Recent Fiber to the home markets showed a strong dynamism in 2012
Valérie CHAILLOU
Director of Studies, Telecoms Business Unit, IDATE
Inventory of FTTH/B in Europe
Europe (EU-35) reported a solid 15% increase in the number of FTTH/B subscribers during second half 2012. FTTH/B coverage continues to progress fast in Europe with a growth of 12% in the period. There were nearly 7.3 million FTTH/B subscribers in the EU-35 at mid-2012, and 33.8 million homes passed.
During 2012, several countries showed a real dynamism both in terms of coverage and take up rates. Turkey is leading the Top 5 dynamic countries in terms of percentage of new subscribers in the total FTTH/B subscribers' basis, along with Ukraine, Spain, Bulgaria and Russia. The positioning of Spain -only Western European country present in the list- should be noted as the country has entered the European ranking only a few months ago and is facing an important economic downturn. The success of FTTH/B is therefore reinforced in such a tricky context.
Elsewhere in Europe, pioneering Scandinavian countries, sometimes already considered as mature, are still leading the European market. In Denmark, FTTH/B market growth is now higher than the mobile market growth. In Finland, FTTH/B connections are more and more considered as a utility and therefore often included in the apartment monthly rental. In Sweden, new services are benefiting from a large FTTH/B coverage and an important take up rate: customers used to subscribe to a FTTH/B connection to be able to reach e-governance services provided by national entities and they are now turning to other services such as Video On Demand… finally, FTTH/B is a driver for video entertainment!
On the other hand, Italy, which was also a pioneer in FTTH/B rollouts, is beginning to lag behind. Some projects involving several players have been announced but none of them has entered into operation. The strategy unveiled by the incumbent doesn't put a strong accent on FTTH/B. The increase in terms of subscribers during 2012 is one of the lowest in Europe (10%), but the potential is still large (12.7% take up rate at end 2012, far from the EU35 average of 21.6%).
In terms of players involved in FTTH/B projects, there was no upheaval in 2012. Alternative carriers are still leading the way, representing half of the total homes passed in EU35 at end 2012 (nearly 71% considering EU39).
The number of local authorities launching FTTH/B rollout projects on their territory is increasing a little bit more rapidly than other kind of players but they still represent only some 11.6% of homes passed in EU35. However, we have noted some interesting projects in Europe held by those players, such as in the UK where rural cooperatives have succeeded in motivating citizens to be financially and/or "physically" involved in rollouts (e.g. the B4RN / Broadband For the Rural North project).
Then, of course, incumbents are main players in all European countries now; they represent 38.4% of HP in EU35 at end 2012. The quite recent involvement of Turk Telekom in Turkey has largely participated in the dynamism of the country which was clearly dominated by the competitor Turckell/Superonline until then. The competition between those telcos will probably enhance the take up rate which is still lower than the European average at end 2012 (18.7% vs 25.8%).
In the UK, the situation is totally different. The incumbent BT has decided to deploy FTTC on the national scale. FTTH (mostly referred as FTTP in the UK) will now only be deployed "on demand". BT has been really aggressive in the past year and has now reached the same level of coverage than its main competitor, the cableco VirginMedia (13 million homes passed with FTTC+VDSL). A part from local projects, we do not see a very bright future for FTTH/B in the country.
Number of FTTH/B subscribers per country in Europe
(countries with more than 200 K subscribers)
= 286px
Source: IDATE for FTTH Council Europe
Number of FTTH/B homes passed per country in Europe
(countries with more than a million homes passed)
Source: IDATE for FTTH Council Europe
A few months ago, we didn't note important changes in the leading countries. Russia and Ukraine are the main markets, both in terms of subscribers and homes passed. This is mostly due to the demographic context in those countries, as well as the rhythm for rollout. In Russia, several players are present on the national scale (Beeline, MTS, ERTelecom, Rostelecom), enhancing competition and driving tariffs down. Moreover, end users are migrating more rapidly because previous access solutions (copper networks) were not efficient enough.
Then Sweden is still a leading FTTH/B market. E-governance is a real success there and citizens are now very confident in their FTTH/B connections to now pay for new kind of services such as Video on Demand. Other TV services (linear TV) are most of the time included in the apartment monthly rental but customers are now ready to subscribe to new kind of services that they can reach whenever they want. In Sweden, the take up rate reaches 48.4% at end 2012, largely higher than European average.
Regarding the technology deployed, Ethernet is still players’ first choice across the EU-39, and represented 78% of all FTTH/B rollouts at end 2012.
As concerns network architecture, the gap between FTTH and FTTB has increased during last semester 2012 and now FTTB architecture represents 70% of rollouts at end 2012 (compared to 62% six months earlier). Players are favouring an FTTB configuration as it allows them to avoid the issues that come with installing fibre on private property, and especially MDUs – i.e. having to negotiate with each property owner.
Valerie CHAILLOU
Director of Studies, Telecoms Business Unit, IDATE
v.chaillou@idate.org
Next Gen Access deployment
Roland Montagne
Head of the Telecoms Business Unit at IDATE
Measuring costs for each EU-27 member state to reach the Digital Agenda in Europe
In May 2010, the European Commission adopted its Digital Agenda policy programme. It was one of the first flagship initiatives of the EU 2020 strategy. It sets ambitious targets to provide all European households with ubiquitous coverage of 30 Mbps as a minimum and half of them with a subscription of 100 Mbps by 2020. IDATE has published recently a report providing different possible cost scenarios – with a breakdown by technology and by population density (urban, peri-urban, rural).
