Must-read analysis of Amsterdam FTTH project

ING Bank has published an analysis of the Amsterdam FTTH project (Citynet), its impact on Dutch telco incumbent KPN and summaries of FTTH rollouts in Europe and the US. I urge everyone to read the report (note: the ING’s real estate group is investing in the Citynet project).ING Bank has published an analysis of the Amsterdam FTTH project (Citynet), its impact on Dutch telco incumbent KPN and summaries of FTTH rollouts in Europe and the US. I urge everyone to read the report (note: the ING’s real estate group is investing in the Citynet project).

The report concludes that “GNA (the entity laying the fiber) is viable with a 40% subscriber take-up and while generating monthly wholesale revenue of ‚Äö?ᬮ25 per connection, assuming that the fibre investment has a 30-year life span. We note that press reports have stated that CityNet expects to see subscriber take-up of around 50% with each customer spending around ‚Äö?ᬮ50 per month, implying a monthly gross contribution of ‚Äö?ᬮ25 per customer for BBned and the service providers. We conclude that GNA and the overall CityNet project can succeed, although there are start-up risks.”

Among the interesting bits of information are the high rates of subcriber sign-ups at other Dutch FTTH rollouts (80% in Nuenen) and the stats on bandwidth requirements (page 15 of the report):

Typical bandwidth requirements for future homes: Service Bandwidth required

– 2 MPEG-4 HDTV streams: 24Mbit/s

– Internet: 8Mbit/s

– Voice: 0.25Mbit/s

– Video telephony: 5Mbit/s (duplex)

– Total 37.25 Mbit/s

Why incumbent telcos hate FTTH projects

ING’s report summarizes the effect that municipal and region-backed FTTH will have on European telcos:

The impact of competing FTTH rollouts on European incumbents is clearly negative. Fixed-line incumbents at the moment are trying to extend the life of their existing physical assets ‚Äö?Ñ?¨ their copper networks ‚Äö?Ñ?¨ by investing in ADSL technology. They have little incentive to accelerate the obsolescence of their existing networks by upgrading their local network connections with fibre. If they do nothing, incumbents could lose up to 30-60% of their current lines in areas where there is competing fibre network deployments.

To read the report, click here (PDF).

[Note: Thanks to Dirk van der Woude for sending this report.]

Comments

  1. They don’t address the effects FTTH might have on municipial/broad WiFi progress…any thoughts?

  2. When you have a fiber network in a city, you can use it for backhaul. That means the citywide wireless network can deliver more bandwidth to users. People can use applications that require a lot of bandwidth (e-learning, telemedicine, mobile VOIP, gaming, video) without being stuck behind a desk. Sandoval County in New Mexico is rolling out a countywide network that will do precisely that — they are using the National Lambda Rail fiber backbone.

  3. […] For those who want to know how much a FTTH system costs and what the business models are, go to this article on Muniwireless about the Amsterdam CityNet FTTH project, and download the analysis (PDF). In Municipal Wireless, Technology Posted Monday, August 14, 2006 […]