by housing corporations and municipal governments. This focus changed following KPN’s acquisition of a 41% stake in the fibre provider Reggefiber and the subsequent ramping-up of their efforts and investment through their joint venture Glashart. KPN’s large-scale fibre rollouts were also largely based on access arrangements with local councils and housing associations.


KPN was one of the few incumbents to pursue FttH through recognising that doing so was in its own interests, rather than as a result of regulatory or competitor pressure. Its three-stage strategy was to get ready for rollouts (during 2008), trial the technology in several main towns (during 2009), and then decide on a national rollout plan. It had been hoped that the company would adopt a predominantly FttH strategy, leaving VDSL/FttC for other less populated regions, but the opposite is the case.

Its decision to opt for the hybrid model on its national network, and restrict FttH rollouts to select cities, reveals the company’s paucity of ambition, and the fundamental absence of a more wide-ranging approach to the country’s telecom infrastructure, and so of the welfare of its digital future.

KPN currently has about the same number of households connected to FttH and FttC (460,000 against 450,000). The decision to opt for FttC could be construed as purely commercial: the company calculated that providing fibre to 80% of the population would cost some €8 billion, and if take-up of connected homes reached 50% then the government’s contribution would be about €100 million for ten years. Government funding would increase as a greater proportion of the population in rural areas was covered. Rolling out FttH could cost an average €1,000 per home passed, and to cover the whole of the Netherlands would require some 600,000 homes connected per year, amounting to €600 million per annum.

Yet KPN’s initial model has proved to be optimistic: FttH take-up has settled at around 25% - 30%, principally because the consumer price – at €60 per month – is too high for FttH to compete against existing offers from cablcos (Ziggo and UPC) and high-end DSL alternatives, and thus KPN/Reggefiber struggles to reach the economically viable level of 45% penetration. KPN’s FttH ARPU is only €8 per month higher than DSL ARPU, and much of this is derived from IPTV which the company cannot realistically offer on DSL.

Thus for the Netherlands most FttH activity will remain in select cities (currently including Amsterdam, Deventer, Almere, Eindhoven and areas of Rotterdam) and regions (particularly Noord-Holland, Flevoland, Gelderland and Overijssel).

The decision against a national FttH policy in favour of one which empowers cities to take a leadership role in bringing fibre to their denizens is not very conducive to a broader national approach.

Furthermore the decision shows that the country has not yet embraced the trans-sector concept, which requires a national approach for the delivery of national healthcare, education, e-government services etc. These sectors are closely tied to a national IP infrastructure: in December 2009, the OECD published a report showing that governments could justify the costs of national fibre networks by using them to cut costs in sectors such as healthcare, education, transport (telecommuting etc) and energy (through smart grid infrastructure). On average a cost saving of between 0.5% and 1.5% in each of these four sectors over a ten year period would justify the cost of building a national fibre network.

Unless the Dutch government establishes a national policy on these issues it is hard to see companies such as KPN being able to build business models for a national rollout.

Blog Posting Number: 1411

Tags: glass fibre, DSL

BPN 1355 FTMH - UPC lowers internet tariffs

Since Monday UPC in the Netherlands has lowered its internet tariffs drastically. Since it completed its Fiberpower (fibre to the corner) and offers speeds up to 120Mbps, UPC is technically ready to compete with KPN and other ISPs in the fibre networks. The only real difference is that UPC for the time being will compete with FttH networks, while UPC has fibre networks to the corner. The last mile will be a coax link. Another technical difference is that the FttH fibre networks connect subscribers one-to-one to the network, while UPC links a series of subscribers to the head station; with more subscribers on the line the speed will slow down.

Now UPC starts to compete in the market by lowering the tariffs. The new internet subscriptions have six flavours. The cheapest one with a download speed of 5Mbps and an upload speed of 0,5 Mbps will cost 18 euro. For the fastest speed of 120Mbps download speed and 10Mbps a subscriber will pay 70 euro. The other four intermediary speeds are:
- 25Mbps (down)/1,5Mbps (up): 25 euro;
- 30Mbps (down)/3Mbps (up): 30 euro;
- 60Mbps (down)/6Mbps: 40 euro;
- 90Mbps (down)/6Mbps: 50 euro.


UPC starts the marketing campaign by inviting subscribers to change throughout its area. Yesterday I received an offer to pay the same money for a triple play subscription, while the internet speed was raised from 10Mbps to 30Mbps. For 46 euro I would receive 30Mbps, digital TV with DVR with a standard package of radio and TV as well as an unlimited telephony package; mind you the comparable KPN offer would cost me 65 euro. The offer of UPC is good for two weeks.

