Showing posts with label VDSL. Show all posts
Showing posts with label VDSL. Show all posts

Sunday, August 09, 2020

Week 32 in Telecoms, Internet, Media

CORPORATE

Earnings
  • VodafoneZiggo: 20Q2 prelim (final: Aug 2020)
    • stopped using OCF, replaced by Adj EBITDA
    • 95% of targeted cost synergies (210m) realised, on track to deliver 1 yr early
    • spectrum costs (EUR 416m) to be paid 50/50 in 2020 & 2021, to be funded by new shareholder loans
    • maintains guidance 2020 (despite expected economic slowdown): adj EBITDA stable to modest growth, TSR 400-500m
  • Liberty Global 20Q2
  • TIM: 20Q2
  • Intred: 20Q2
  • Magyar Telekom: 20Q2
  • CK Hutchison/3 Group Europe: 20Q2
  • Rostelecom: 20Q2
  • SES: 20Q2
  • Intelsat: 20Q2
  • Viasat: 20/21Q1
  • Warner Music: 20Q2
  • Sony: 20/21Q1
  • Walt Disney: 19/20Q3
  • ViacomCBS: 20Q2
    • Pluto reached 26.5m MAU in US (target 30m YE 2020), global 33m MAU
    • CBS All Access & Showtime 16.2m subs in US
  • Discovery: 20Q2
  • AMC Networks: 20Q2
  • AMC Entertainment: 20Q2
  • Fox Corp: 20/21Q4     
  • ITV: 20Q2 
  • Activision Blizzard: 20Q2
  • Nielsen: 20Q2
    • to spin off Global Connect unit 21Q1

M&A

Funding
Expansion
  • Amazon
  • UGC
    • Facebook: Instagram launches Reels in >50 countries [see 20070716]: create 15-sec edited videos
    • Snap: Snapchat launches feature to add music to Snaps (trial in Australia & NZ) [a la TikTok], licensing deals with Warner Music, Warner Chappell, Universal Music Publishing, NMPA, Merlin


NETWORKS

Fixed

5G

4G


CONTENT

Video

  • SKO (NL): living room TV set usage down for live linear TV, up double digit for delayed and VOD viewing
  • US District Judge approves DoJ termination of Paramount Consent Decrees (barred studios from owning movie theaters (applied to Warner Bros, 20th Century Fox, Paramount)
  • Walt Disney
    • Disney+ reaches 60.5m subs; Mulan to premiere on Disney+ 200904 for $30 (one-off TVOD offering); Disney+ to expand to Indonesia 200905
    • plans new int OTT service Star 2021 [instead of expanding Hulu internationally], content from content from ABC, FX, Freeform, Searchlight, 20th Century Studios, no licensed content, focus on adults
    • Disney+, Hulu (35.5m) & ESPN+ (8.5m) have combined >100m subs
    • Hulu adds annual subscription tier, 60 $/yr (first for existing subs)
  • ViacomCBS
    • No plans to bundle CBS All Access, Showtime, BET+. Noggin as single service in US
    • Plans global SVOD service early 2021 in Australia, Nordics, Latam, with originals from Showtime, CBS All Access, content from CBS, MTV, Comedy Central, Nickelodeon, some first-run moviers from Paramount; to continue from existing services in some countries: Australia (CBS All Access), Nordics, E-Europe, Latam (Paramount+)
  • Discovery plans streaming service (as companion to services such as Netflix, Amazon Prime Video, Disney+)
  • Eleven Sports rebrands to Eleven; strategy update (2.0): to expand in Europe from 2021, adds 3 vertical: Elevenwomen, Elevennext (local), Eleven Esports
  • Quibi launches free+ads AVOD tier in Australia/NZ, reduces SVOD tier from 13 to 7 AUD/mo

Music

Gaming

  • Microsoft: to launch xCloud (streaming) 200915 for Android (ended iOS test) in 22 countries (AT, BE, Canada, CZ, DK, FI, FR, DE, HU, IE, IT, NL, NO, PL, PT, Slovakia, ES, SK, SE, CH, UK, US) with >100 games, as part of Xbox Game Pass Ultimate (15 $/mo); with Xbox & 3rd-party controllers (Sony, Razer, PowerA, 8BitDo); distr deal in SK with SKT

SERVICES

Telekom DE expands MagentaEINS-Beta-Tarif (service ends 210930) to 2000 more subs, 20 EUR/mo in 12 mo contract: fixed (VDSL max 50 Mb/s + mobile (LTE; unlimited in DE for voice, text, data; 15 GB EU data) 
KT launches smart building services, with KT Estate: Smart Building Sensing (monitors boilers, water tanks, motors & other operational facilities), Smart Building BEMS (building energy management system) 
Lycamobile BE (MVNO on Base = Telenet) launches unlimited (voice, text, data with FUP of 35 GB/mo, thereafter throttling to 512 kb/s, EU roaming 19 GB/mo) prepaid, 40 EUR/mo


HARDWARE

Samsung Galaxy Unpacked: launches Galaxy Note20 & Galaxy Note20 Ultra (notebook with new S Pen, with 5G), Tab S7 & S7+ (tablets with 5G), Galaxy Watch3 (smartwatch with health features), Galaxy Buds Live (earbuds), Galaxy Z Fold2 (foldable smartphone)
Google launches Pixel 4A smartphone in US, $350 (ships from 200820); to launch Pixel 4A with 5G (from $500) & Pixel 5 with 5G autumn 2020 - Discontinues Pixel 4 & 4XL - Rumor: plans foldable smartphone (Project Passport) 21Q4
Amazon launched 2nd version of Ring Video Doorbell, $100


REGULATORY, CSR

Spectrum

  • AKOM (Slovenia) plans 5G auction (700, 1500, 2.1, 2.3, 3.6, 26) 20H2, with caps per bidder: 2x35 MHz in low bands (700, 800, 900), 190 MHz in midbands (2.3, 3.6), 1x800 in 26 GHz, 425 MHz in low/mid (700, 2100, 2300, 3600 incl current holdings in 800, 900, 1800, 2600)
  • Ofcom (UK) plans auction (simultaneous multiple round ascending, SMRA) Jan 2021
    • to add 18% to total spectrum; 80 MHz in 700 band (6 lots of 2x5, reserve price GBP 100m each; 4 lots of 1x5 for down only, reserve price GBP 1m each), 120 MHz in 3.6-3.8 band (24 lots of 1x5, reserve price GBP 20m each)
    • no coverage obligations
    • 37% cap on total spectrum, restricts MNOs to acquire max 120 MHz (BT/EE), 185 MHz (3), 190 MHz (Vodafone), unrestricted (O2)
    • combined reserve prices GBP 1.084b
    • to facilitate defragmentation of 3.6-3.8 band by allowing negotiations during assignment stage, enabling the winning of adjacent spectrum
    • Vodafone and 3 propose to cancel auction (award spectrum at reserve prices) because of cost to remove Huawei equipment
  • FCC (US) PAL (3550-3650 MHz) auction (CBRS, auction 105) reaches $2.2b after 28 rounds    
  • FCC (US) plans C-band (280 MHz in 3.7-4.0 GHz range) auction to start 201208

