FTTH business cases

The people from Analysys Mason released in december a study about business cases for rural environments.

The study states that viability of NGN deployments depend on the existance of available ducting and also on the density of the area to give coverage.

The requirement of civil works makes the investment non-viable in most cases, specially for private network operators, while in case there is ducting available, the business case exists.

Another crucial factor is the ARPU per user. In Northern European countries, like in Norway, where top subscribers pay 200EUR per month, the investment is easily justified.

However, here in Spain, the target price for this kind of services is around 30EUR and this makes the business case tougher.

To overcome all the issues above, one of the options is the development of open access public-owned layer-2 network operators that deploy the access infrastructure (together with the active equipment) to service operators so they offer their services to the final customers.

With this model, the highest costs, which are civil work costs, will be assumed by the public-owned operator and thus the return period could be extended as profitability would not be the fist point to be analysed.

It is always the same concept, the public sector deploys the network (highways) and service operators offer their services (cars).

We do not think in FedEX deploying a private highway for their vans, right? Why we think this is the road to follow with FTTH?

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