Accessing Fixed Networks and Facilities
to Speed Up Broadband Rollout
Presented by Andrew Gorton
CANTO 29th Annual Conference & Trade Exhibition
14th to 17th July 2013
Summary
In the context of broadband delivery and fixed networks and facilities I will
look at:
1.
The general basis of the requirement for access to fixed networks and
facilities for broadband delivery;
2.
Cost effectiveness and customer demands;
3.
The reasons that operators require the option of fixed transport as a
part of their overall strategy to compete fully for broadband;
4.
The reasons that nationwide fixed infrastructure is not economically
replicable;
5.
How access to fixed networks and facilities in the Caribbean where an
operator has dominance in local loop provision, access to non telecoms
facilities, and building codes can accelerate broadband penetration.
1/ Requirement for Access to Fixed
Networks/Facilities for Broadband Delivery
a)
The need to deliver huge amounts of data, and in particular video data,
for broadband purposes requires operators to use the most cost
effective means of delivery.
b) Lower costs lead to lower retail prices which will do the most to drive
broadband usage and penetration.
c)
Long established and depreciated fixed networks and facilities
(including non telecoms facilities) an represent and facilitate the lowest
cost mechanisms for data transport.
d) Some customers also insist on fixed underground network delivery of
their critical data.
1/ Requirement for Access to Fixed
Networks/Facilities for Broadband Delivery
Global Internet Protocol Traffic (PB per Month) - Cisco Visual Networking Index 2013
2012
2013
2014
2015
2016
2017
CAGR
Fixed Internet
31,339
39,295
47,987
57,609
68,878
81,888
21%
Managed IP
11,346
14,679
18,107
21,523
24,740
27,668
20%
Mobile Data
885
1,578
2,798
4,704
7,437
11,157
66%
Note that: a/ public internet traffic is a subset of about 60 to 70% of total
IP traffic; b/ over 50% of public internet traffic is forecast to originate from
wireless devices (including mobile) by 2017.
2/ Cost Effective Delivery of Broadband
and Customer Demands
a)
Established fixed networks and supporting infrastructures are generally
heavily depreciated. In other words, the cost of laying the network and
in particular the cost of digging trenches and laying ducts and building
other infrastructure was long since recovered.
b) Costs are therefore generally limited to ongoing operational and
maintenance costs.
c)
Fibre can be laid down the existing fixed infrastructure to provide the
highest possible capacity; high speed copper technologies are also
possible.
2/ Cost Effective Delivery of Broadband
and Customer Demands
d) A depreciated fixed network and supporting infrastructure will
represent the lowest cost and highest capacity way of delivering
broadband in some cases.
e) In those circumstances there is a need to transport as much data as far
as possible via a fixed network to keep costs and prices to customers
down.
3/ Reasons Broadband Operators Require
Fixed Transport Options
In order to:
i.
ii.
iii.
meet increasing demands for Broadband data;
offer Broadband data at the lowest cost (which is the key
determinant in driving customer take up);
Meet customer requirements where they require fixed
underground delivery of data.
There is a need for service providers to utilise fixed networks as a part of
their overall broadband delivery strategy if they wish to be able to
compete effectively across the entire telecommunications market and to
drive broadband penetration.
4/ Nationwide Fixed Network Support
Infrastructure Not Viable to Replicate
1.
The cost of replicating the entire national supporting infrastructure
along which an incumbent’s fixed underground network is laid is,
generally speaking, not likely to be viable.
2.
The costs of civil works including trenching and ducting, as well as the
challenges of planning restrictions represent too great a barrier.
3.
The European Commission’s June 2012 report on its 2011
Telecommunication Market and Regulatory Developments investigation
which states that: “….it is estimated that up to 80% of the costs of next
generation network (NGN) deployment are related to civil works…”
5/ Access to Caribbean Fixed Networks and
Facilities Where Dominance Exists
a)
Access to the fixed networks and facilities of operators which have
dominance in local loop provision (fixed network subscriber lines) will
enhance broadband competition, lower prices and thereby to
accelerate take up by citizens.
b) There are a variety of approaches in this regard including duct access;
local loop unbundling (copper and fibre); bitstream, and white-label
services as implemented in many countries worldwide. European
experience has shown that LLU is the best long term proposition.
“New entrants use local loop unbundling (fully unbundled lines and
shared access) as the main option to access the incumbent network.
There is a continuous migration towards full LLU, all other types of
access to the incumbent network is going down.” (Circa 35 million
unbundled local loops and increasing, closest other is bitstream at circa
5 million) - European Commission’s Digital Agenda Scoreboard 2013
5/ Access to Caribbean Fixed Networks and
Facilities where Dominance Exists
d) We therefore encourage incumbents, regulators and Ministries as
applicable to start the work with other operators of establishing the
detailed terms and conditions for access to fixed networks and facilities
owned by players with market dominance, as well as non telecoms
infrastructure, as those will take some time to complete.
e) In particular pricing will be a very important feature as incumbent fixed
network pricing in the region for example overall seems to have
received relatively little attention, probably because mobile has
received so much attention.
f)
For example, the average cost of fixed interconnection in Digicel’s
markets is 416% of the average cost found in Europe (circa 2.7 US cents
versus 0.6 US cents).
5/ Access to Caribbean Fixed Networks and
Facilities Where Dominance Exists
g)
Building codes could require telecoms ducting to be installed when civil
works eg roads, or houses are being built, or at least provide the
opportunity to let providers install ducts.
h) Long standing duct, pole and copper access should be at cost.
i)
Fibre access pricing can perhaps be given more latitude.
Recap
I have looked at:
1.
2.
3.
4.
5.
The general basis of the demand for access to fixed networks and
facilities for broadband delivery;
The reasons that access to fixed networks and facilities can sometimes
be the most cost effective approach;
The reasons fixed delivery is a necessary part of the overall strategy to
compete fully in broadband provision;
The reasons that nationwide fixed infrastructure is not economically
replicable;
How access to fixed networks and facilities in the Caribbean where an
operator has dominance in local loop provision, as well as access to
other infrastructure, and building codes can accelerate broadband
penetration.
Thank You !