Wednesday, September 17, 2008

Land of war and mystery

Being part of the Fiber Ring sometimes brings along a Lord of the Rings feel. Fiberland too is full of war and mystery.

Take Italy. The government is preparing to pump EUR 1bn into a nationwide broadband effort at a total cost of EUR 10bn (at this price level one can only assume we are talking NGN or FTTC/VDSL, not NGA or FTTH - unless of course the government is thinking of creating a nice and big digital divide by only hooking up the north). Yesterday AGCOM added that Telecom Italia indeed needs this kind of government and PPP support, because it cannot do it on its own.
Interestingly, the whole effort is supposed to add 1.5-2.0 pp to GDP.

Can anyone explain to me how any such investmmnet could not be justified, in light of this GDP enhancement? (Doing a little Wikipedia research, it looks like the economic benefit could be something like EUR 28bn a year.)

Or take the Netherlands. UPC is usually fighting the threat of superior fiber bandwidths by launching extremely aggressive pricing. This time around however, things are turned upside down.

UPC (part of Liberty Global) is rolling out DOCSIS 3.0 (advertised as 120 Mb/s, but we all know this is shared and not symmetrical), and at the same time the Reggefiber/XMS combo is waiving installation costs (normally EUR 150) and maintains a very competitive promo (20 EUR/mo for the first 6 months).


Clayton said...

Italy is pretty unique in Europe (and possibly the world) in terms of it's copper network topology - this is what drives their 'NGA' plans. Something like 90% of their copper loops are shorter than 1.5km meaning you can cover this with ADSL2+ (or even VDSL) from the exchange and still get great speeds. It looked like a really expensive network to run when they were supporting POTS but it's a kind of brilliant architecture for high speed DSL.

Lewton said...

What the Italian government plans to do is quite unclear yet, so everything we write is speculation.

But yes, I also think they intend to create a digital divide (not between North and South, but rather between bigger cities and the rest), as will Greece with its own national FTTH plan. You may find my post on the Greek plan interesting:

However I actually feel both countries' governments are right. If they were to expect a plan to concern the whole country before they supported it, then they would have to wait for a long time.

I've made the question to the Secretary of Communications of the Greek Ministry of Transportations and Telecommunications, and he told me that after the construction of the FTTH plan begins, then the Ministry might try to finance a similar project based on an FTTN network for the rest of the country, depending on what the economic environment will be.