Today, some voices are raising concerns that the goals of the Digital Agenda (DA) will not be reached in many Member States as the necessary expenditure is beyond reach, especially in the current European economic situation. This is why this report focuses in particular on the cost of the Digital Agenda in reaching the ambitious goal of coverage of 30 Mbps and 100 Mbps, and further tries to clarify, per country, what it will be. It puts forward a theoretical model with the distinction of various scenarios involving distinct technologies, namely fixed and wireless.
"In several European countries, the rollout of FTTH networks has started and the European Union disposes already of a 40% NGA net coverage amongst all its member states. Indeed, copper local loop will ultimately be replaced by fibre, it being the medium that can guarantee an almost infinite bandwidth capacity for the future. Nevertheless, good quality copper, especially in Western Europe, and the current economic situation, could lead some telcos to consider other alternative scenarios involving VDSL, LTE or even satellite in Ka band", says Roland Montagne, Director of the Telecom Business Unit at IDATE. He adds: "The adoption of a FTTH-oriented scenario by telcos will not only depend on the amount of capex necessary but also on a viable business model. On this, telcos should be innovative not only with the services they propose but also on their pricing approach (tiered pricing) and their strategy regarding smart access."
Deployment costs by scenario
- Four scenarios in different constellations have been modelled, including a full FTTH/B coverage scenario. Depending on the mix of technologies deployed, these scenarios will cost between 51 billion EUR and 229 billion EUR.
- These amounts, whilst certainly substantial, are within the expected range and therefore come as a confirmation of the ambitious nature of the broadband objectives of the DAE.
*50% uptake
NOTE: Scenario names are chosen to reflect main technological characteristics, but do not express a preference for any given
technology to reach the broadband objectives of the Digital Agenda.
90% FTTH/B = 90% FTTH/B only + 10% LTE
Base case = FTTH/B+FTTLA+VDSL2+LTE
Vectoring = FTTH/B+FTTLA+VDSL Vectoring+VDSL2+LTE)
Wireless = LTE+FTTH/B
NGA Costs model
In order to build our theoretical model of the costs of reaching the DA goals, IDATE started by drawing up several assumptions about ‘overlapping’ in each country with the aim of establishing the ‘net’ number of FTTx homes passed, and thus the effective level of NGA coverage. Consolidating this in the EU27 gives a net NGA coverage rate of 41% of European households in late-2011. Among the four fixed NGA architectures considered (FTTH/B, FTTLA+DOCSIS 3.0, FTTN+VDSL and FTTx/LAN), regarding our estimates at that time, FTTH/B accounted for 22%, FTTN+VDSL for 25% and FTTLA+DOCSIS3.0 for 50% of the European NGA coverage.
Using these coverage estimates as a baseline, IDATE modelled the investment required for each of the 27 Member States to reach the broadband objectives of the Commission's DA. We also took into account, nevertheless, for each Member State, the national broadband or ultra-fast broadband plans already launched, with their associated objectives of coverage up to 2020.
We then considered no duplication of infrastructure in our cost model. Indeed, the model's output shows the minimum cost of reaching the DA targets by rolling out one single network per coverage area1.
> For more information about what we do, visit us online at: www.idate.orgwww.idate.org
DigiWorld Summit 2012
"Game Changers: Mobile, Cloud, Big Data"
Opening day of the 34th Summit: The future of the digital economy according to its leaders
This morning IDATE Chairman François Barrault opened the 34th edition of the DigiWorld Summit in Montpellier. The Summit has become one of the must-attend events each year for playmakers in the telecom, Internet, television and video game industries. It will bring together more than 1,200 participants and 130 speakers from over 20 countries around the world.
IDATE and the members of the DigiWorld Institute are putting the spotlight on “Game Changers: Cloud, Mobile, Big Data” for this year’s Summit. The objective of the event is to discuss the factors that will lead to the emergence of the next decade’s digital leaders.
Executives from device and cloud heavyweights as well as content providers and telecom operators will present their views on these subjects over the next two days.
John Chambers, CEO of Cisco, affirms that the pace of innovation today is the fastest it has been in the past 25 years.
Hans Vestberg, CEO of Ericsson, stresses the need to combine a strategy of vertical integration and openness to “capture the innovation of other players.” For Ben Verwaayen, CEO of Alcatel-Lucent, Europe should speed up LTE rollouts despite the economic uncertainties. Qualcomm Chairman Paul Jacobs, riding high on the success of the firm’s technology, which is used in many smartphones and tablets, predicts a “sixth sense, in that everything will be connected around us.
In addition to such distinguished speakers, the DigiWorld Summit is also recognized for its detailed preparation of the themes and the series of sessions based on IDATE analysis. During the opening session the Institute’s experts will each present an overall analysis of their focus sectors. They will highlight the dominant role of three game-changing factors applicable to all the links in the value chain:
- Mobile’s irresistible momentum, with the battle of the OSs and then LTE, which is expected to be central to the new differentiation strategies to break out of the price wars.
- The Cloud, which for IDATE is not limited to externalized enterprise computing (“cloud computing”) but includes application distribution architectures (including for audiovisual content), shaking up traditional roles.
- Big Data, an asset that all players will be looking to capitalize on through real-time applications, aiming to enhance their services and offerings (devices, content, connectivity services, storage and application platforms, etc.).
Three important voices offer a counterpoint to IDATE’s analyses: Ben Verwaayen, the boss of Alcatel-Lucent, Léo Apotheker, former chief of SAP and HP, and Carsten Schloter, CEO of Swisscom. Overall the messages converge, with all three insisting on one point: Europe has a lot going for it. However, these pluses are particularly concentrated in the telecom industry, which is currently suffering multiple ills: the economic situation, its relative disintegration and the constraints of a world where traffic is exploding but applications tend to lean in favor of over-the-top (OTT) players.