Telecoms

Platforms

  • Alphabet
    • YouTube: Banned 1000s of Chinese accounts (2596 in 20Q2) over coordinated influence operations on political issues
    • Alphabet: The Markup: Alphabet made certain words taboo (market, barriers to entry, network effects) when training new employees
  • Amazon:
  • Facebook
  • Twitter
    • FTC could fine $150-250m for misusing emails & phone numbers (for targeted ads), based on 2011 agreement
    • To exclude tweets from state-controlled media organisations (except those with editorial independence, such as BBC, NPR) from its recommendation systems (for search, notifications, timelines)
  • Apple: removes 27k games & apps from App Store in China to comply with Chinese law

Platforms general:


STOCK MARKET PERFORMANCE

European telecoms
  • Week 32:
    • Benchmark EuroStoxx 50: +2.5%
    • Winner TalkTalk (+10%), loser VEON (-7.7%)
  • YTD:
    • Benchmark EuroStoxx 50: -13%
    • Winner Intred (+75%), loser Intelsat (-95%)
Global media
  • Week 32:
    • Benchmark S&P 500: +2.5%
    • Winner AMC Entertainment +18%, loser Salem Media -9.0%
  • YTD
    • Benchmark S&P 500: +3.7%
    • Winner Bilibili (+123%), loser Gannett (-76%)


at 4:56 pm 0 comments
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Thursday, February 01, 2018

KPN Q4: FTTH to migrate to PON technology after 2018

Details from the main release

  • Outlook 2018
    • Adj EBITDA flat, capex 1.1b, FCF up (excl TEF DE div), div 12 c/share; Telefonica DE stake 8.6%
  • IFRS 15
    • recognition & measurement of revenues
    • different timing of revenue recognition for handset transactions via direct & indirect channels, and a higher threshold probability in revenue related disputes
    • revenues for handsets sold via direct channels are recognized in the P&L as nonservice revenues at date of the transaction, matching the associated handset costs. Revenues (nonservice) and fees (SAC) for handsets sold via indirect channels are no longer recognized in the P&L, but reported in the balance sheet. The threshold in revenue related disputes (variable consideration) is raised, meaning that revenues are only recognized when highly probable (>75%), up from >50% under IAS 18)
    • impact (from 180101): adj rev -130m, adj EBITDA -100m, FCF unchanged, equity (at 170101) +285m
  • Q&A
    • RLAH more favorable than expected (wholesale costs, VR income, data usage grew multiple (>3x)), effect 2018 comparable (shorter yoy effect but expanded usage)
    • Expects Business Market stabilisation in 1-3 yr
    • 3.5 GHz band crucial for 5G
  • Technology update
    • Fiber reduces latency to 6 ms (DSL 14 ms, LTE 20-26 ms)
    • FTTH reaches 2.3m HH, new build FTTH only, AON in 2018, thereafter migration to PON (not for existing lines), plans access on 3rd party FTTH
    • Stepped up FTTO (after regulation ended)
    • FTTS reaches 80%
    • Bonded V Plus roll-out from 18Q2 (>400 Mb/s), cabinets suitable for VDSL & FTTH, local loop typically 150 meters
    • Hybrid DSL/LTE has 1400 subs (Nijkerk trial), average download 6 to 73 Mb/s (note: DSL is needed for IPTV & fixed IP address, LTE for peaks & streaming)
    • LTE-M nationwide by 18Q2
    • Plans 4 5G pilots: urban, rural, transport & logistics, automotive ("4G connects people, 5G connects society")
    • Plans VoWiFi
    • Network integration
      • Access
        • 1. Combine (hybrid access): FTTC/FTTH & DSL/LTE
        • 2. Massify (facilitate massive device comms)IoT over LoRa, LTE-M and 4G M2M
        • 3. Verticalise (5G for verticals): eMBB (broadband), mMTC (massive), URLLC (latency)
      • Core
        • 4. Rationalise (simplification): all-IP
        • 5. Virtualize (increase scalability, reduce time-to-market): NFV (generic cloud hardware, faster time-to-market) & SDN (smart routing)
        • 6. Decentralise (content closer to consumer): CDN at 161 metro locations (for content caching, core-network offloading, improves experience), edge computing (for 5G, improves latency for automotive, e-health, smart industry)
    • Simplification: phase 3 of simplification will follow (savings 1 & 2 relative to 2016: 570m EUR/yr)
    • IT simplification: originally for 80k subs, invisible for customers, focus on a single My KPN app, focus on open source, added 150 developers in 2017 (total 30 nationalities), time-to-market (halved to 7 days) to be halved again

at 11:04 am 0 comments
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Wednesday, August 06, 2014

KPN's very disappointing road to VDSL, away from FTTH

It's becoming a new reality: KPN no longer is the torchbearer of the fiber community.

