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Slovenia Snacks on Fiber Diet

East European telco Telekom Slovenije is investing up to $620M in a nationwide fiber-to-the-home project

August 7, 2007

3 Min Read
Slovenia Snacks on Fiber Diet

European incumbent operator Telekom Slovenije plans to spend up to €450 million (US$620 million) between now and 2015 on a fiber-to-the-home (FTTH) rollout in an effort to deliver high-speed access capabilities to 70 percent of households in the small Eastern European country of Slovenia.

The plan is just one of a number of fiber rollouts across Europe that aim to bring true high-speed access to a continent that is fragmented in terms of its broadband access capabilities, competitive environments, and regulatory regimes.

Many of Europe's fiber access plans are being driven by utilities, municipalities, and local collectives, but telcos are now becoming more involved, with carriers such as Telekom Slovenije set to help drive Europe's FTTH connections towards the 8 million target set by the FTTH Council Europe . (See FTTH Council Sets Euro Target, Amsterdam Fires Up Muni Broadband, FT Fleshes Out FTTH , Iliad Plans €1B FTTH Build, and Neuf Launches 50-Mbit/s FTTx.)

There's only so much Telekom Slovenije can do to help towards that target, though, as Slovenia, situated east of Italy and south of Austria, has a population of just 2 million.

But the national carrier wants that population to benefit from broadband access as good as any in the European Union, which it joined in 2004. (See LR Insider Analyzes Eastern European Telecom Market.)

Telekom Slovenije, which calls its FTTH project F2, plans to spend €50 million ($69 million) this year taking fiber to 50,000 homes in Slovenia's main cities, running new cables through its extant ducts for the initial phase of the rollout.

The carrier's total planned capital expenditure budget for the year is €220 million ($303 million), so it is dedicating more than 20 percent of its 2007 capital outlay to F2.

The operator then aims to have 100,000 homes connected with point-to-point active Ethernet by the end of 2008 and 300,000 by the end of 2010. By 2015, it plans to have fiber running to about 434,000 homes, or 70 percent of Slovenia's households. This, believes the carrier, will help boost the uptake of bandwidth-hungry services such as IPTV, video on demand (VOD), and interactive gaming.

The carrier plans to invest €300 million ($414 million) in F2 by 2010, and €400 million to €450 million ($551 million to $620 million) by 2015.

Some of that money is coming from the European Investment Bank, which has granted a €100 million ($138 million) loan to the carrier for its broadband plans. That loan also includes funding for the rollout of xDSL and WiMax technology in Slovenia.

Telekom Slovenije hasn't waited for fiber to launch such services, though: Its consumer division, SiOL, launched its IPTV offer earlier this year. (See SiOL Does IPTV With Thomson.)

It's also offering hosted VOIP, and has forged a partnership with Microsoft Corp. (Nasdaq: MSFT) for developing new services. (See Telekom Slovenije, MSFT Team and Telecom Slovenjie Uses Broadsoft.)

The new network and services rollout comes as the incumbent faces increasing competition from alternative operators, such as T-2 and In.Life, and pan-European cable operator UPC Broadband . (See UPC Reports Q1, Ciena Wins in Slovenia, and Slovenians Use Verso for VOIP.)

The main vendor beneficiary from the FTTH rollout, though, is local firm Iskratel d.o.o. , which is supplying the Fiber Access version of its SI3000 multiservice access family of products. This is Iskratel's first major FTTH deal. (See Iskratel Wins FTTH Deal and Iskratel Unveils MSAN.)

Although neither party is saying just how much this deployment is worth to Iskratel, it seems the equipment vendor is, at least in the initial phase of the rollout, the only supplier of network edge gear. A spokesman for the equipment firm says it's also providing customer premises equipment. The spokesman adds that Iskratel expects to supply most of the deployment's connections through 2015.

The carrier/vendor relationship doesn't end there, as Iskratel is also providing the incumbent with technology for its WiMax trials. (See Iskratel Adds WiMax to MSAN.)

— Ray Le Maistre, International News Editor, Light Reading

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