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Singapore Leads the Way for National Broadband Strategists

On October 1, 2008   /   Government, The Blog   /   Leave a comment

Strategy Singapore Leads the Way for National Broadband StrategistsWhen Singapore announced its national broadband strategy the world followed impatiently. Singapore Government required a structural separated passive infrastructure operator/developer (NetCo) and an operational separated operating company (OpCo) for its national broadband network infrastructure. Last week, Singapore hit another home-rum by awarding the passive infrastructure (RFP issued late 2007) to OpenNet Consortium which made a proposal far exceeding the minimum requirements of the bid.

There is a series of reasons why these developments are so exciting, especially these days that many countries (including the – so far – European pioneer Greece) are preparing similar nationwide initiatives:

  1. USO is taken seriously: Although the RFP required a 50% coverage by 2012 and Universal Service Obligation (USO) by 2015, OpenNet committed to 95% coverage by 2012 and universal service by 2013!
  2. Business demand will subsidize home user’s fiber connections: OpenNet proposal committed to an effective wholesale monthly price per fiber connection at $15 for residential and at $50 for non-residential users.
  3. Network operation is based on Open Access principles (as opposed to EC’s approach that infrastructure-based competition should be the end-game): Structural separated NetCo and operational separated OpCo are established. This means that [TYPO: a vertically integrated OpCo] NetCo will not be eligible to offer upper layer services over the national fiber infrastructure.
  4. Effective evaluation criteria: The attractiveness of business plan (i.e. prices, social & industry benefits), weighted a remarkable 43%, the quality of network infrastructure (i.e. technical and operational efficiency levels) weighted 25%, the level of Government grant weighted 22% and the financial proposition and strength of bidder 10%.
  5. Existing infrastructure is leveraged: The awarded NetCo will use existing ducts, manholes and exchanges, thus reducing cost and wholesale prices and minimizing public inconveniences during roll-out.
  6. Aiming at high take-up rates by providing incentives to home-owners to connect: Each home/building owner will enjoy waiver of installation charges for the 1st termination point (in the living room) when the network first reaches his/her premise. Fibre installation (surface ducting) charges to 1st termination point will be waived for initial 15m (cost-oriented charges will follow thereafter) – Yes, that’s right, cost-oriented charges.

Nice! Wouldn’t you agree?

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Australia’s Minister of Broadband Interviewed about NGN

On September 30, 2008   /   Expert Insight, Government, The Blog   /   Leave a comment

In an interview published today at TelecomTV, Australian Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy discusses Australia’s national strategy for broadband. The bidding process for the Australian NGN is completing at the end of this year. Watch the interview at the end of the post. Here’s the interview’s highlights:

  • The project aims covering 98% of Australian homes
  • Connection speeds are required to be 12Mbps minimum
  • The Government’s contribution in this project will be $4.6billions
  • The network will be based on FTTN architecture with copper covering the distance from the intermediate node to the end customer
  • The project’s time frame is 5 years

Covering 98% of Australia is certainly an ambitious task; however, speed requirements of 12Mbps 5 years from may fall short for Australian, especially if the rest of the world keeps the pace in the broadband race.

Side note: Two are the main contenders for this project. Telstra (the Australian incumbent) and Terria, (a Telco consortium comprised of Telstra’s major competitors).

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Finland to Consider Government Funding for NGN

On September 20, 2008   /   Government, The Blog   /   Leave a comment
While on the other side of the Atlantic voices are calling for governmental support to uplift broadband figures, Finland is yet another European country to publicly consider the government funding of NGNs. The cost of the investment would be EUR 200 million, of which the state would pay up to a third, municipalities, regions and the EU another third, and telecommunications companies at least one third. Under the model, the public support would be paid to the builders of the networks.

However, public money is not on offer for subscriber connections – that is, the two last kilometres. Bringing 100 Mb fibre optic, or radio link connections all the way to people’s homes would raise the costs by EUR 480-780 million. Connections between homes and the optical fibre network are expected to involve the traditional copper cables or wireless connections. Speeds of both copper and wireless connections are expected to increase considerably in the coming years to dozens of megabits a second.

Nevertheless, this is a historic decision since the Finnish government has traditionally avoided active involvement and preferred to let market forces to lead industry development. As said by Eselinen, Frank and Hirvonen in “Does strategy matter? A comparison of broadband rollout policies in Finland and Sweden“:

The Finnish broadband strategy proposal, published in December 2003 reflects the legacy of the general Finnish telecommunications policy. In contrast to its Swedish counterpart, it relies on market forces and emphasizes technological neutrality. According to its operational aims, by the end of 2005 the household penetration rate of broadband should be 40%, all citizens should have access to high-speed, easy-to-use and affordable data transfer, and Finland should be among the leading European countries measured by communication network demand and accessibility. These aims were pursued by means of 50 action points, putting most emphasis on measures promoting competition in the broadband markets, the provision of services and content in the networks, and strengthening the demand for broadband. The proposal also included action points for low-demand areas. These included recommendations for creating regional strategies for broadband deployment, increasing competition in local markets, and providing schools and libraries with public broadband connections. However, no government funding for broadband infrastructure investments was made available, which was against widespread expectations partly fuelled by the Swedish policy model.

