French telecom regulator discusses sharing fiber infrastructure

Gabrielle Gauthey, a member of ARCEP’s executive board, recently discussed the role of government in encouraging the deployment of fiber, business models, the risk of creating new monopolies and stifling competition, sharing passive infrastructure, and financing long-term investments in fiber. Gauthey maintains that in France, a single operator would not finance a nationwide fiber network in a short time frame.Operators making these investments will make money by selling wholesale capacity in their networks.

Other regulators in Europe (including the European Commission) share Gauthey’s view, so the article provides an overview of the direction in which European countries are heading in terms of broadband deployment and telecoms regulation, especially where it concerns competition. Note the emphasis in her article on sharing broadband infrastructure. You can read the article here.

Here are excerpts from the article:

High costs mostly in the passive infrastructure

Initial assessments show that the cost of deploying a nationwide FTTH network would require a total investment of several tens of billions of euros, spread out over more than 10 years. It is quite unlikely that one operator could alone build such a nationwide project in a reasonable timeframe.

Passive infrastructure accounts for the bulk – 70 % to 80 % – of network deployment costs. Particularly onerous are civil engineering costs, more than 50 % in urban areas, as well as costs related to cabling buildings. But the cost of fibre is low, and the cost of active equipment will continue to decrease with mass deployments.

Based on the assessments, profitability could be reached not only in very dense zones, but also in cities with a medium density,only if there is a high degree of passive network sharing.

Sharing passive infrastructure is the key

Sharing passive infrastructure appears to be the key to removing entry barriers and favouring an economical deployment of high-speed broadband. There are two ways of implementing this sharing: either by using existing infrastructure or by co-investment and/or coordination when networks are to be built. It would make sense for the first operator installing fibre to use ducts big enough, and in a sufficient numbers to accommodate the fibres of other operators.

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