The sessions on November 15 will be devoted to sketching a potential next-generation telco. Presenters include Terry Denson, Vice President of Global Strategy for Verizon, Stéphane Roussel, CEO of SFR, Jean-Ludovic Silicani, Chairman of ARCEP. The heads of Ericsson and Orange, Hans Vestberg and Stéphane Richard, will close the debate. Some big names in traditional content (the BBC) and new online platforms (like Netflix) will also be present. A conclusion will be given by players that hold promising futures in platforms with IBM, Amazon, BT and Cisco.
Also note that five executive seminars will be presented on November 14 and 15, on the following topics:
- Impacts on privacy, with the input of Google and CNIL.
- Key issues for next-generation networks: FTTx, LTE, etc.
- Expectations surrounding the rise of smart cities.
- Perspectives related to the concept of smart TV.
- New business models for video gaming.
> Follow live the plenary sessions: Live streaming DWS12 !!!
> More information about our program and our speakers on the website DigiWorld Summit 2012
Inventory of FTTH/B in Europe
Valérie CHAILLOU
Director of studies, DigiWorld by IDATE
More than sixteen percent increase in the number of subscribers for FTTH/B in Europe in first half 2012
Europe (EU-35)[1] reported a solid 16% increase in the number of FTTH/B subscribers during first half 2012. FTTH/B coverage continues to progress fast in Europe with a growth of 16% in the period. There were nearly 5.95 million FTTH/B subscribers in the EU-35 at mid-2012, and around 32 million homes passed.
Main European economies are now on tracks for FTTH/B: Turkey presents a 82% growth in terms of subscribers in first half 2012, and other countries, even considered as mature markets show very interesting growth rates (+31% in the Netherlands, +23% in Norway). Spain is progressing with 44% increase in the number of subscribers and then entering the FTTH Global Ranking[2]. Another country is entering this ranking at mid-2012: Luxembourg, where the government have very ambitious objectives that will probably be reached on time (80% of the households passed with 100 Mbps at end 2013, 100% at end 2015).
Among CIS countries, because of its specific demographic features, Russia leads the way in terms of FTTH/B subscribers and homes passed – and the potential of the Russian market is huge, with 5.2 million FTTH/B subscribers and 15.8 million homes passed at mid-2012. Ukraine is also home of more than a million FTTH/B subscribers (+85% increase during first semester 2012), and we expect to see new players becoming involved in FTTH/B deployments in the near future.
As in previous years, IDATE has been commissioned by the FTTH Council Europe to provide an overview of the status of FTTH/B rollouts across Europe at mid-2012. To date, IDATE has identified around 260 FTTH/B projects in the EU-35.
The first type of player to become involved in FTTH/B deployments was alternative carriers which singlehandedly account for 51% of FTTH/B homes passed in Europe. Alternative carriers have performed rollouts in France, Italy, Germany, Sweden and in Eastern Europe (Slovakia, Slovenia, Romania, and Bulgaria).
We include cable companies in this category as they are often involved in large-scale FTTB network rollouts – with examples that include Numericable in France. Cablecos have the advantage of not having to negotiate building-by-building to access homes since the coaxial outlet is already installed plus, in a great many instances, the civil engineering to pull the fibre to the foot of the building has already been performed.
Another category of stakeholder is local authorities and regional power companies (which are often owned by public authorities). While this category represents only 11% of homes passed for fibre at mid-2012, it accounts for the largest number of FTTH/B projects, most of which are small scale ones – covering only a local territory. Their involvement will probably increase in other countries such as Italy and France.
The other category of player worth mentioning is incumbent carriers which account for 37% of FTTH/B homes passed in Europe. Virtually all of Europe’s incumbent carriers are either now involved in FTTH/B rollouts, are gearing up to it or are in the planning stages. The increase in the part of incumbents in the number of homes passed is partly due to the involvement of Spanish Telefonica. Even those who originally opted for an FTTN+VDSL solution, such as KPN, Swisscom and Deutsche Telecom, are turning their attention to FTTH – in many cases as a result of the growing competitive pressure created by cable companies’ and local authorities’ fibre initiatives.
In the UK, BT has changed its FTTH strategy several times. After having announced in 2011 a very ambitious objective in terms of FTTH coverage (2.5 million HP at end 2012), it finally turned back afterwards and decided to expand FTTN to FTTH only "on demand". This solution will be available in Spring 2013, after a two-phases pilot.
There has been a noticeable change in the list of leading countries during first half 2012: France is now ahead from Sweden. Indeed, excluding Russia and Ukraine, which lead the FTTH/B market in terms of subscribers and homes/buildings passed thanks to their demographic make-up (respectively 5.2 and 1 million FTTH/B subscribers), France now counts more than 764,000 FTTH/B subscribers (+15% between December 2011 and June 2012) when Sweden stand at 688,000 subscribers (+6% in the same period). The Swedish market is beginning to show signs of large maturity and the potential for further growth is less and less important from one semester to another in the country.
However, Scandinavian countries, and notably Sweden and Norway, still lead the way in Europe in terms of penetration rate – with 40.3% and 67.1%, respectively. Nevertheless it is now in Eastern Europe where we found also high penetration rates: Czech Republic with 45.3%, Hungary with 37.4%, Russia with 33.3% and Lithuania with 29.5%.But the situation across Europe as a whole is still quite disparate as countries like Italy or France are still reporting low penetration rates (12.7% and 12.2%, respectively, lower than the EU-35 average which reaches 18.6%).