Read more in “State support proposed for high-speed broadband“.

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Greek National Broadband Strategy: Some Initial Concerns

On September 8, 2008   /   Government, Greece, The Blog   /   1 Comment

The national broadband investment plan recently announced by the minister of communications has brought optimism to the market and society:

  • The project shall influx a substantial amount of money to the telecommunications industry (constructions, vendors etc).
  • The introduction of an independent intermediate managing entity of the network can solve some of the employment issues of the anticipated downturn of the industry (layoffs, bankruptcies, mergers).
  • For the citizens this project, when materialized will provide high quality access to the information society.
  • For the ISPs it gives some excellent prospects to boost their market shares.

However, it brought also some skepticism sincethere is a series of practical issues that need to be carefully addressed for the project to come off. Here are some of my concerns:

  1. Project’s execution period & financing: If all things go as planned the project will not start before the end of 2009. This means that the project will not have completed before 2017. So, EU FP7 funds will not suffice to finance the entire execution of the project and other source of finance will not only be required, rather become mandatory. Also, the lengthy period of the execution makes the project highly susceptible to many unaccounted risks (i.e. political and/or financial developments)
  2. Investment Incentives: Attracting private money to invest in PPPs will be another tough issue since the (rightful) inclusion of smaller cities will take ROIs well into the future (20-30 years)
  3. Industry’s capacity to perform: Very recently, “Call 93” (public infrastructure projects for 75 municipal metro fiber networks) issued 54M euros worth of construction work which eventually have had to be done within roughly 2 years. The industry found it extremely difficult to cope with this excess of work and many projects delayed partly due to industry’s limited capacity. Ministry’s project will issue 300M euros per year for 7 consecutive years, or 25M euros per month (almost 1M euros per working day). Assuming a cost of 80 euros/meter based on “Call 93” estimations (all included, i.e. collocation facilities, constructions, active & passive equipment), brings the requirements for ducts construction up to 12.5Km/day. Judging from the past, is this figure feasible?
  4. Inclusion of smaller cities: The funding of (only) 50 smaller cities seem to me to deviate from the previous strategic choice to include 75 cities in Call 93. How will many of the MANs built under Call 93 develop when they are restricted from the national broadband care? Shouldn’t a set of actions be coordinated for these cities too?
  5. Universal Service Obligation: When funding a national infrastructure with public (taxpayers) money universal service obligation have to be taken into account. Therefore, a longer-term plan for USO (coverage expansion and/or minimum service levels) must be negotiated with the soon to be formed PPPs

I’d most certainly welcome any comments and discussion on this. Join me or flame me freely!

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Greek National Strategy for Fiber Access Networks

On September 4, 2008   /   Government, Greece, The Blog   /   7 Comments

Yesterday, Minister of Communications, Mr. Chatzidakis announced the long awaited national strategy for fiber access networks (see FTTH). Following the examples of Korea, Japan and Sweden, Greece drafted a national strategy for fiber access based on governmental funding and coordination to build a nationwide fiber infrastructure to ensure fiber access to approx. 2M households (That’s about 40% country coverage). The project is budgeted at 2.1bn euros.

The project’s main attributes as are announced at this stage are:
  1. Creation of an Open Access network for telecommunications and digital service providers
  2. User connections will be at least 100Mbps
  3. The network will provide Dark Fiber services based on the passive infrastructure model
  4. Management will be granted to private partners on a PPP basis for 30 years
  5. Project’s time of completion: 7 years
  6. Project wil include Athens, Thessaloniki and the 50 biggest cities of the country
  7. To speed up the execution, the project will be separated in 3, each part covering a distinct geographical area of the country by a different PPP
Government will provide funding and subsidies, update the legislation and regulation framework and define technical specifications.
Clearly, there are many implementation and coordination issues to be clarified and worked out but while things are progressing let us all enjoy the momentum and prospects!
Here’s the press release, in Greek. UPDATE: Here’s a google/translate_t version of the PR.
You can watch, also in Greek, the ministerial presentation below:

Download the Presentation of Hellenic Optical Infrastructure Project from Slideshare.com.

or watch it online from google/docs:
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