This historic chain of events:
  • 2008: acquires 41% of Reggeborgh's Reggefiber FTTH venture, with calls/puts for the remaining 59%. Pays in assets (its own FTTH efforts) + EUR 100m cash. Accepts regulation as part of the deal. At the time, Reggefiber Newco had just 10k HP.
  • 2011: acquires other FTTH assets (mainly ISPs) from Reggeborgh and Reggefiber, alters joint venture agreement with Reggeborgh.
  • 2012: raises Reggefiber stake to 51% for EUR 99m upon reaching 1m HC.
  • Oct. 2013: cuts Reggefiber expansion plans to 250k HP/annum (from 350-400k). Capex per HP down to EUR 800 and falling.
The recent developments:
  • Jan. 2014: to expand Reggefiber stake by 9% to 60% + consolidation & control.
  • Price to be paid (as becomes clear recently) EUR 161m, i.e. at the upper end of the range (EUR 116-161m). This suggest Reggefiber's equity is valued at (at least) EUR 1.789bn.
  • At this time, Reggefiber (passive network) had 1.688m HP and 547k HA. KPN (active network) does not disclose its number of HP anymore, but has 484k HA.
  • When this call option is exercised, Reggeborgh may immediately exercise its put option for selling its 40% stake to KPN. At the above valuation, fair value would be EUR 716m. This suggests, that Reggeborgh will indeed exercise immediately. As a result, KPN will go to 100% of Reggefiber for a total of EUR 877m once ACM approves.
The ACM process:
  • Despite the initital approval by OPTA + NMa (now ACM), going to full control (60%) once again requires ACM approval.
  • ACM reportedly pushes its judgement beyond the EC's judgement on the Ziggo/UPC merger. The latter had a Oct. 17 2014 deadline, but this is pushed back for an unknown period of time. Further, ACM plans its market assessments for regulation until 2018.
  • It is now questionable if ACM can delay its judgement of the full Reggefiber takeover for much longer.
Considerations for ACM:
  • As with Ziggo/UPC, one might primarily expect approval. Not much changes, after all. But looking a bit deeper, reveals that changes may be coming.
  • Originally, KPN acknowledged that FTTH was clearly on its roadmap, with DSL technologies (VDSL, bonding, vectoring) for the interim. Moreover, the open access Reggefiber network enables competition, both from unbundlers (ODF access) and resellers (layer 3). This is all changing now.
  • Recently, KPN decided to:
    • Slow down the FTTH roll-out (see above).
    • Abandon the FTTH USPs (gigabit, symmetry), in order to market broadband and triple plays nationwide, independent of the access network.
      • Despite the clear benefits for ARPU.
      • And despite the fact that years of investments in VDSL (since 2009) haven't delivered yet. DSL net additions are still solidly negative. BB growth is clearly in FTTH.
    • Move focus to VDSL. But it has clear disadvantages:
      • KPN never discloses the capex cost per HP, which are not just a fraction of FTTH capex. Apparently, the true cost of VDSL could be several hundred EUR/HP. The topology is entirely different from what Reggefiber is doing, so there is no re-use of VDSL assets (including inner rings and outer rings).
      • Vectoring is still largely unproven.
      • Performance dropps off sharply at distances larger than 100 meters or so.
      • We all know that "up to 100 Mb/s" really means: "don't expect anything better than 50 Mb/s".
    • As we feared, there are now rumours of KPN switching to GPON technologies on FTTH networks. This means: a shared network (like cable and cellular), slower speeds, no open access. And yes, perhaps a few percent savings per HP.

What does all this suggest:
  • Taking over Reggefiber wasn't about overbuilding with FTTH. With hindsight, is was all about taking out a dangerous newcomer.
  • KPN turns out to be a copper company after all, just like incumbents in surrounding countries (Germany, Belgium, UK). The Netherlands are set to drop in international fiber rankings.
  • Reggefiber was hard to push to include rural areas, imagine what KPN intends to do (hint: LTE).
  • KPN appears to be steering toward a cozy duopoly with New Ziggo - each minimising capex and maximising dividends. Unbundling will become a thing of the past and resellers will be marginalised - unless ACM steps in.
  • This creates opportunities for full fiber companies such as seen in the UK (B4RN, CityFibre, Gigaclear, Hyperoptic).
  • Indeed, Google Fiber! It wanted to work with CityFibre in the UK, but the latter didn't want to give up its plans with Sky and TalkTalk. Google Fiber walked away and could very well be looking at the Netherlands, Belgium and Germany right now.
  • Rumor has it that there is a gentlemen's agreement with Reggeborgh that precludes Reggeborgh's return to the Dutch market as a newcomer on the FTTH market. With a fresh EUR 877m it could clearly do so. Instead, Reggeborgh now focuses on Germany (Deutsche Glasfaser) and (as is rumoured) Belgium.

at 11:24 am 0 comments
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Monday, December 14, 2009

Will KPN pull out a wild card?

It's the time of year to make predictions. On December 15, KPN is set to clarify its FTTx Roadmap, but it doesn't look like there will be any fireworks. Here are a few possible outcomes that don't seem to be on anybody's cards:
  • MAYBE they will accelarete FTTH. That would be a u-turn to previous statements, and construction capacity (currently at an annual run rate of 250k homes per annum) doesn't have much room to grow.
  • MAYBE they will bet the farm on VDSL2. It is what they have announced, but it could be more than just an interim strategy (in theory).
  • MAYBE have an acquisition to report. BBned is for sale and would add a handsome business provider (the wholesale provider would lose all its customers no doubt, and the retail business may have to be sold on). Still, they could replace BBned on a couple of FTTH networks.
  • MAYBE they have a retail partnership to report. Perhaps Online Breedband is finally ready to live up to its promises (made in April). Or Tele2. But the real big fish would be Ziggo. Imagine Ziggo becoming an operator/RSP on the Reggefiber FTTH networks! (UPC would be a harder nut to crack - they suffer from a severe case of incumbofobia).
  • MAYBE they have a content deal up their sleeve. Connected TV is all the rage. This would enhance the triple play.
UPDATE But the biggest surprise would be:
  • MAYBE there will be a switch to GPON technology (in the larger cities), in order to be able to re-use VDSL investments.

at 2:06 am 0 comments
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Wednesday, December 09, 2009

KPN to shed light on its FTTH/FTTC network mix

KPN's (in)famous 2x5 evalution of FTTC (+ VDSL2) and FTTH, in 5 towns each, is drawing to a close. Next Tuesday will see a statement form Baptiest Coopmans, board member for the consumer market. I have prepared a short report (KPN's FTTx Roadmap) containing all the different considerations that KPN must be weighing (see also in the right hand column).

No doubt an unexciting mix will be announced, but there are two important questions to ask: what is KPN's long-term view of VDSL; and how seriously is it committed to FTTH?

at 12:16 pm 0 comments
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Saturday, September 19, 2009

WBA and innovation at the center of FTTH developments

We had our first FTTH NL conference last Thursday, and I am happy to say that it was a big success. We will likely put on a second edition next September. You can still find the program here (and for those of you who attended, you can download the presentations).

There was a clear distinction between those who looked at FTTH indepth by the nature of their business (Reggefiber, Emtelle, FTTH Council), and those who followed the latest mantra (it's not about the network, it's about the services) - taken one step further by KPN who claim that it's not about services either - it's about whatever you can imagine you want to do with it.

At the same time, three out of a total of eleven speakers had to do their utmost to make a connection to FTTH. But this provided the topic with extremely valuable context and perspective.
  • Tele2 NL, focusing on VDSL2 for now, but an FTTH trial wil be conducted in 2010. And: it was acknowledged that VDSL2 is an interim strategy.
  • UPC, FTTH's nemesis, however had an interesting quote: "Should we need to do FTTH in 10, 20 or 30 years, we will."
  • Ams-IX doesn't directly feel the effect of FTTH, because uptake is a very gradual process. Interestingly, community services (local traffic kept on-net and hence off the Internet) will grow its share of total traffic.
Our regulatory session (with Opta and a lawyer for alternative operators) focused on WBA. Opta has chosen not to regulate this service (the bitstream wholesale service that ISPs buy from operators) in order to stimulate newcomers to become an operator themselves. Opta claims that this worked well in the DSL world. I cannot quite see this - it's a stagnant market with just three unbundlers, and in an FTTH context it still isn't flying yet. Our Bird & Bird lawyer drew the obvious conclusion: we need WBA regulation in order to allow newcomers to enter the market. It is the first step on the ladder of investment. Once they have gained a market presence, they can move on and become an operator.
One thing he also pointed to was equal time-to-market, which isn't satisfactorily regulated at this point for ODF access (wholesale service bought by operators from the network owner).
On the whole however he did identify a certain 'investment run', with Reggefiber kickstarting the market, KPN buying into it and now Tele2 doing VDSL and cablecos doing Docsis 3.0.

