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.
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.
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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.
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.
Head of the Telecoms Business Unit at IDATE
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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.
Responsable du Pôle Réseaux et collectivités, IDATE
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Head of the Telecoms Business Unit at IDATE
220.8 million FTTx subscribers in the world by the end of 2011
IDATE proposes a watch service for the fiber market and publishes half-yearly the key data of this market for the world - including 70 countries, 150 key actors and forecasts until 2016. The global market for FTTx access continued to grow in 2011. The total number of FTTx subscribers by the end of 2011 was more than 220.8 million, with sustained FTTx growth of 25% in the second half of 2011.
“FTTH/B architecture remains by far the most common in Europe but not in North America (6.2 million VDSL subscribers) or in Asia/Pacific (124.5 million FTTx+LAN subscribers). In late 2011, there were 77 million FTTH/B subscribers in the world compared to about 250 million homes passed by FTTH/B”, says Roland Montagne, Head of Telecoms Business Unit at IDATE. “Changes in the high-speed broadband 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 high-speed broadband coverage, to meet a potential significant change in demand. This worldwide trend, however, varies from country to country”
The FTTx key markets situation
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 were14% 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 high-speed commercial policy is still relatively unconvincing. Note that the Ukraine retained its 10th place position.
This ranking remained relatively the same as that shown in mid-2011, except for the change in rankings of Sweden and France.
Be aware that the strong growth of high-speed broadband in the United Arab Emirates could result in it breaking through into the top 10.
FTTx operators worldwide ranking
As Asia/Pacific largely dominates the FTTH/B market, with more than 75% of the total number of subscribers, the players also dominate. Actually, there are 7 Asian operators among the Top 10 players in terms of the number of FTTH/B subscribers worldwide.
The leader continues to be the incumbent Japanese operator, NTT, with more than 16 million FTTH/B subscribers in late 2011. It is closely followed by the two primary Chinese operators, China Telecom and China Unicom, who are also involved in the deployment of FTTx+LAN architecture. However, if you take into account all FTTx architectures, these two Chinese operators outscore by far NTT, which has seen relative stagnation in its high-speed broadband subscriber base. The Chinese market seems to offer very strong growth in fibre optic deployment. For example, between June and December 2011, China Unicom increased by 177% the number of homes passed by its FTTH/B network and its competitor saw a growth rate of 80% in homes passed by FTTH/B.
Nevertheless, leadership in Asia/Pacific is relative. Strong growth in China requires stable markets. For example, due to its lack of innovation in the services it proposed, SK Broadband in South Korea faced a churn rate for FTTH/B of 6% over the second half of 2011, compared to 15% between the end of 2010 and the end of 2011.
The leading American operator, Verizon, has more than 60% of FTTH/B subscribers in the United States. Its growth was relatively stable throughout the second quarter 2011 with an increase in its FTTH subscriber base of 8% but it still garnered a 5th place position of the top 10 FTTH/B players worldwide. In addition, Verizon is concentrating more on the acquisition of new subscribers instead of expanding it fibre optic network.
For Europe, only one country made the rankings list, Russia due to its ER Telecom and Beeline operators. Their fibre strategy is based on acceleration of their coverage as well as an increase in their FTTH/B subscriber base.
Head of the Telecoms Business Unit at IDATE
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Director Telecoms Business Unit
Montpellier, France – Within its on-going monitoring of the World FTTx Market, the DigiWorld Institute by IDATE publishes twice per year FTTx market’s key figures covering 70 countries and over 150 market players with forecasts up to 2016. At mid-2011, the worldwide growth rate in terms of FTTH/B subscribers remains high with more than 54% between mid-2010 and mid-2011 to reach a total of close to 67 million subscribers in mid-2011. Furthermore, the number of Homes/Buildings-passed worldwide accelerates increasingly, with an impressive rate of more than 47% between mid-2010 and mid-2011 which leads to nearly 179 million homes connected to fiber in mid-2011.
Worldwide FTTx market at end of June 2011 – FTTH/B remains the most widely used network configuration
The global FTTx market continued to grow in the first half of 2011, with a subscriber base that increased by around 15%: as of June 2011, there were more than 112.6 million FTTx subscribers around the world. This rate of growth was nonetheless well below the roughly 39% increase of the previous six months which saw a massive rise in FTTx subscriber numbers in China – a growth spurt that has since levelled off. FTTH/B remains the most widely used network configuration, accounting for over 67 million subscribers worldwide out of a total of roughly 179 million homes passed.
An analysis of the figures for the first half of 2011 reveals a certain levelling off of the global ultra-fast broadband market’s growth momentum. The strong increase in FTTx subscriber numbers during the previous six months could be attributed mainly to the Chinese market whose carriers released more information on actual penetration levels for their superfast broadband offers.
The increase in the number of homes passed is once again higher than the increase in actual subscribers, which confirms that rollouts continue to be a priority for a great many players, as they anticipate a massive uptick in demand further down the road. This is true around the globe, although situations do vary from country to country.
China has consolidated its number two spot behind Japan (if we discount the country’s FTTx + LAN subscribers). There is nevertheless a real gap in the two countries’ growth rates for December 2010 to June 2011 which stand at 14% and 5% for China and Japan, respectively. If this trend continues, it will not take long to have an impact on global rankings – and we can expect to see China overtake Japan for top spot in the not too distant future.
Russia continues to be the biggest FTTH/B market in Europe, with close to 5.2 million FTTH/B subscribers as of mid-2011. Sweden is still in the top 10 but its figures have progressed very little from six months earlier. France has been making real strides but ISPs there are still having trouble persuading broadband customers to switch to FTTH/B, and penetration rates (i.e. percentage of homes passed that actually subscribe) are still low. Meanwhile, in the rest of Europe, the countries in the East and West will soon fall behind developing nations which have much greater potential for growth.
The top 10 ranking for the biggest FTTH/B subscriber bases as of June 2011 is therefore very similar to the one for the end of 2010 – the only notable change being the fact that India has pulled ahead of Sweden.
Looking at the top players, all types of new-generation network combined, Asian carriers still head up the rankings, occupying seven of the top 10 positions in terms of FTTx subscribers.
China’s two main carriers now occupy the top two spots – ahead of Japan’s longstanding market leader, NTT – and they are expected to widen their lead in the coming months thanks to their rollout plans, and the fact that NTT’s subscriber base is not expected to grow that much further. The Asian market is especially disparate: China is experiencing a massive growth spurt while other markets are levelling off. Plus, a few carriers are even having to contend with losing their ultra-fast broadband customers to the competition – a prime example being SK Broadband in South Korea, whose subscriber numbers shrank by a whopping 14% during the first half of 2011.
Meanwhile telcos in the US, and especially AT&T, continue to enjoy steady growth and have been able to strengthen their position in the internet market with respect to cable companies which are gradually upgrading to DOCSIS 3.0.
Over in Europe, only Russia’s ER Telecom has made it into the top 10 rankings – coming in at number eight.
DigiWorld Institute by IDATE
Roland Montagne - Director Telecoms Business Unit - email@example.com
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