FTTH: a financial model to the rescue

Last Friday I was invited to attend a meeting of the economics sub-committee within the Deployments & Operations committee of the FTTH Council Europe. A big honor and a chance to meet with some very real fiber guys, from companies such as Draka Comteq, Wavin, Corning and Van den Berg Infrastructuren.

The point of the whole council obviously is the promotion of FTTH, and this particular sub-committee wants to lure potential investors. One thing that was already agreed upon was that a proper financial model would be a great tool. The big issue with models however is that nobody trusts anybody else's model. Potential investors would no doubt be very suspicious of such a thing coming out of the FTTH Council.
So, for now it was decided that the sub-committee should aim for some sort of a generic framework (including all relevant parameters) that investors can toy around with. One consultant will be hired to build it, another to validate it. And all that is supposed to be available for next years's conference in Copenhagen.

Of course we got into all sorts of interesting discussions on this noble FTTH cause. One really stood out for me. I have been under the impression that most everybody agreed that all we need is a single FTTH network, but I have to admit that it shouldn't have come as a surprise that the vendor community (well, not all of them) have a different view. All they really want is to bury as much fiber as possible.
If the business case for FTTH is shaky to begin with, and if the FTTH Council wants to be credible, this may not be the direction it wants to go. Also, you run into all sorts of difficulties (an undesirable US style duopoly; who controls the in-home network?; there are limits to opening up the streets; etc.).

Another topic was the buried cable v. buried duct views. Did you know that the way the city of Amsterdam was constructed precludes ducts being put in the ground? There simply isn't the space for them. So, no business for Wavin here.

Finally, one of the commitee members said he notices interest in a fiber connections as such. This runs counter to conventional wisdom, according to which people are not interested in technology but rather value whatever they can do with it. Who knows, people are being educated on FTTH at a quick pace and understand the benefits. That bodes well for real estate developers who see FTTH investments as enhancing the value of their properties. Personally, I would add that having an office space in your home is another smart move to real estate riches.

I hope to be posting a lot more on the progress of this sub-committee. (Next meeting: May.)