Rabobank's Henk Doorenspleet had a very smooth and appealing presentation. He appeared to be quite worried over government funding, because he quite directly notices that this is preventing private financiers to enter the market.

Personally, I was happy to see a favorite topic of mine being taken up several times: where does innovation arise?
  • At the active layer? This is the traditional ISP view, who feel they need to unbundle copper of fiber. So they need to be an operator. However, there is only limited (economic) space in each PoP to justify this model for more than 2 or 3 players.
  • At the services layer, but on-net? This is the view of Genexis. It has a drawback: WBA isn't regulated. So what you see now is that KPN and cablecos are starting to make innovation happen themselves and seem to be trying to keep RSP's out of the market.
  • At the services layer, but OTT? This is the Google, Skype, iTunes model. A lack of QoS and security is a drawback, that is however pushed to the background by network upgrades and the rise of CDN's.
Any suggestions, ideas, views here?

at 11:52 am 0 comments
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Thursday, September 10, 2009

ECI Telecom trials DSM L3

Short follow-up on this post (DSM increase's xDSL's reach). DSM L3 is trialed by ECI Telecom at 3 European telcos to extend the reach and performance of VDSL. This could be a way to deploy VDSL2 from the Central Office, where existing ADSL2+ DSLAMs can simply be replaced, instead of from the cabinet. Effectively, with DSM you don't need to do FTTC to extend fiber from the CO to the cabinet.

The strategy pits Tele2 (VDSL2 from the CO) against KPN (VDSL2 from the street cabinet). Tele2 obviously has a much cheaper strategy and can truely regard it a solid interim strategy before starting to unbundle FTTH.

at 12:16 pm 0 comments
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Tuesday, March 10, 2009

Telstra gears up HFC against the NBN

Telstra is launching the roll-out of DOCSIS 3.0 on its five city HFC network. They are targeting 100 Mb/s to 1m homes in Melbourne by Christmas and claim it is upgradeable to 200 Mb/s. Total spend in 2009: AUD 300m.

Some remarks:
  • Apparently, this is the way forward for Telstra competing the NBN, which will have a winner by the end of the month. Looks like Telstra is definitely not going to be it. And if it will get involved after all, horizontal separation (spinning off of BigPond) should be next.
  • Let's not forget about the inherent limitations of HFC networks: highly asymmetrical (limited upstream spectrum and no gear available); unbundling is ruled out (from a technical perspective); not quite as much bandwidth (compared to FTTH), to be shared by quite a few more homes (compared to FTTH).
  • The HFC network and the future NBN (FTTN + VDSL) will be on a par, especially since a VDSL-network is tough to unbundle too (but from an economic perspective). However, the next logical step (FTTH) is pushed into the distant future by this development (unless Axia or Acacia wins the NBN tender). That will not be good for Australia on , say, a 5 year timeframe.
  • Interesting: "... infrastructure that complements our world-leading Next G mobile broadband network." (Not the other way around.)
  • No vendors mentioned (Cisco? Motorola?).

at 9:36 am 0 comments
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Monday, March 02, 2009

FTTH beats DOCSIS beats VDSL

Comparisons of FTTH and DOCSIS usually aren't very thorough. So I got some industry intel to help me better understand the differences. Here's a first shot at providing a better comparison.

The conclusion could be that FTTH is superior, but upgraded HFC networks will go a long way. Telco incumbents have a choice: sweat the copper plant (some running into a huge problem because VDSL doesn't handle analogue TV very well); or leapfrog cable and swallow the capex pill.

Shared bandwidth
Fiber guys usually point to the fact that cable is a shared medium. Well, alas, all networks are shared. The real question is: how much bandwidth is shared among how many subscribers? Verizon answered that question recently for its FiOS network. And that's 'just' a PON network! In other words, fiber beats cable, but it is shared as well.

Symmetrical speeds
Fiber guys also tout the fact that FTTH enables symmetrical connections, and the cable guy usually retorts that DOCSIS can do that too. I'm not sure how it is in other countries, but in the Netherlands the fiber guy is 'more right' than the cable guy. Coaxial networks offer a full spectrum of some 862 MHz, which would deliver several Gb/s if it was all used for broadband (DOCSIS). Alas, most is reserved for cable TV (see below: cable TV v. IPTV). Moreover, only the bottom 60 MHz is reserved for upstream, and so upload speeds are constricted.
Even if cable operators decided to go symmetrical, it would require a large capex and opex bill. Moreover, symmetrical gear is hardly available.
Further, a quick calculation, assuming 30 TV channels (occupying 8 MHz each) leaves the equivalent of some 45 channels for DOCSIS, or around 1.8 Gb/s (shared!).

Cable TV v. IPTV
Cable TV is like pushing all TV channels all the time onto the subscriber's premises. Copper could never handle anything like that, so IPTV was invented, delivering only the channel that is being watched. It is a complicated technology and certainly in the Netherlands, analogue TV (the standard line-up of some 30 channels) sells particularly well because it doesn't require any STBs. The signal can easily be split by the subscriber, usually even without an amplifier, to service multiple TV sets in the home. Digital TV needs an STB, which is a major inhibitor in box-fobic countries such as the Netherlands. (It must be said however that people are getting used to them, because cable, DTT (Digitenne) and sat TV push them to consumers. Still, each TV set needs one, and usualy they are not all free.)
Further, cable has SDV technology to mimic IPTV, and free-up spectrum, but it looks like analogue TV is a must-have for cable, even if it were just for the profit: the total rights bill is some 2 EUR/mo/sub, whereas the retail price is around 15 EUR/mo/sub. Which is interesting for several reasons: 1. cable operators are saying that they want to switch it off; 2. Opta is preparing regulation for open access to cable TV; and 3. FTTH-networks have learned that they need to offer analogue TV (over a separate fiber!) to stand a chance of winning subscribers.

Latency
Apparently, both FTTH and DOCSIS score verry well, normally, even if FTTH is a little better (c. 1 ms).

