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brooks7
brooks7
12/1/2016 | 6:28:38 PM
Re: "Civil works" is ~70% of an ftth network
That is only true if the building owners let you work in their MDUs and MTUs.  Not always the case.

seven

 
teak0
teak0
12/1/2016 | 2:42:51 PM
"Civil works" is ~70% of an ftth network
Hello It's important to remember "civil works" including cabling, splicing and testing can be ~70% of the initial cost of an ftth network. A common "mistake" is to treat single family homes "as equal"to MTUs and MDUs. The Rate of return of an ftth project can improve dramatically (assuming provider has a handle on programming costs) if MDUs and MTUs are wired first with plug and play solutions before single family homes
Duh!
Duh!
12/1/2016 | 1:32:49 PM
Re: Wild SWAG
Large operators make decisions like this based on detailed financial models. Presumably, somebody at Altice modeled CAPEX per home passed based on overbuilding existing plant. The models presumably also took OPEX savings into account. Passive plant is dramatically cheaper to maintain than active plant, and requires much less electric energy.

Other operators' cost models necessarily vary, as do financial criteria for go/no go and other strategic objectives. I wouldn't presume to second guess any operator's upgrade vs. replace with FTTH decisions without first seeing the numbers and reasoning behind them.
iainmorris
iainmorris
12/1/2016 | 12:38:41 PM
Re: Wild SWAG
Good points. However, the article does note that Adtran was talking about FTTH deployment costs generally, and not in specific reference to Altice or another incumbent, and also that Altice's costs could be somewhat lower because of investments already made.

That said, there is clearly a huge bill to foot, even for incumbents, or there would obviously be far more willingness to invest. European incumbents like BT and DT constantly fret over the investment requirements for FTTH, and have held off on big commitments because of them. As you point out, the use of a proprietary tech could also drive up costs for Altice. 
Duh!
Duh!
12/1/2016 | 12:02:12 PM
Wild SWAG
I have no idea what's behind Adtran's numbers. I strongly suspect that they assume greenfield or an overbuild by a non-incumbent.

Incumbents have a significant CAPEX advantage in overbuilding their own outside plant. For aerial plant, they can overlash existing strand with minimal make-ready hassles. For underground plant, they can use their existing duct without having to negotiate with with the duct owner. Their costs come closest to parity for direct-buried cable -- but even there, they have established rights-of-way. Those things avoid most of Altice's biggest cost drivers for FTTH overbuild.

As far as Altice's "proprietary technologies": it's doubtful that they can reduce CAPEX by rolling their own PON standard. XGS-PON and 10G EPON enjoy economies of scale that another flavor of PON can't touch. More likely, they're referring to proprietary OSP technologies. There is plenty of room for innovation in that space, for relatively low non-recurring engineering and tooling costs.


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