Regarding the technology deployed, Ethernet is still players’ first choice across the EU-39, and represented 78% of all FTTH/B rollouts at mid-2012.
As concerns network architecture, FTTB still accounted for 62% of rollouts at mid-2012. Players are favouring an FTTB configuration as it allows them to avoid the issues that come with installing fibre on private property, and especially MDUs – i.e. having to negotiate with each property owner.
Valerie CHAILLOU
Director of Studies, Telecoms Business Unit, IDATE
v.chaillou@idate.org
> Visit our website for more information about our FTTx Watch Service.
[1] The term EU-35 refers to the EU-27 countries –Cyprus + Andorra, Croatia, Iceland, Israel, Macedonia, Norway, Serbia, Switzerland and Turkey.
The EU-39 refers to the EU-35 + the four CIS Countries: Belarus, Kazakhstan, Ukraine and Russia.
[2] The FTTH Global Ranking is based on the FTTH Council's definition of FTTH/B. It includes both Fiber to the Home (FTTH), and Fiber to the Building (FTTB). The Ranking covers all countries with at least 200,000 households where the penetration of FTTH/B has reached 1% of the total number of homes.
DigiWorld Summit 2012
Christine BARRE
Responsable DigiWorld Summit, DigiWorld by IDATE
A l’approche du DigiWorld Summit 2012, l’IDATE livre son analyse de la situation de l'économie numérique européenne
A l’occasion d’une conférence de presse organisée à Paris ce jour, le DigiWorld Institute by IDATE a livré son analyse de l’avenir de l’Europe des Télécoms et de la Télévision.
Quelques mois après la publication du DigiWorld Yearbook et quelques semaines avant le DigiWorld Summit, le DigiWorld Institute by IDATE, Institut spécialisé dans le domaine des télécommunications, médias et Internet, livre son analyse de la situation de l'économie numérique européenne à travers la situation exemplaire des secteurs des télécommunications et de l'audiovisuel. Cette conférence a également été l’occasion de présenter le programme du prochain DigiWorld Summit. Alors que la dernière édition du DigiWorld Yearbook avait été l'occasion d'attirer l'attention sur l'accentuation des faiblesses de la zone, le DigiWorld Institute by IDATE revient sur les grands enjeux auxquels l'Europe de la télévision et des télécommunications doit faire face.
Télécoms et Télévision européenne : Le point de basculement ?
Côté Télécoms, Yves Gassot, Directeur Général de l’IDATE, affirme : « Après avoir globalement réussi l'introduction d'une concurrence effective favorable au consommateur et dans une certaine mesure à l'innovation, l'Europe doit prendre en compte la situation inquiétante du secteur ».
Cela se traduit notamment par :
- une récession qui s'accompagne d'une pression sur les marges et l'investissement, à un moment où il faut accélérer les déploiements des réseaux fixes et mobiles à très haut débit et supporter l'explosion des trafics,
- un contexte peu favorable pour définir de nouveaux business models, lesquels sont pourtant indispensables pour répondre aux challenges lancés par des géants de l'Internet,
- une difficulté pour progresser vers un "single European market" tandis que s'accélère la consolidation aux Etats-Unis et que s'affirment des opérateurs de taille mondiale à partir des économies émergentes.
Côté audiovisuel, pour Gilles Fontaine, Directeur Général adjoint de l’IDATE, « ce serait une erreur de sous-estimer les points forts de l'industrie européenne ». En effet, la part de marché des chaînes de télévision et des distributeurs reste élevée alors que la production cinématographique est, dans une certaine mesure, le garant, d'une création autonome originale. Cependant, compte-tenu du poids des studios hollywoodiens, il serait illusoire de vouloir construire ex-nihilo un ou des champion(s) européen(s) des nouveaux services vidéo. La dissociation des droits « à la demande et linéaires » favorisera en effet les services nord-américains. Ce sont les raisons pour lesquelles il apparaît indispensable de favoriser une gestion des fenêtres, intégrée au sein des groupes de télévision dans un contexte où la SVOD est l’outil d’entrée des chaînes en clair sur le marché du péage.
Si les marchés de la télévision vont encore rester nationaux, une certaine internationalisation est cependant possible, voire indispensable. Pour cela, il faudra réviser le rôle respectif des chaînes et des producteurs dans la production de télévision (et non de cinéma). Par exemple, il faudrait également étudier la possibilité de lancer une chaîne jeunesse publique européenne disposant d'une base commune aux différents services publics européens.
DigiWorld Summit 2012 : Quelle place pour l'Europe au moment où l'émergence d'un nouvel ordre économique numérique mondial se met en place ?
Durant cette conférence, François Barrault, Président de l'IDATE, a présenté le programme du prochain DigiWorld Summit 2012. Ce sommet abordera le contexte mondial d'évolution des différents maillons de la chaîne du numérique avec des sessions plénières de haut niveau traitant des Smart Devices, des industries du contenu, des telcos et des plates-formes, des villes numériques,…
Le DigiWorld Summit est un rendez-vous incontournable qui permet de prendre la mesure des enjeux économiques et stratégiques pour les acteurs du secteur. Seront abordés des thèmes clés à travers une série de séminaires portant sur :
- Les Villes numériques
- Les contenus dans le Cloud
- Les réseaux de nouvelle grenaison (fixe et mobile)
- Big Data et protection des données personnelles
Le DigiWorld Summit est également l’occasion de mettre en avant le potentiel exceptionnel du territoire au cœur duquel cette conférence se tient depuis sa création :
- Les jeux vidéo seront à l’honneur durant une journée complète de conférences et de rencontres professionnelles organisées en partenariat avec le Montpellier in Game, événement que Montpellier Agglomération propose pour la troisième année consécutive.