Loop length
FTTH will work over 10 km without needing any equipment, whereas a cable network requires an amplifier no further than just 100 meters away from the subscriber. However, cable networks have had their VDSL-like upgrade long ago, pushing fiber quite deep into the networks. In the Netherlands: from Headend to Distribution Nodes and further down to the Fiber Nodes. From there coaxial cable takes over, first to a Group Amplifier, and (via a handful of amplifiers) on to a Final Amplifier and then to the subscriber's homes. On average, some 1500 homes are connected to a Fiber Node (over coax and 5-7 amplifiers).

Optical/electrical
The farther fiber is pushed, the farther weigh the benefits. FTTH is superior in that sense (see before: Loop length). The optical signal is only converted to an electrical signal in the subscriber's home. That's nice for FTTH operators, reducing their electric bill, but naturally it adds to the subscriber's electricity bill. Also, the overall electric bill is higher in FTTH networks for being less centralised.

Opex
Despite the electricity savings, opex differences apparently are small for FTTH and cable/DOCSIS. Take a look at this document.
at 11:34 pm 0 comments
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Monday, May 19, 2008

KPN: All-IP network not ready yet for large-scale FTTH

My source at a Dutch contractor tells me that KPN is preparing a large-scale FTTH roll-out. This could be new in so far that it is really large-scale, not just a town here and a business park there.
Originally, July 1 had been targeted, but the new All-IP backbone doesn't seem to be functioning as it should just yet. KPN doesn't want to go to market early, as it did with InternetPlusBellen (the ADSL/VoIP double play), which caused several tens of millions in 'damages'. Now, it is targeting January 1 2009 for the new FTTH program.
KPN is talking to a number of towns to get their cooperation. Not in any munifiber sense, but simply to get the paperwork (costly licenses for opening up sidewalks etc.) done more quickly and possibly at a lower rate.

I think KPN is timing the (rumoured) roll-out very well. It has been fibering up greenfields and business locations and it openly talked about the FTTH end game. The market must be prepared by now for more cash going into a future proof network.
Also, KPN can forgo VDSL investments, which are very distance dependent for proper service and would probably have a short life anyway. At the same time, FTTH will bring large opex savings (Verizon touts an 80% reduction for FiOS versus copper). Finally, the three-way cable merger of Casema, @Home/Kabelcom and Multikabel into Ziggo (formerly Zesko; owned by Cinven and Warburg Pincus) just launched. They seem to be pretty cash-strapped. In 2007 they had pro forma revenues of EUR 1,141m and an EBITDA of EUR 594m. Total debt is EUR 5.36bn and the interest expense was EUR 445m. The net result was negative EUR 265m. In other words, now is the time for KPN to leap forward.

To round off, Dick Wessels reportedly is eyeing a 7-year timeframe for expanding his Reggefiber empire (open access FTTH networks in several towns), before selling out.
at 9:09 pm 0 comments
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Wednesday, March 12, 2008

Reader feedback loop: FTTH and more

Over the past few days I spoke/mailed with a number of 'industry leaders'. In some cases the most interesting things came up in a sideline. Here is what I have to share, with more to come next week.

1. Ed Achterberg of Telecompaper.com

His outfit is growing, both internationally and 'up the value chain'. Telecompaper already is the preferred partner of most Dutch operators and providers (and many more) for news, market research (including surveys) and analytics (including services). Now, they are adding commentary, research and who knows where they will be in 5 years time.
(Sounds like a takeover candidate for Informa or Wolters Kluwer, but that is another matter.)
Two items stood out:
  • VDSL. KPN seems to be skipping this technology and may move into FTTH on a larger scale. Good news for us FTTH aficionados, even if I was reminded of Philip Rogge (of Belgacom, which did roll out VDSL on a large scale), who said that you may need VDSL as an intermediary solution as FTTH may take a long time to roll out.
  • Mobile broadband. Ed views this as an ever more (HSPA+) viable DSL/cable replacement. In his monthly magazine he acknowledges that "it won't do for daily YouTube consumption", which makes me a big skeptic. Still, my 85 year old mother could be convinced - all she does is basic email.

2. Marcel Jansink of Wavin

After this post on Wavin's ducts he agreed to let me take a look (next week) at the cost model that TNO developed for FTTH deployments.

3. Serial entrepreneur John Goedegebuure

He called after reading this post on his Daily Media box. Next week we will meet (together with UCD CEO Hennie Meijndert) to talk more about the (28!) very open business models.

  • He hinted at the upcoming availability of a DTT-ready version of his Daily Media box, which would make KPN a serious potential partner - just as I 'predicted'. And BT as well, because BT's Philips-box has a Freeview connection (but a different business model).
  • Besides KPN, the MSOs and Reggefiber, John suspects there may be a #4 FTTH market participant in the Netherlands: Rabobank. Through their Bouwfonds venture they are buying an MSO and are supposed to have hundreds of millions available for telecom infrastructure projects. Remember that Rabobank is no stranger to telecoms: they were an original investor in Dutchtone (then Orange, now to be integrated into T-Mobile).

4. Stefan Stanislawski of Ventura Team

His group produced an FTTH usage study for the FTTH Council Europe. A must read.


at 12:06 pm 0 comments
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Tuesday, November 13, 2007

KPN: away from network ownership and toward FTTH

Today I had the honor to meet with Joost Farwerck, director of Wholesale and Operations at KPN. Most striking were unequivocal belief in FTTH ('the endgame', as I have referred to it before) and an apparent decline in interest in being a network operator.
Joost very tellingly was able to see me in between a trip to Australia and New Zealand and a meeting with bbned (Telecom Italia).

Here are my edited notes.

1. All-IP
  • KPN is planning the migration to an NGN, as I have written about before. Many MDF locations, LLU and ADSL2+ will be phased out and replaced by SDF locations, SLU and VDSL2. Fiber will be pushed deeper into the network, to reach all the way to 28k street cabinets (FTTC) and bypassing 1300 MDF locations. No FTTH as yet, only in greenfields and selected towns (Enschede and Almere).
  • Currently, details of an MoU are worked out. The MoU was signed over the summer by both KPN and the main unbundlers (bbned, Tele2 and Orange). The new agreement is to be published around December 15. The details are about phasing out the MDF locations, the migration and KPN will present an alternative to line sharing (this product is on the way out anyway, as it is replaced by full LLU). Apparently, street cabinets offer enough space for SLU. Bbned is going the way of SLU.

2. Network operator v. service operator
  • KPN believes WBA (wholesale broadband access) is a good product that will ensure competition, based on equivalent access.
  • Joost seems to think that OPTA nor the new EU regulations, will lead to functional separation. I think KPN is a case in point where proper accounting separation and a good wholesale strategy + portfolio can fend off functional separation.
  • By the way, accordin g to Joost, a wholesale customer can be more valuable than a low-end retail client.
  • Outsourcing is becoming a major part of KPN's strategy. At Joost's division up to 50% of current employment levels will disappear.
  • Joost seems to be much more of a services man than a network operator. I have noticed this before at both Tiscali and Telecom New Zealand. Network control is less important in a regulated all-IP world.

