Lessons from the Field: Rolling out FTTx
Panel discussion from Gigabit Access 2019
By Jaume Fornos
At Cartesian, I’ve worked a lot in fibre network expansion assisting both service providers and regulatory organizations, and so I was glad to put this experience to good use last month moderating a panel discussion on FTTx rollouts at Total Telecom’s Gigabit Access 2019 in Cologne.
Building a fibre network is a huge investment. In a previous post, I gave examples of the different strategies which operators in Europe and the US have used to roll out their networks and mitigate investment risk. There are different strategies which operators in Europe and the US have used to roll out their networks and mitigate investment risk. It’s also great to hear the stories directly from the people involved in carrying out these projects.
Image Source: Gigabit Access 2019
Joining the panel for “Innovative business models for FTTH and FTTx rollouts” were senior network, product and regulatory representatives of operators from Belgium, Cyprus and the UK: Nicolas Parmentier, Head of Copper and Network Transformation, Proximus (Belgium); Charis Themistou, Head of Access Network Design – Nicosia, Cyta (Cyprus); Clayton Nash, Head of Products, CityFibre (UK); and, David Cullen, Director – Regulation and Policy, ITS Technology Group (UK).
The diversity of this panel which consisted of two incumbents and two new entrants from three countries with distinct geographic, demographic and telecoms market characteristics, added to the richness of our 40-minute discussion and insights on fibre business models.
Here are some of the key lessons our panellists shared from their FTTx rollouts:
Gauging customer demand
CityFibre is a wholesale fibre network infrastructure provider and builder in the UK. For its City of York’s FTTP joint venture with service providers, Sky and TalkTalk, it learned that there is definite appetite for ultrafast, full-fibre broadband services in the UK; consumers love 1Gbps service when it is available to them.
For ITS Technology Group – a UK company that builds and operates full fibre networks in metro and rural areas – a key part of a successful business model is the anticipated level of involvement of the partner (e.g. local authority) in stimulating demand for the fibre services.
Making partnerships work
Other key criteria for a positive outcome for ITS Technology is whether the partner organisation has any assets or capital that they can bring to the partnership; the level of exclusivity (e.g. minimum contract lengths) used to be another key factor to protect against early risks to the business case but now being ‘first to a market’ with open access wholesale networks has demonstrated the sustainability required.
CityFibre’s ongoing FTTP partnership with Vodafone works smoothly because the roles are clearly defined. CityFibre focuses on deploying the network while Vodafone focuses on marketing, advertising and selling full-fibre broadband to end-consumers.
Proximus, as the incumbent operator in Belgium, established partnerships with local authorities in areas where standalone fibre deployment is not economical. In this case, both parties share the cost of deploying fibre up to the street cabinet.
Winning regulatory agreements
On the other hand, in Cyprus, Cyta – the incumbent operator – reached an agreement with the regulatory authority and the other service providers, by which Cyta would deploy FTTP, and the other service providers would seek access using Virtual Unbundling (VULA) at regulated costs.
Changing infrastructure and flexible technology
Cyta also agreed to withdraw the copper network and shift all customers to fibre (even those having only “plain old telephony service” or POTS) within three years after the first connection.
Similarly, Proximus is using its fibre rollout initiative to progressively phase out the copper network where possible in fibre zones. However, changing in-building cabling from copper to fibre can become a complex matter (e.g. seeking permission from the landlord). In these instances, Proximus is considering installing fibre to the building (FTTB) and a G.fast DSLAM, thus reusing the existing in-building copper to the customer premises.
In some rural areas, Proximus reduces deployment costs by installing microwave backhaul from the Exchange to the street cabinet, and VDSL vectoring from the cabinet to the premises.
Image Source: Gigabit Access 2019
Building or expanding a fibre network is nowadays a necessity for operators keen to deliver future-proof connectivity services, and does not come without its risks; however, as this small diverse group of operators clearly showed, there are numerous approaches and opportunities to roll out fibre networks successfully and with a viable business model.<>
> Cartesian’s eBook: Fiber Network Expansion Guide – Contains considerations and tools for network rollout projects