It is a first shot in the competition to come. There are already areas with fibre coverage. But soon large areas like in Amsterdam, Rotterdam and Almere will be operational. In Almere for example no less than 75.000 homes will have been passed in the fibre network by the end of 2009. A majority of these households still have a subscription to UPC cable, because of the television distribution; only a minority have a triple play subscription. KPN so far is the only provider which can offer a triple play subscription on fibre. Other ISPs have indicated to follow, but have not published their offer and are not canvassing. But also KPN starts to mingle into the fight as it now has a 6 months offer of its silver package of 80 euro (50Mbps download; 5 Mbps upload; > 70 TV-channels; unlimited telephony; free installation) for the price of a bronze package of 65 euro (30Mbps download; 3 Mbps upload; > 50 TV-channels; unlimited telephony; free installation). But this is only a temporary offer with no sight on the price going up or staying the same as the offer.

The Netherlands will go into the holiday mode soon, roughly within two weeks. After the holiday in September the real fight will engage. I guess that the offers will get better by that time. So I will not even consider the UPC offer yet. But it is nice to see that the old cable monopolist is fighting against the incumbent telco. It means competition and lower prices.

Blog Posting Number: 1355

Tags: cable, fibre

BPN 1339 FTMH - The vote for fiber is yes

The meeting of the owners’ association was disappointing. There was no representative of AlmeerNet. In one or another way I had misinterpreted the point on the agenda. No representative to answer my four questions.

So the members of the owners’ association were asked to vote in favour of a motion, whereby AlmeerNet can link every apartment to the mainline. Voting for this motion was easy. It does not cost anyone a dime; besides the apartment is easier to sell with a link to glass fiber than without. The motion was passed with a large majority. Next step in the project will be the linking.

It brings closer the question, which company to choose. So far there were three parties involved: UPC, AlmeerNet and KPN.
UPC is the incumbent cable operator which has upgraded its cable network to fiber, but the optical cable ends in the headstations (Fiber to the Curb). The last mile consists of coax/copper cable. The UPC upgrade allows speeds of 25, 60 and 120Mbps with a Eurodocsis cable modem. For the 120Mbps connection UPC asks resp. 50,50, 60,50 and 80,50 euro a month, exclusive of telecom and radio and television..
AlmeerNet runs the open network. They do not deliver the services to the subscribers, but keep the network going technically. AlmeerNet is an initiatiive of the Almere Fiber Consortium, consisting of the municipality Almere, the housing corporations Goede Stede, Ymere, Alliance Flevoland and Reggefiber (51 pct majority by KPN).
KPN is a service provider to AlmeerNet. It will offer telephone, television and internet. Other services such as security will also be offered in the future. KPN offers three speed packages of 30, 50 and 60 Mbps download with 3,5 and 6 Mbps upload for the price of resp. 65, 80 and 110 euro, including free telecom traffic and resp. 50, 70 and 100 tv channels.

New is the announcement of Online as provider for AlmeerNet. Online is the latest platitudinous name for the former Orange broadband service; Online is part of the joint venture Orange and T-Mobile. So far Online has offered ADSL and cable services; now it has added fiber subscription. However the offer of Online is not known yet. Besides more service providers would be welcome, preferably with smaller TV channel offers (who can watch 100 channels a day; ridiculous).



Looking at the table there are two remarks. UPC makes an offer for fast internet, exclusive of a required basic TV package and optional telecom. KPN makes an offer for less fast internet, but inclusive of television and telecom. These are however the offers on internet. UPC and KPN have introduction offers. In Almere, UPC and KPN have now special offers. Both companies play with the television and telecom extras.

And there are more differences such as the speed. UPC offers 120Mbps, while KPN offers 60Mbps as maximum on AlmeerNet for our neighbourhood. This is strange, for I know for sure that a month ago KPN offered 100Mbps. There is still another difference in the speed. UPC offers internet from a headstation to more subscribers in the same area. AlmeerNet and her providers like KPN and Online offer a one-to-one connection to the subscriber. This means that the UPC speed will vary depending on the number of users, while the AlmeerNet speed will be stable.

Blog Posting Number: 1339

Tags: fiber, cable

BPN 1338 FTMH - Fiber in the ground; next step

During my stay abroad, the laying of fiber in the neighbourhood has continued. In the streets behind the apartment building where we are living, street by street was cabled, by opening up the pavements, laying the cable, branching it to the houses and filling the holes and reconstructing the pavements. But the cable has also been laid for the vintage boats in front of our apartment building, as most of them are used as house boats and people are living on them permanently; so with water, electricity and telephone, they now get fiber to the boat (FTTB). In the meantime also our apartment building has been passed. It is a kind of funny as they had to negotiate a corner with a head to end box of the cable operator UPC (see photograph). Now the circus of linking up to the homes and apartments starts as well as the signing up for subscriptions.

From our offices we can oversee the work in the street at backside of our apartment building. With military discipline, the fiber was laid, street by street.









Also the house boats will be provided with a fiber connection.









This is where fiber crosses the UPC headstation.








In our apartment building the linking up will start after tonight’s meeting of the owners’ association. In order to reach the highest floor, AlmeerNet needs the permission of the people living under the highest floor. As the linking up does not cost anything, it is likely that no one will object to the linking. But after that the battle for subscriptions between UPC and AlmeerNet will start. For the time being there will be a battle between UPC and KPN, as no other provider is yet available on AlmeerNet. The local press even speaks of a moratorium of one year for KPN, as they and Reggefiber, a joint venture with KPN, are financing the network.