3. Co-op
  • I am a big fan of cooperation. So is Joost, but challengers seem to think differently. KPN tried to team with Tele2/Versatel several years ago, but was turned down. Also, unbundlers are sub-scale in many cases, but (foreign) owners appear to be 'believers', as Joost put is. They all seem to think that they can make it work on their own. Too bad that there are few G9 (Australia) type of intitiatives.
  • Joost seems to be similarly at a loss when it comes to long-term commitment of the large Dutch unbundlers. Tele2 is selling off many assets; T-Mobile may sell on the Orange BB unit; Telecom Italia may get rid of bbned.

4. FTTH
  • "FTTH is the endgame". I couldn't agree more.
  • However, VDSL gets deployed 5-7 times faster (and is written-off in 3-4 years), so it cannot be skipped. Here Joost is very much on the same track as Belgacom.
  • KPN recently teamed with 'public enemy #1', Reggefiber, for the city of Almere. Joost told me they will own the passive infrastructure together (I was under the impression it would be 100% Reggefiber); KPN will serve as network operator; KPN (and others, if they wish) will be service provider.
  • KPN beefed up its Belgian mobile operator by acquiring Tele2 Belgium. That obviously begs the question: will E-Plus make a similar move in Germany? Joost seems to see better business opportunities for some German expansion (out of the Netherlands), e.g. to the Ruhr area, than for doing FTTH in some rural Dutch areas.

at 10:26 pm 0 comments
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Thursday, September 06, 2007

How to prepare the investment community for FTTH

Yesterday I met with an executive of a leading European telco. He invited me to exchange views. For me, these are always excellent opportunities for some reality checking.
FTTH once more demanded most of our attention. As I see it, telcos are trying to pursuade the investment community to get to grips with it.
Below are my take-aways.


1. VDSL
My companion strongly believes in the viability of VDSL, mainly because FTTH embodies a difficult business case, but also because FTTH simply cannot be rolled-out quickly enough.

Being a member of the Smiling Fiber gang, I of course have no doubts as to the demand side of the equation. FTTH is the end game. Moreover, a back-of-the-envelope calculation shows that you need at least something like 30 Mbps in the mid term (to support several HD TV sets, BB and voice). In order to guarantee this kind of bandwidth, you really need peak performances of around 100 Mbps. QED. (Buffering a few seconds will also go a long way in raising QoS.)

As to the roll-out speed, I suppose telcos do have a point when they install VDSL – for the interim. Look at Verizon: most of the FiOS assets are built in greenfieldish places, which leaves the company extremely vulnerable in places like Manhattan, where Cablevison (Optimum) et al are upgrading. Who knows how many years before Verizon starts digging up those streets of Manhattan (the potholes could come in handy).


2. FTTH
As I have noted before, no matter what telcos say in public, they are all aware of the necessity to move to FTTH, even if this may be some years away.

Public telcos are very much aware of investor focus on FCF and concern over FTTH. However, I see them working on multiple fronts subtly preparing the investment community for the big leap into fiber. PR-related strategies include:

  • Stress the reality of fiber today. Thousands of miles are fiberized already, ‘only’ the local loop remains.
  • Talk about greenfields. Both KPN and BT say they will roll-out to new boroughs. Now I happen to live in a big new housing development area (no crisis here), but what I have is … copper. A friend of mine who has recently moved into this area (see Map to the right) hasn’t had her home connected yet, but I am pretty sure it will be copper. In other words, committing to greenfields must be taken with a grain of salt but it is great PR.
  • Acknowledge the benefits. Capex may be high, but opex will drop dramatically. And superior services can be delivered.
  • Point to international developments. Not only PTT-like companies (Verizon, NTT, KT, Telekom Slovenije), but altnets as well (Iliad, Neuf Cegetel, SoftBank, Orange Slovensko), and even MSOs (Numericable, a Japanese co-op).
  • Drive the costs down. Verizon publishes decreasing costs for both passing and connecting homes, benefitting from its scale. Mergers will generate some economies of scale. Further, choose point-to-multipoint (sharing a fiber strand) PON technology (however, sharing fiber up to the OLT location may not be sufficient in the longer term, so you may prefer active ethernet over dedicated fiber all the way to the ONT). Also, make sure you have a sound in-home strategy ready, in order to avoid a costly addition to your opex. There is a variety of wired (HomePNA, MoCA, HomePlug for using copper, coax, PLC) and wireless (WiFi 802.11n Draft 2.0, WiMedia UWB) standards available.
  • Try to get state subsidies. This strategy worked well in Korea. Point to the economic and social benefits of a FTTH network.
  • Wait until greenfield (and other) FTTH build-outs represent let’s say 5% of your access lines. That will be the time to say: “We are at 5% already, and these homes have double the ARPU and a tenth of the churn of the copper base. And you didn’t even see our FCF suffer!”


3. Separation
We disagreed over the issue of investment incentives. Conventional wisdom is that full separation is, if not unnecessary, expensive and bad for network investments. It is supposed to take away any incentive for the NetCo to invest.

Personally, I do not quite see this. In my view, the NetCo would do wise by investing for the long term, enabling it to offer an extensive portfolio to its (wholesale) customers. Of course, there are the usual investment uncertainties; who could guarantee take-up of your shiny services? But I believe this can be dealt with. There are many new services waiting to be (built or) expanded, including monitoring, eHealth, video telephony, home access to corporate VPNs, etc.


4. Consolidation
We briefly spoke about KPN, and its Telfort, Getronics and Tele2 Belgium deals.

After our meeting was over, I got the idea for the perfect answer for Belgacom. If KPN are not stearing toward a merger with their Belgian counterpart and instead go for head-to-head competition, why not make some acquisitions in Holland? (Not unlike Swisscom buying FastWeb).
Tele2 seems to be committed to the Netherlands (a large scale ad campaign has started in relation to its 10th anniversary), DT is buying Orange NL (but may sell-on the former Wanadoo LLU assets to Tele2, bbned, Scarlet or Vodafone) and even bbned (Telecom Italia) is here to stay (it has just started a campaign for the Alice brand, which is new to Holland).
So what is left? Reggefiber! Perhaps Dik Wessels is ready to sell out of this FTTH vehicle, and with Belgacom funding roll-out could be accelerated. Reggefiber appears to be a very disciplined company, which is making a success out of FTTH. In addition, it would be a nice testing ground for Belgacom.


at 10:54 am 0 comments
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Tuesday, July 17, 2007

Co-op gaining momentum

German alternative network operators, both wholesale (Vodafone's Arcor, Telefonica Deutschland) and integrated players (Versatel, Telecom Italia's Hansenet) are planning to jointly build a VDSL network.