- Les entreprises et start-up innovantes seront mises à avant à l’initiative de La Région Languedoc-Roussillon qui organise des rencontres B2B au travers du Networking by Sud de France Développement
Le DigiWorld Summit en bref
- Plus de 1400 participants attendus
- Plus de 130 intervenants
- Les présentations des analyses des consultants de l’IDATE
- Plus de 20 nationalités représentées
- Des sessions plénières de très haut niveau et 5 séminaires et conférences spécialisés
- Une sélection d'une trentaine d'exposants proposant des démonstrations et présentant leurs innovations
De très nombreuses occasions de networking durant une soirée d’ouverture à l'Opéra Comédie et une soirée de gala exceptionnelle sur le site d'IBM
> Découvrez le nouveau site internet du DigiWorld Summit 2012
Edito by Yves Gassot
Yves Gassot
CEO, IDATE
6th Trans-Atlantic Telecom Dialog
The sixth annual Trans-Atlantic Telecom Dialog was held in New York City as part of CITI’s State of Telecom 2012 conference (see the CITI's website). The theme of this year’s edition of the gathering proposed by the IDATE DigiWorld Institute was “Facing the Over-The-Top.” Crossing the pond to participate alongside IDATE included representatives of Alcatel-Lucent, Deutsche Telekom, Orange, Swisscom and Telecom Italia. But it was the number of luminaries among us that made the event a stand-out.
What are the takeaways?
First, a clear contrast between the situations of operators on the two sides of the Atlantic. Though they are all dealing with the paradigm shift to "IP everywhere" and the migration of applications to OTT, Verizon Wireless’s and AT&T’s indicators (revenues, ARPU) are trending in the opposite direction from their European counterparts’. This momentum is riding on the smartphone boom as well as the massive success of mobile broadband (first HSPA+ and now LTE[1]) among consumers, resulting in a steady increase in data ARPU[2].
The US carriers’ lead can also be attributed to their more advanced form of tiered pricing[3], structured mainly around data use and adapted to multiple devices (PCs, tablets, dongles, etc.). Of course, Verizon Wireless and AT&T are number one and two players[4] in a country whose consumers generally have the choice between four or five operators, but they seem to operate largely in a separate market from the other national (Sprint and T-Mobile) and regional (Leap, MetroPCS) competitors.
However, just as in Europe, the fixed portion of AT&T’s and Verizon’s activities shows continued loss of lines and erosion of revenue. And in the sections of their territories where they have deployed fiber networks (FTTH for Verizon and FTTN/VDSL for AT&T), the Bernstein analyst considers there has been no real return on investment. The main cause of this in the United States is cable, which is far and away the dominant player in broadband[5] and which can increase its consumer access speeds at a minimal cost. As a result, the Bernstein analyst like many other experts foresees more consolidation in the wireless market[6], and perhaps between major cable operators and telcos. The deal between Verizon and several leading cable companies—recently accepted by the FCC, with conditions—trading spectrum for a commitment from the telco to market cable subscriptions, is seen as the first anticipation of this next step.
With the difficulty operators are having counting on a return on their investment in NGN rollouts, we know that the Europeans are inclined to try to pool infrastructure resources, perhaps even opting for a separation regime. This topic was discussed by European speakers but not by the Americans, although plans for wholesale operators are frequently mentioned in the US mobile industry.
Expanding the scope of this transatlantic encounter, two Australians (including the minister) presented the features of the system their country had chosen: a government-led national plan for a super-fast broadband network worth nearly 35 billion USD, and the purchase of traditional operator Telstra and its infrastructure. It is hard to imagine a similar approach in the US. And while the European markets may be tempted, the macroeconomic conditions make this an unlikely option for the time being.
But the most memorable part of this Trans-Atlantic Dialog was none of these. It was the discussion of the next ITU world conference (WCIT-12) in Dubai in December. The NTIA administrator (who is also assistant secretary at the commerce department) and George W. Bush’s former ambassador to ITU sounded the charge against any attempt to change the International Telecommunication Regulations in such a way as to give ITU even a small amount of power over the Internet. Naturally this effort is targeted at countries such as Russia and China, which might seek refuge behind ambiguous security considerations. But it also applies quite explicitly to the position of the European association of traditional operators, ETNO, which decided to propose an amendment to the regulations to take into account some operators’ desire to make the "sender party" pay for certain Internet interconnections.
The Deutsche Telekom representative, ETNO’s spokesperson on this matter, did his best to relativize the impact of the proposed modification, and the ITU secretary-general, also present, reminded the guests that every idea must be discussed, and that at any rate he would seek a consensus among the members, but you get the sense that the pressure will remain over the coming weeks. Naturally, the representatives of Google/Motorola and Netflix advocated for the continuation of direct negotiations between content suppliers (or their transit operators) and telecom operators, without the intervention of governments or any kind of intergovernmental body. And AT&T and Verizon do not look like they want to align their position with their European colleagues of ETNO, although they also have reasons to lock horns with the Internet titans.
Join us as we further explore the challenges of “Telcos Facing OTT” at our next DigiWorld Summit, "Game Changers" on November 14 & 15. Visit www.digiworldsummit.com to register!
[1] The United States has become the unchallenged leader in LTE with first Verizon (+10 million subscribers in Q2), then AT&T, Sprint and MetroPCS.
[2] Bear in mind the difference in rates: while Vodafone was offering plans at just over 8 USD for 500 MB at the end of 2011, AT&T was offering a 200 MB plan for 15 USD.
