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digits
digits
12/5/2012 | 4:08:49 AM
re: Eurobites: Light Me!
So... will Europe's be forced to bite the bullet and invest in fiber to the curb/home even though, for mnay, the economics aren't that favorable?

Like many areas now -- VOIP, IPTV, and so on -- it looks like competition is going to push the national carriers into doing things they either wanted to keep on ice for a few more years or not do at all.

But maybe they won't need to dig and light their own fiber. Open, municipal fiber networks = infrastructure the incumbents can use too. And who has the largest customer base and marketing dollars? Maybe they can turn these situations to their advantage, and become more focused on services than network operations.

paolo.franzoi
paolo.franzoi
12/5/2012 | 4:08:48 AM
re: Eurobites: Light Me!

I don't disagree with what stephen says at all.

There were also extensive FTTH trials in the US. I believe there are people still maintaining the Nynex equivalent of Opal (both were based on Raynet equipment). So, having trials is not a meaningful way of measuring whether a new deployment scheme is happening.

Until there is some actual pressure, I do not believe any incumbent will spend any significant dollars on a network upgrade. What FT is doing is initial preparation for what they might want to do IF it is required. I personally believe that these experiments are not anywhere near as helpful as carriers make them out to be. If I were FT, I would hire and loan some people to Verizon to learn what happens in a real buildout.

seven
blueshoes
blueshoes
12/5/2012 | 4:08:48 AM
re: Eurobites: Light Me!
Ray

I think the problem is maybe due to the fact that they have been burnt once already: FTTx is not new in Europe, in fact it is a very old concept: ie

1. Didn't Deutsche Telekom have a thing called (I hope I am right) called Project Opal, when they decided to light up the whole of what was previously East Germany - at a massive cost - when perhaps just putting one phone box on every street corner would have been a step-function improvement?

2. 1978 France Telecom announced plans to do the same to thousands of homes in Biarritz, and within a few years had actually done that, and then started an entire Plan Cable project.

3. Wasn't BT trialling FTTH in Bishops Stortford way back at around 1986 or 88?

Problem was, none of these came to much, because none of them gave the consumer extra services that they were willing to pay a dime for.

The man who has done more than any to convince the consumer that not everything can be cheap 'n easy was Rupert Murdoch - when his Sat TV Launched he decided to go for a Pay-Per-View model on some of the premium content. Free-2-Air companies laughed at him, but he figured that entertainment has a price tag too - in the end, he was proved correct.
stephencooke
stephencooke
12/5/2012 | 4:08:48 AM
re: Eurobites: Light Me!
Ray,

Each carrier's situation is different but some generalizations are possible:

- Incumbent's see the cost of deploying a network as a barrier to entry for competitors. In fact they see their installed and operational network as their greatest asset.

- Though they may have bigger marketing budgets they feel that they have already won the customers that will be potentially pried away due to reduced entry barrier costs by upstart competitors (ie: they will have to work harder, and spend more money to retain their existing customer base. Spending more money on advertising reduces profitability when you are just retaining your existing base.).

- Services are easy to roll out compared to the logistical challenges of deploying a new access network. This means it is easier and cheaper to compete with the incumbents.

- Though most of the incumbents were initially funded by government tax revenues, they feel that any government money spent to increase competition against them is anti-business and fight it with everything they've got. This boils down to 'it was OK for the government to do it for us, but not for anyone else'.

- Muni networks take ownership/control of the last mile away from the incumbents. Today, even if the consumer selects a competitive carrier, that carrier has to pay usage fees to the incumbent so all revenue is not lost. Muni networks change that model so that the selection of a competitive carrier is not a revenue reduction but zero revenue.

Politicians like FTTx-type infrastructure in their jurisdictions because they can advertise it as a benefit of setting up shop in their city relative to others. Muni networks also let them set the timeframe for the deployment, again relative to others, as opposed to waiting for a network provider to build their own internal business case.

Steve.


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