How much would FTTH cost to be deployed in Spain?

investment

Today, while having a chat with a friend of mine about the poor broadband services that we enjoy here in Spain and the lack of investment coming from the operators, we did an exercise to calculate how much it would cost to deploy FTTH everywhere. Big numbers.

Spain has a population of around 45 million people (you can check this at wikipedia) so the number of houses will be between 10 and 15 million. Let’s be negative and suppose that in Spain there are 15 million places to connect.

Roughly, deployment costs of 1000EUR per home can be good top price. Doing basic maths, with 15.000M EUR we would be able to offer FTTH services everywhere in Spain.

Obviously, deployment costs will be higher in rural areas but at the same time, many population live in condominium buildings and there, deployment costs will be below 1000EUR per connection.

Actually, I would say that 15.000M EUR is a very high price, taking into account that for massive FTTH deployments cost per subscriber can be easily below 600EUR. Also, using existing civil infrastructure from the incumbent, which by the way has been paid by all the Spaniards, means that this cost could decrease even more.

This means that with between 10.000M and 15.000M EUR all Spaniards could enjoy of FTTH.

I know that this post is a little bit demagogic, but I believe, that instead of spending 8.000M EURs in useless projects under the FEIL framework, the government could invest a little bit more and change the economic model of Spain…

For the readers outside Spain, the FEIL framework was developed to reduce unemployment in Spain by offering money to the municipalities to develop projects, mainly civil ones. In practice, what they did was to use this money to repair streets and build basic civil infrastructures… No IT.

This is very disappointing because if the government just spends money (increasing the government debt) to reduce unemployment just in the short term but without encouraging the development of new economic models, Spain will drop from the EU top countries list.

In broadband, we are already back in the list…

Advertisements

5 thoughts on “How much would FTTH cost to be deployed in Spain?

  1. Well… some official numbers:
    16,7M homes + 8,4M secondary residences, according to the Housing Ministry (http://www.mviv.es/es/xls/estadisticas/parque/EPV13.xls). So, slightly more expensive if you want fibre on the beach.
    The 1000€ maybe even quite understimated if the last 10% costs 10 times more…
    But the big question would be: who would you give that money to? Telcos or the Goverment? Is it allowed under EU rules? (that forbids government investing where there is a competitive market).

  2. Here I post a comment from Ramon Guixé written at the LinkedIn FTTH experience blog about the same topic:

    In Spain are approximately 23 millions residencies, ,what 16, are primaries, and 4, are second residence, plus 3, empty (to sale).
    Also, are approximately 3 million commercial and industrial premises.
    The average cost per connection, using the present infrastructure of incumbent operator, is between 800 to 1.100 €, with the actual technology of GPON, it depends of geography and present structure of network. For other operators could be the double.
    That’s why an approach to maximum cost to implement almost total NGN in Spain, taking out isolated points, second and empty residencies and considering 70 % of coverture, would be between 11 a 13 thousand million €.
    It represents job for 50.000 people during 3 years in an of the most productive work for a country, that would facilitate to reach a big step in achieve the first level of modernization all structures of industry and third sector.
    I believe that even a half part of this investment can not be done in the private sector, in the next ten years.

  3. I disagree with Ramón in that I know more than a company that given half the money to invest to cover half of the buildings would do it… Not so many that would do it with their cash flow or usign debt…

  4. Carlos, this kind of investment, in areas of medium a low population density( at list the 70 % of territory and 50 % of population), has an pay-back minimum of ten years, taking into account, the recent prices to broadband connections in Asia of 100 Mb/s around 40 € per month. I do not thing that private companies will are interested to invest in this conditions .

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s