[3] Though it is worth noting Swisscom’s innovative approach to reforming its mobile rates based on speed.
[4] With 33% and 31% of US subscribers respectively, for many years. It is especially interesting to note the relative partitioning of the markets between the two leaders (together), who can raise their rates, and the rest, in particular the second-tier (prepaid-focused) operators such as Leap and MetroPCS, who are lowering them.
[5] Cable’s share in winning new broadband subscribers leapt from 50% to more than 80% in just five years.
[6] AT&T’s failed attempt to acquire T-Mobile generated recurring rumors of combinations between Sprint or T-Mobile and second-tier mobile players such as Leap or MetroPCS. As we write these lines, we have just learned that T-Mobile and MetroPCS plan to merge.
World FTTx market value
Valérie CHAILLOU
Director of studies, DigiWorld by IDATE
FTTx generates a higher ARPU than traditional broadband
On the occasion of the upcoming Broadband World Forum in Amsterdam on 16-18 October and the official announcement of the European FTTH panorama during the FTTH Council Europe conference this Monday in Brussels, IDATE presents some of its latest results on the Fixed Ultrafast-Broadband (UFB) market.
UFB increasing its share of the broadband market everywhere
Ultra-fast broadband rollouts will no doubt accelerate from 2011 to 2016. Several national programmes (in Australia, New Zealand, Singapore, France, the United States…) have very specific UFB coverage targets, even though standard broadband is still very prevalent in most regions. In a great many countries, broadband systems cover only a fraction of the population and bringing access to the rest of the country is a top priority for a number of governments. Despite this ultrafast access is expected to increase its share of the total broadband market significantly, in all three of the major regions – the EU-27, North America and APAC – and this in terms of both revenue and customer numbers.
EU-27
At the end of 2011, 9% of broadband subscribers in the EU-27 were connected via UFB access, and so represented 17% of the broadband market value. This split will stand at 34% and 61%, respectively, at the end of 2016.
North America
At the end of 2011, 26% of broadband subscribers in North America were connected via UFB access, and so represented 43% of the broadband market value. This split will stand at 47% and 68%, respectively, at the end of 2016
Asia-Pacific
At the end of 2011, 23% of broadband subscribers in the Asia-Pacific region were connected via UFB access, and so represented 71% of the broadband market value. This split will stand at 32% and 80%, respectively, at the end of 2016.
In each of the major regions, ultra-fast broadband accounted for a greater share of broadband market revenue than ultra-fast customers did of the total broadband subscriber base. This means that the ARPU generated by ultra-fast broadband access products is higher than the ARPU generated by other broadband technologies.
In all three regions, the rate at which UFB customers increase their share of the total broadband customer base will be greater than the rate at which UFB revenue increases its share of the broadband market as a whole. This means a relative decrease in ultra-fast broadband access revenue from 2011 to 2016. Ultra-fast broadband ARPU will tend to come in line with average broadband revenue. This average per-user revenue, which includes both broadband and superfast broadband access products, is expected to increase slightly as the number of UFB customers grows. This will be true, to varying degrees, in all three regions.
This trend will likely grow over time as the broadband market is gradually taken over by ultra-fast broadband technologies, which will continue to be deployed on a large scale to achieve maximum coverage. Meanwhile, the ultra-fast broadband market will start to enjoy steadier growth once new services are available only on FTTx systems. Of all the UFB sales models, it is premium and even enhanced offers that appear to generate the highest ARPU for superfast access providers.
Extract of IDATE's in-depth study "FTTx services – Supply-side strategies: monetizing the networks", publication date September 2012
FTTx services – supply-side strategies: monetizing the networks
Valérie Chaillou
Director of study, DigiWorld by IDATE
The UFB market revenues will grow by 150% over the next five years
IDATE has published recently the in-depth study "FTTx services – supply-side strategies: monetizing the networks". This report provides readers with estimates of the ultra-fast broadband (UFB) market’s value – both regionally and for seven key countries. It draws on an in-depth examination of operators’ supply-side strategies and our ongoing FTTx market watch. The report also delivers growth forecasts up to 2016 based on how operators’ positioning is likely to evolve. Our estimates indicate that the global UFB market will grow by more than 150% between 2011 and 2016.
The revenue generated by the ultra-fast broadband (UFB*) market will be shaped by both the expected increase in customer numbers and in these customers’ average revenue per user (ARPU), which is itself very closely bound up with UFB providers’ supply-side strategies.
- We have distinguished four categories of ultra-fast broadband offering: premium, enhanced, traditional and niche. An ISP may attach one or several objectives to its product line strategy. These can include increasing ARPU, limiting customer loss (churn), maintaining its competitive edge, reacting to increased competition in the broadband market, etc.
- Sketching out two extreme scenarios allows us to assess the development trends for UFB ARPU, based in particular on how operators are positioning themselves with respect to increasingly powerful content providers who themselves want to see the spread of new generation superfast networks. So operators are either a) refocusing their energies on their network business and offering value-added services (VAS) tied to system management (data storage, security, authentication, etc.) – under a scenario we call "FTTx as smart pipe" – or b) becoming involved in the direct supply of services and applications such as TV and video to end users, with an approach built around "tiering and premium services".
- Based on the current status of each of the markets being examined in this report – i.e. the United States, Japan, Germany, Spain, France, Italy, Sweden and the UK – and how the players’ positioning is likely to shift with respect to the two scenarios listed above, IDATE has established an estimate for ultra-fast broadband ARPU at the end of 2011 and at the end of 2016.
We estimate the UFB market revenues to grow by 150% over the next five years.