This underscores a trend gaining considerable momentum: co-operation to better compete with the incumbent.

Comparable events:
  • Australia's G9 and Telenor's Swedish operation have similar plans.
  • Neuf Cegetel recently said it expected consolidation (FTTH).
  • In Nigeria 25 ISPs plan a joint WFi network.
  • SoftBank en eMobile plan a joint offer for a WiMAX license in Japan.

at 3:21 pm 0 comments
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Wednesday, June 27, 2007

FTTH is the endgame (but it will take a while)

Yesterday I attended the 'Next Generation Network Conference', hosted by Euromoney's Global Telecoms Business, in Amsterdam. Thanks for inviting me!
It was an interesting day, even if there wasn't so much really new. I enjoyed talking to telco and vendor officials, most notably Dirk 'Amsterdam' van der Woude.
Below I will summarize my take of the views on a number of trends (which I regularly write about on this blog):
  • FTTH, VDSL/LLU/regulation 2.0, Web 2.0, SaaS, WIMAX
  • Separation, co-op
  • Owning the customer, advertising as a business model
Companies and organisations represented included:
  • KPN, BT, Vodafone, Orange NL, Thus, 2 smaller Dutch MSOs (CAIW and Kabel Noord)
  • Xconnect, Alcatel-Lucent, BroadSoft, Sonus, AlwaysON
  • OPTA (the Dutch NRA)
  • Analysys, Fitch

1. Demand

The perennial question: will 10 Mbps be enough? or 100 Mbps? Some statements (not precise quotations) included:
  • There is no ceiling (KPN),
  • even if the new services are as yet unspecified (Analysys).
  • Why should the exponential increase stop now(BT)?
My comment:
  • KPN, through Nico Baken (senior strategist and professor at Delft University), proved to be among the most radical. By the way, when I asked Nico how he feels about KPN's current strategy, he responded somewhat in this manner: KPN is among the most respected telcos, and they allowed me to hire 12 PhD's to work on long-term strategies, in order to allow KPN to maintain its lead. Bravo Eelco Blok for gathering this team at the heart of KPN!

2. FTTH, NGA (access)

Statements included:
  • We see no business case, except for greenfield operations (BT).
  • FTTH is the endgame (OPTA, KPN).
  • Build-outs in the Netherlands (7.0m households) are projected to go from 115k at present to 580k by 2009.
  • Public/private partnerships (PPP) will emerge (KPN).
  • Wireless will be the way to connect over the 'last few meters' (KPN).
  • Within a few years, all munifiber in the Netherlands will be bought by either KPN or Cablecos (CAIW).
  • 2 Infrastructures (copper/telco and coax/cableco) are not enough to ensure real competition (OPTA).

My comments here:

  • KPN's Nico Baken was probably among the most impressive in his presentation. His visionary analysis underscores that KPN fundamentally believes in FTTH - as well as PPP!
  • Dirk pointed me to a new development: KPN plans to connect 11k homes in the eastern town of Enschede and eventually the entire city (155k inhabitants) will be covered. "We will try to convince any doubters that copper access is not sufficient in tomorrow's world." I suspect that OPTA's 580k number (see above) does not include Enschede, which would take the number up to 735k. By the way, Dirk added a new overview (as of June) of fiber developments to the Citynet site.
  • There was surprisingly little on VDSL. I feel that everybody present believes in FTTH, which makes VDSL a transitory if not outmoded technology before it is even launched.
  • OPTA's acknowledgement of FTTH as the endgame is positive (in fact, it was aired before, most recently last week), but saying that 'two is not enough' is puzzling (to put it mildly). I would say: all we need is one (FTTH), which needs to be regulated. I feel that OPTA regards LLU and even bitstream access as a separate infrastructure.
  • Now, if even KPN feels that PPP is the way to go, separation makes more and more sense to me. How about separating both the telco (KPN) and cableco ('Zesco') networks - which I feel could stimulate the two new network companies to build a nationwide FTTH network through some PPP/joint venture (with Reggefiber).

3. NGN (core)

Statements:

  • The 21CN project started out as a cost savings measure, but grew into a complete business transformation (BT).
  • We offer NGN as part of our 'Business Transformation Partner' offering (Alca-Lu).
  • NGN implies cost savings, but at first a 'hump' will appear in capex and opex spend (Alca-Lu, BT). BT sees costs at a low in 2013, when the hump is coming to an end and normal growth is resumed (at a level less than half of what it is now).
  • BT established BT 21C Global Venture as a way to leverage its know-how that it is acquiring, doing the 21CN project (BT).
  • Apart from cost savings, NGN is all about new services (BT, Alca-Lu) for which SOA must be adopted (BT).
  • Telecom New Zealand wants to be a service provider and is less interested in being a network operator (Alca-Lu).
  • Altnets lack scale for NGN projects (Orange NL).

My comments:

  • SOA and SaaS will be recurring themes for telcos,
  • As well as separation. One could say that separation (and Saas) are ways of taking outsourcing to the extreme.
  • I wonder how the BT 21C Global venture fits into the IT services market. Do they have customers yet?
  • I will pound on one of my favorite subjects once more: why on earth do we see so few co-ops?

4. New services

Statements:

  • Future services will include HDTV, social networking, software apps and Web 2.0. Many may not be really new but subsititutes. "New services are as yet unspecified", and business models are unclear (Analysys).
  • Many new services, such as triple play, aren't really new. Blending however (like on-screen caller notification) is what we will be seeing a lot of (Alca-Lu).
  • In offering IPTV, we focus on interactivity, not on exclusive content. We will offer "what is relevant for our customers" (KPN).
  • We aim at personalisation (Vodafone).
  • Data may actually make up for much of mobile growth decline, but IPTV will not do the same for fixed operators (Fitch).
  • "The customer experience needs vast improvement." (Fitch)

My comments:

  • Somebody mentioned that it is all about "owning the customer". I couldn't agree more. That is also why I question KPN's representation of WLR, which I believe distorts their net line loss numbers. Sure, WLR still adds to wholesale revenues, but the customer relationship is gone.
  • I wasn't terribly impressed with KPN's IPTV ('Mine') presentation. The service will be (re)launched after the summer, but not as a premium service anymore. The UI didn't look very fancy. The feedback they had so far (the low key launch was done in May 2006) must be a long shot at what they overambitiously describe as "what is relevant for our customers".
  • Blending sounds like mash-ups, in Web 2.0 terms.
  • Selling to Google or KPN is one business model, and otherwise it seems to be advertising. Sure, budgets move online and can be targeted a lot better, but in the end online advertising will prove to be a cyclical market. The Broadband Incentive Problem kind of raises the same issue: in the long run, things need to be paid for, preferably in a usage based (not flat-fee) model.

