Document

Report
ENGAGE
HSB for Donegal
12 Feb 2013 • Pat Kidney
RefNo | Commercial in confidence
3
Trends in the Irish market
 Mobile and FWA broadband services have become a major
feature of Ireland’s broadband market
 Fixed broadband speeds have increased from their previously
low level
 Service bundling and closer integration of fixed and mobile
services are increasingly prominent features of the market
 All mobile operators are engaged in network sharing
 multi-band spectrum auction in 2012 has raised EUR 854m 140
MHz of prime sub-2GHz spectrum
 The 2.3 GHz and 3.5GHz spectrum bands has potential to further
enhance competition and capacity for wireless broadband
 National Broadband plan has earmaked EUR175m for broadband
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In the 2016 – 2018, a mix of technologies is
expected in the Irish telecoms market…
UPC will have DOCSIS3.0 in urban areas,
but may not reach 55% of pop.
Urban 55%
Rural 55-90% Final 10%
DOCSIS3.0
Eircom will use
VDSL for high
speed
broadband,
and will
maintain its
existing ADSL
services
outside urban
areas
LTE and ADSL2
to blue areas
(35% pop.)
VDSL
ADSL
LTE, DOCSIS3.0,
and VDSL to
green areas (55%
pop.)
LTE
Only LTE in red
areas (10% pop.)
In urban areas LTE
will have fibre
backhaul to ensure
high performance
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In rural and
remote areas the
LTE will have
microwave
backhaul to
reduce cost, at the
expense of
performance
A comprehensive NGA solution may use FTTH,
FTTC, cable, wireless and other technologies
Scenario 1: Fibre and wireless
NSS
Up to 90%
Cost of deployment by scenario
Nationwide
2,500
FTTH/GPON
2,380
FTTC
2,000
Wireless LTE
Scenario 2: Cable, fibre and wireless
NSS
Up to 90%
Nationwide
Cable
FTTH/GPON
EUR million
1,670
1,500
1,325
1,000
FTTC
500
Wireless LTE
Scenario 3: VDSL and wireless
0
NSS
Up to 90%
Nationwide
Fibre and
wireless
FTTC
Wireless LTE
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FTTH
Source: Analysys
Mason
FTTC
Cable, fibre
and wireless
LTE+fibre
VDSL and
wireless
LTE+microwave
6
The National Broadband Scheme brought basic
broadband to unserved areas of Donegal
Target area
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Source: DCENR, H3GI
Actual coverage
7
NGA is likely to be delivered through a variety
of fixed and wireless technologies
 NGA consists of many networks – including FTTH/FTTC, cable,
and 4G – but how much of each should be built and where?
Fibre networks
Wireless networks
FTTC and FTTH networks require the installation of new fibre
links from the local exchange directly to,
or closer to, the subscriber.
Optimal duct re-use can help reduce costs
In addition to wireless infrastructure costs, spectrum fees
can be expensive. To support next generation access
speeds many base stations may also require high-capacity
fibre backhaul links
Rely on direct physical connections to the subscriber – capital
expenditure generally increases in areas where access
distances are greater (typically rural areas)
Low-frequency spectrum from the Digital Dividend could
extend the reach of LTE base stations and consequently
reduce the capital costs of providing next-generation
wireless broadband in rural areas
A combination of extending the reach of fibre, plus additional
wireless sites will be required to satisfy our work and social
needs
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Why? ….dig costs make up around 65% of
total FTTH costs
Breakdown of costs of civil works for FTTH
100%
Proportion of dig costs for FTTH
90%
80%
to premise Final drop
~50m
from DP
70%
to DP
~300m
from cabinet
60%
50%
Route out of
to cabinet
exchange
from exchange
~2km
40%
30%
20%
10%
0%
Urban
Rural
Very rural
The part of the route closest to the distribution point
(DP) represents the highest proportion of costs
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Source: Analysys Mason
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Cost of implementation (EUR million)
We have analysed each measure from an
individual cost–benefit perspective …
0.01
0.1
In-building wiring
Mandated access to
infrastructure
Co-ordination of civil works
1
One-stop shop on
rights of way and
admin. procedures
10
Reduction to cable
damage could lead to
significant benefits
100
Performs most
strongly in a
cost–benefit
analysis, but
may have limited
impact in
developed
markets
Infrastructure atlas
1000
0
1
10
100
Magnitude of annual economic benefit (EUR million)
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Source: Analysys Mason
1000
10
Choice of investment model
5 investment models…
Bottom-up
Public
sector
owns and
operates a
network
without any
private
sector
assistance
Public
design build
and operate
Joint
venture
Ownership of the network is split
between the public and private
sector
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5 models
Group of end users oversee the
contract to build and operate
their own local network
Private
design build
and operate
Public
outsourcing
Managing
Authority
provides a
grant to
private sector
to assist in
deployment of
new network
Single contract for construction and
operation of network, but public sector
retains ownership and some control
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Choice of investment model
Each investment model has its place
Summary of pros and cons of investment models
Model
Advantages
Disadvantages
Recommended use
Bottom up
•
•
•
•
Targeting localised areas
Leveraging small scale
funding
Private DBO
•
•
•
Localised
deployments
Differing technologies
Funding threshold
Limited control
•
Sufficient funding to attract
operators
Effective transferral of risk
Public
outsourcing
•
Joint Venture
•
•
Public DBO
•
Long term, nonprofit view
Focuses demand
Larger scale
Low public burden
•
•
•
•
•
Public financial
stability with private
expertise
Greater control
•
Risk sharing
•
Potential conflicts of
interest
•
Public/private interests
closely aligned
Public organisation
has full control
•
Size and scope limited
by public expertise
•
Requirement for absolute
control
Inspirational investment
•
Reduced benefit to
private sector
Additional
bureaucracy
•
•
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Requirement for on-going
control
More conservative
operators
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The focus is on delivering benefit to users
 Socio economic benefit must be managed alongside project
sustainability to deliver long term benefits
Long term control by public sector can protect end user benefit,
however the private operators can bring invaluable expertise
Sustainability is critical as socio-economic benefits will take time
 The bottom up model may suit small scale fibre projects
Long term non-profit view of end users suits the fibre business
case, but this may be difficult to leverage on a large scale
 Open and non-discriminatory access to infrastructure supports
effective competition
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13
Contact details
Pat Kidney
Senior Manager
[email protected]
Analysys Mason Limited
Suite 242, The Capel Building
Mary's Abbey
Dublin 7, Ireland
Tel: +353 1 602 4755
Fax: +353 1 602 4777
www.analysysmason.com
Registered in Ireland IR304061
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