UFB market growth and regional split from 2011 to 2016
(service revenues)
The predominance of North America and the Asia-Pacific, or APAC, region – representing a combined 82% share of the UFB market in 2011 – is expected to diminish between now and 2016, as the EU-27 and the other regions of the world increase their market share from 18% to 35% over the next five years.
Ultra-fast broadband’s share of the broadband market is also expected to increase in all three of the major regions - between 2011 and 2016 threefold in the EU-27, significantly in North America and also in APAC.
Valérie Chaillou
Director of study, DigiWorld by IDATE
v.chaillou@idate.org
> More information about this study available on our website
* Ultra-fast broadband (UFB) includes FTTH/B, FTTN+VDSL and FTTLA+DOCSIS 3.0 systems
The Worldwide Ultrafast-Broadband Market
Roland Montagne
Head of the Telecoms Business Unit at IDATE
FTTH vs LTE: 230 million compared to 900 million subscribers worldwide by 2016
Although there were only 9 million LTE subscribers worldwide in late 2011 compared to 220 million FTTx subscribers (88 million for FTTH/B and VDSL alone), momentum is rapidly growing in favour of mobile. In 2016, IDATE predicts that the number of LTE subscribers will exceed 900 million, compared to nearly 230 million for fixed ultrafast-broadband (FTTH/B and VDSL).
During the Ultrafast- Broadband Conference, co-organised each year by IDATE and the Aromates agency, IDATE teams will present perspectives on ultrafast-broadband (UFB) expansion. These forecasts are based on our team's worldwide continuous monitoring of investments being made by operators, country by country, project by project, and the current number of subscribers by technology. The debate can therefore be based on objective data, on this day of exchange between all parties developing these key technologies aimed at growth in new digital uses.
LTE, acceleration
Although there were only 142,000 LTE subscribers worldwide in 2010, by late 2011 that number had already increased to 9.3 million. "We expect that a significant share of LTE devices will support FDD and TDD by the end of 2013," stated Frédéric Pujol, Director of IDATE's "Mobile Network" Practice. Growth will also be stimulated by TD-LTE deployments in India, China and several other countries in Asia-Pacific, Latin America and the Middle East, as well as in Europe, though to a lesser extent.
Overall, there is definitely an acceleration in deployments that we are following, which will result in a higher than expected number of LTE subscribers, as we now expect to reach the goal of 900 million subscribers by 2016.
For Europe, the situation is different:
- Take-off is taking longer than expected in Western Europe due to the late arrival of LTE smartphones and tablets using European frequencies. According to our forecast, Europe should have 150 million LTE subscribers by 2016.
- Smartphones for 800 MHz and 2.6 GHz frequencies have been available since March 2012 in Germany and Sweden. Sweden already had nearly 100,000 LTE subscribers by late 2011. The anticipated arrival of smartphones in early 2012 should certainly drive growth in LTE subscribers in Germany.
- For Spain, France, Italy and the United Kingdom, it has been confirmed that the first deployments will take place by the end of this year for commercial release in 2013.
FTTx, still very different growth
The global market for FTTx access continued to grow in 2011. There were more than 220 million FTTx subscribers worldwide by the end of the year (with nearly 56% using FTTx/LAN architecture in China) with sustained FTTx growth of more than 25% in the second half of 2011.
Roland Montagne, Director of IDATE's "Telecom" Business Unit underscored the fact that "FTTH/B architecture remains by far the most common in Europe but not in North America (6.2 million VDSL subscribers but nearly 78 million households covered by cable FTTLA + Docsis 3.0) or Asia/Pacific (124.5 million FTTx+LAN subscribers in China). In late 2011, there were 77 million FTTH/B subscribers worldwide compared to a total of about 250 million homes passed by FTTH/B."
Changes in the UFB market over the course of 2011 was marked by divergent trends demonstrated by the number of FTTx subscribers compared to the number of homes passed by FTTx. Priority remains with ultrafast broadband coverage, to meet a potential significant change in demand. This worldwide trend, however, varies from country to country.
Japan remains the world leader in terms of FTTH/B subscribers, followed closely by China. But in terms of growth, these two countries are experiencing distinctly different situations. China appears to be much more active, with a growth rate of 44% compared to 6% for Japan between June 2011 and December 2011. And this trend will only get stronger because, in the preceding half, the respective growth rates were 14% and 5%. This trend could soon result in China and Japan reversing positions in the worldwide ranking of countries with the most FTTH/B subscribers.
Even though the majority of countries in this ranking come from Asia/Pacific, the United States remains in fourth place, with nearly 8 million FTTH/B subscribers. For FTTH/B, a few European countries are holding their own alongside Russia, the leader in this region with 4.5 million FTTH/B subscribers in late 2011.
France is climbing in the rankings and is now higher than Sweden, a leading country but now having difficulty convincing the remaining households to convert to FTTH. Nevertheless, France remains a country where UFB commercial policy is still relatively unconvincing.
Roland Montagne
Head of the Telecoms Business Unit at IDATE
r.montagne@idate.org
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Déploiement des réseaux Très Haut Débit par les collectivités
Pierre-Michel ATTALI
Responsable du Pôle Réseaux et collectivités, IDATE
Des projets représentant 6 millions de prises FTTH et 4,5 milliard € d'investissement à fin 2017
A l'occasion des Assises du Très Haut Débit co-organisé chaque année par l'IDATE et l'agence Aromates, les équipes de l'IDATE font le point sur les projets en cours et les perspectives concernant les réseaux Très Haut Débit (THD) mis en œuvre par les collectivités locales. Ces prévisions reposent sur un suivi permanent que nos équipes réalisent au niveau national sur l'action publique en matière de technologies de l'information et de la communication et sur les missions de conseil que nous réalisons pour les collectivités dans le domaine de l'aménagement numérique des territoires.