Tonight the owners ‘association of our apartment building will meet for the annual meeting. A representative of AlmeerNet will be present. I am eager to hear how he answers questions like:
1. What is the difference between UPC net and AlmeerNet?
2. Is it true that KPN will have the sole right for one year to sign up subscriptions as there are no other providers, while in Amsterdam there are at least five providers.
3. What will be the costs of subscriptions as they have not been published officially and are different from town to town.
4. When will the AlmeerNet be available to new subscribers?
I think I can answer these questions now, but it will be interesting to see how the AlmeerNet representative handles the questions.

Blog Posting Number: 1338

Tag: fiber

BPN 1316 FTMH - Fiber To My (Almere) Home

Fiber is getting close to our apartment in Almere now, as you can see from the photograph. Work is being done on the ring of fiber cables around the city. Two weeks ago the orange fiber cable was visible in our neighbourhood. Presently company laying the fiber cable is preparing the main routes in the neighbourhood. One of the difficulties is the crossing of the canal in front of our apartment.

Elsewhere in the city I saw work being done, laying the fiber cable in the street and bringing the fiber behind every door. The company has learned from the Amsterdam experience where in first instance the fibre cable was laid up to the door; then the marketing campaign for the subscriptions was started and the fiber connected to the home, behind the door. As this method yielded few subscriptions, now every house and apartment is connected (if permission is given by the owner).

But it is not only the fiber cables that tell the arrival of glass fiber in the neighbourhood. A public relation offensive has also been started. A letter and paper has been delivered to every mailbox, proclaiming the benefits of fiber and the activities in the neighbourhood. During the meeting of apartment owners next month, a representative of AlmeerNet will come to speak and answer questions.

In the meantime the network organisation, known as AlmeerNet, has been active already in other parts of Almere Harbour and Almere City. By the end of the year 70.000 houses will have to be connected. Presently 275 people are employed in the project.

I will follow the project closely as decisions have to be made: do we choose for AlmeerNet or are we sticking to UPC. The speed will not really be the issue, but the offer of radio and television programs and perks as well as the financial subscription will. Besides AlmeerNet has one provider, the incumbent telco KPN, so far, while it is an open net; UPC is a closed net so far and has also one provider, UPC itself. Yet there is a politically unanswered question whether KPN has a monopoly for the first year.

In short: decisions, decisions. I will follow and write the whole process of the fiber cable laying, the PR to the potential customers, the offer and the political situation. The articles on this subject will be gathered in the blog FTMH – Fiber To My (Almere) Home.

Blog Posting Number: 1316

Tags: fiber, fibre

BPN 1302 Glassfiber in The Netherlands comes slowly (1)

Glassfiber has been proclaimed as the knowledge promoter in The Netherlands and should be implemented with the assistance of the government and municipalities. In the meantime a mosaic of projects can be seen on the map of The Netherlands. Yet the uptake is meagre in the main cities Amsterdam and Rotterdam.

Amsterdam
In the beginning of February the news broke that the municipality of Amsterdam had concluded an agreement with Reggefiber/KPN for 100.000 more glassfiber connections. It looks impressive, but is it?

After a long battle with UPC and the European Commission went ahead with the first phase of Glassfiber Net Amsterdam (GNA), in which the municipality of Amsterdam, the bank ING and KPN/Reggefiber and housing co operations partook. A first batch of 43.000 households would get access to glassfiber connections.

In the meantime glassfiber has laid to 43.000 households, of these only 8 to 9.000 households have glassfiber behind the front door. But only 3.000 households are active clients and have a subscription to the glassfiber and a package for telephone, television and internet. A representative for the network blamed the first strategy for the low uptake. The glassfiber was laid up to the front door and was only linked up when people took out a subscription. This strategy has now been changed. Glassfiber is now connected up to the front door and immediately packages are offered to the potential subscribers. Presently four providers offer packages: Concepts ICT, InterNLnet, Alice (BBned), Qfast and KPN.

Amsterdam started the discussion on glassfiber years ago and was advised to take the lead in laying a glassfiber network. The argument was that glassfiber was still too expensive for commercial parties and that the municipality had to be the leading party. Cable operator UPC disagreed with this discussion and fought the decision up to the European Commission. It did not see a level playing field for network operators. However the European Commission gave the municipality permission to take an equal share as the commercial partners in the glassfiber network project.

In the meantime the glassfiber scene has changed. The projects have become commercial projects as the costs have gone done dramatically. A connection to the household has come down to 800 euro. Did the project managers formerly put down the condition, that 40 percent of the household should participate, now in the new agreement of 100.000 connections Reggefiber/KPN does not request such a clause in the agreement. Now the glassfiber networks are offered with packages offering internet speeds of 60, 80 and 100 Mbps. In the meantime the cable operator UPC is offering speeds up to 120 Mbps over its own cable network.

Blog Posting Number: 1302

Tags: glassfiber