5. Other

  • I spoke to Orange NL and other people, who all seem to believe that T-Mobile will not dispose of the Wanadoo BB unit of Orange NL, once the acquisition is worked out. I always assumed that T-Mobile would be a mobile-only play (outside their home markets in Germany and Eastern Europe) in the US, the Netherlands, Austria, the Czech Republic. But who knows they will embrace the convergence story.
  • On the side, if T-Mobile do embrace a convergence model, selling T-Mobile USA must come into play again (remember the cablecos work with Sprint and the satellite companies teamed with Clearwire, so teaming with a fixed or WiMAX operator seems hard).
  • I am getting pretty fed up with people saying that the end user is not interested in technology - to the point that I start to feel that people are increasingly familiar with alphabet soup.
  • On the side, WiMAX was touted by someone in the audience as a technology capable of bypassing cellular networks in large cities. I do not wish to be overskeptical about new technologies, but I think we have to be realistic. It is an emerging technology, especially 16e (there are many 16d deployments underway, including Vodafone's Malta plans). Handset range will be a major issue. At first, the technology was supposed to deliver 70-120 Mbps over a distance of 50 km. Now, 16d seems to deliver perhaps 10 Mbps over 5 km (in a NLOS situation). Imagine what the performance will be for 16e, assuming the kind of usage we see in cellular networks today. And then I haven't mentioned building the network, from construction, backhaul and interconnect up to marketing ...
  • Not to end on a sour note: Xconnect is a very interesting story. Peering is a whole new way of saving costs (and enabling new services). In fact, it is like OTC trading. Actually, I included peering in my own overview of efficiency measures (including such seemingly unrelated things like DWDM, CDN, P2P, MPEG-4 and AJAX) at my Tiscali Wholesale presentation two weeks ago. Mail me for that presentation.

at 8:53 am 0 comments
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Tuesday, May 22, 2007

Australia and Sweden may lead the way

Alternative operators and ISPs have a hard time fighting the incumbent. Why not get together?

Now, Australia and Sweden could pull the industry into a new phase:
  • The Australian G9 consortium has proposed to build a FTTN network with Telstra.
  • Telenor is trying to convince Telia, as well as Tele2, to cooperate on a VDSL2 network.

Somehow, market participants and regulators must come to balance the interests of each:

  • Incumbents may prefer to go it alone, in order to force altnets to 'follow or die'. Still, there may be budget restraints, especially when FTTN/VDSL networks are regarded intermediate stages toward FTTH.
  • Altnets lack scale on an individual basis. Also, in most cases they are backed by competitors. The Swedish example could be a way out: work together on a country-by-country basis.
  • As the G9 put it, only a single FTTN network is economically viable. As regulators and operators alike prefer facilities-based competition, the competitive element will have to move up and away from the physical (passive) layer.

Sweden and Australia may lead the way. The next step could be to separate the cooperatively built network. This way, a (natural) monopoly would arise and competition would be focused on delivering superior services.


at 3:45 pm 0 comments
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Wednesday, April 11, 2007

Telecom Italia starts SLU trial in the Netherlands

Telecompaper reports that bbned, the Dutch wholesale internetprovider owned by Telecom Italia, is starting a VDSL trial in three Dutch towns in the Amsterdam area. For now, it appears to be a technical trial.
The infrastructure exists of fiber connected street cabinets, in which bbned installed VDSL gear. In other words, it uses SLU (sub-loop unbundling), instead of the more traditional LLU (running from MDF locations).
InterNLnet and SURFnet will retail the service. Speeds are 40/10 Mbps.
Bbned is also involved in munifiber projects.

Some remarks:
  • As KPN is planning and building it's All-IP network (including nationwide FttExchange + VDSL2 by 2010), bbned appears to be the most committed altnet. This comes as no surprise. Orange (which denied being for sale, much like bbned itself) and Tiscali NL (which will be bought by KPN if the competition regulator NMa allows it) are on the sidelines. Tele2/Versatel is committed as well.
  • When it comes to VDSL services, bbned is actually beating KPN. KPN is targeting a May launch, which is questionable now that the telecoms regulator OPTA is reviewing the All-IP plan and the market's response to it (due June). However, a bbned launch could support the case for an early KPN launch, as this shows that SLU is viable after all.
  • Talking of which; Analysys produced a report which all but ruled out SLU conducted by altnets for lack of scale. In other words, as LLU becomes unavailable (when KPN closes and sells MDF locations), SLU may be realistic after all. This will make matters much easier for OPTA, which has to come up with an alternative to LLU.

at 10:42 am 0 comments
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Tuesday, March 06, 2007

Regulation 2.0 coming to Ireland

Battling cable, eircom apparently has similar plans to KPN: pushing fiber deeper into its network (to street cabinets), going from FttExchange + ADSL2+ (with LLU as an option) to FttCabinet + VDSL (with SLU as a theoretical option), thereby:
  • creating the option of closing COs, savings costs;
  • moving DSLAMs closer to end users, expanding available bandwidths;
  • frustrating altnets who have DSLAMs in those COs as well but lack the scale to move them to the street cabinet level, making SLU unfeasible;
  • forcing regulators to come up with some other alternative to LLU.

We have seen this in the Netherlands, and now it is spreading to Ireland. Watch out for regulation 2.0 coming to Europe in the next few years.


at 2:50 pm 2 comments
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Monday, January 29, 2007

POST-LLU REGULATION://What about VDSL and Openreach in the Netherlands?

Coming back to OPTA's timeline note (summarized before and here also) and publication of the Analysys study, I can add a few remarks after having talked with OPTA and KPN. OPTA was rather candid about acknowledging that this would not exactly be what KPN presumably likes to hear at this stage. It looks like OPTA is backtracking, having been a little bit too generous for KPN. They should have awaited Analysys and competitor responses.
  • OPTA will not enforce the Openreach model on KPN (to be announced mid February). This is what I 'read between the lines' talking to OPTA. There are two important factors behind this. Most of all, cable is hurting KPN much more than it (NTL/Virgin) does in the UK. In fact, it looks like there are only few countries where cable has this kind of strength (Belgium; Germany in due course, once the analogue/digital upgrade is done). In other words, only PTTs of Portugal and Spain et al could be at risk for having an Openreach kind of regulation. Second, KPN is mirroring Openreach as it is, judging its carrier portfolio (range of services and pricing).
  • Late February really is the 'date' to watch. By then, OPTA will come up with some sort of Fully-fledged Alternative for LLU. Personally, I have a lot of sympathy for the Australian model, where 9 altnets have come together. Other than that, the situation appears pretty much deadlocked.
  • KPN's official plan still is to launch VDSL services on May 1. Will OPTA block this?

at 9:41 am 0 comments
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