Le débat de cette journée d'échange entre toutes les parties prenantes pour le développement du THD sur les territoires permettra d'identifier les attentes des acteurs publics et les facteurs susceptibles d'accélérer les déploiements des réseaux optiques sur les territoires.
2012, la prise de conscience par les collectivités des enjeux liés au THD
En 2012, les collectivités ont une pleine conscience des enjeux liés au THD pour leurs territoires. Elles ont compris que les réseaux en fibre optique, de par leur impact sur des pans entiers de la société, dans les domaines par exemple de l'éducation, de la santé, ou encore du logement constituent une infrastructure essentielle pour le 21ème siècle, au même titre que les infrastructures mises en œuvre au 20ème siècle dans les domaines de l'eau ou encore de l'électricité.
A ce titre, le développement des réseaux THD répond très clairement à des problématiques classiques d'aménagement des territoires, qui sont de la compétence directe des acteurs publics, et notamment des collectivités locales, qui ne peuvent donc en être exclues.
Mais au-delà de la problématique d'aménagement des territoires, le déploiement des réseaux à très haut débit est perçu comme une véritable source de croissance pour l'ensemble de l'économie ainsi que de création d'emplois, pour l'essentiel non délocalisables, dans un contexte national et européen de crise économique où l'on recherche précisément des moyens de créer de la croissance.
Investir pour le long terme dans les réseaux à très haut débit, c'est donc à court terme pour les acteurs publics renforcer la croissance et l'emploi.
2012, l'année pour les collectivités de la structuration nécessaire, préalable à un large déploiement THD sur les territoires
L'année 2012 a été l'occasion pour les collectivités de mettre en place les fondations qui leur permettront de passer à une phase de large déploiement du THD sur les territoires :
- Les Schémas Directeurs Territoriaux d'Aménagement Numérique (SDTAN), documents prospectifs établis par les collectivités et instaurés par la Loi Pintat de décembre 2009 relative à la lutte contre la fracture numérique, portent désormais sur 95 départements et 43 d'entre eux sont d'ores et déjà achevés.
- Les collectivités réfléchissent sur la meilleure structure de portage possible pour la mise en œuvre du THD : elles ont bien compris la nécessité de se regrouper pour être plus efficaces sur un même territoire et avoir la plus grande capacité financière et nombre d'entre-elles devraient s'engager dans la mise en place d'une structure de regroupement de type syndicat mixte ouvert.
- Les collectivités rentrent dans une phase opérationnelle en lançant des études d'ingénierie pour avoir une vision fine des conditions technico-économiques du déploiement du FTTH sur les territoires.
Bref, les collectivités ont passé ces derniers mois à se structurer et à se doter des outils pour être en mesure de déployer largement le THD sur les territoires, en passant d'une approche "artisanale" à une logique industrielle de masse.
A fin 2017, des projets des collectivités locales qui pourraient représenter 6 millions de prises FTTH pour 4,5 milliard € d'investissement …
En tenant compte des premiers projets ayant fait l'objet d'une procédure d'appel d'offres, voire d'une attribution de marché ou de délégation de service public et qui représentent plus de 2 millions de prises à réaliser, c'est un total de 6 millions de prises FTTH qui pourraient être réalisées par les collectivités locales à l'horizon 2017, pour un investissement global de 4,5 milliards €.
… sous réserve d'une amplification des cofinancements nationaux et européens et d'une meilleure prédictibilité des revenus sur les réseaux
Si les collectivités ont passé ces derniers mois à se structurer et si le "rouleau compresseur" du déploiement public va être disponible, il reste cependant à trouver le "carburant" nécessaire pour faire marcher la machine, en l'occurrence à trouver les financements pour les projets et à sécuriser les revenus qui pourraient être générés sur les réseaux Très Haut Débit.
Clairement, la concrétisation des projets identifiés par les collectivités suppose une amplification des cofinancements de l'Etat et de l'Europe et davantage de prédictibilité sur les revenus, qui pourrait être atteinte grâce à une réelle volonté des opérateurs de basculer leurs abonnés ADSL vers les nouveaux réseaux optiques et une action politique forte visant à programmer à terme une extinction ordonnée des réseaux cuivre, gage de visibilité pour les investisseurs.
L’équipe Développement de l'IDATE, une expertise reconnue auprès des collectivités et des Pouvoirs publics locaux et nationaux.
Les consultants de l'Unité Développement de l’IDATE interviennent sur l’ensemble des problématiques TIC en offrant une palette de prestations répondant aux attentes de ses clients, dans les domaines des réseaux à très haut débit, des observatoires et de l'évaluation, du développement économique, et des schémas directeurs d'aménagement numérique.
Dans le domaine de l'aménagement numérique des territoires, l'IDATE a notamment réalisé les SDTAN de la Région Alsace, des Conseils Généraux de l'Essonne, du Gers, de la Loire, du Territoire de Belfort, du Val-de-Marne, du Val-d'Oise, du Syndicat mixte de l'Aire Urbaine Belfort-Montbéliard.
L'IDATE est également conseil dans la stratégie THD et assistant à maîtrise d'ouvrage du Grand Lyon, des Communautés d'Agglomération de Montpellier et Rennes Métropole, ou encore de l'Etablissement public Debitex qui porte un projet de 120 000 prises FTTH sur 27 communes de la Seine-Saint-Denis et du Val-d'Oise.
Pierre-Michel ATTALI
Responsable du Pôle Réseaux et collectivités, IDATE
pm.attali@idate.org
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