Crister Mattsson - Socio-economic impact of broadband: testimonial from Scandinavian city networks

08/11/2011 # 1 Part of Swedish ICT

crister. [email protected]

Socio-economic impact of FTTH in Sweden

2011-11-08 Crister Mattsson Acreo

http://www.acreo.se/


44 per cent of all households and businesses in

Sweden have access to at least 100 Mbps

broadband

34 % of the homes have possibility to connect

to fiber

Fiber coverage 0- 83 %

40 municipal. have less than 1 %.


Business Models

Single Operator

OPCO

NetCo

RSP

RSP

RSP

Netco

OP

CO

R

SP

RSP

RSP

Netco

OP

CO

OP

CO

OPCO

RSP

RSP

RSP

Traditionel


Urban Networks with competition

85

74

63

45

10

20

30

40

50

60

70

80

90

2010200820062004

Procent

År

Perc

ent

Year


Investment decisions

Roll

out

cost

Telco

roi

Roll

out

cost Telco

return

Un-

captured

values

yes No, but should be yes


increased use of ICT services

Competition between SPs

reduced forced migration

ICT competence HR pool

Ease to do business

FTTH deployment

Very high access speed New infrastructure Direct economic activity

True cloud computing

HD and 3D TV VoD

Videoconf Telepresence

E-health

E-government

Logistics, prod, management

Sensor networks

Democracy strengthened

transparency in PA

efficiency in PA

Distance working

reduced traffic congestion

Network gaming

Dev. of new technologies

Customers for new services

corruption discouraged

lower publ spending higher tax revenue

productivity

learning curves

lower prices for services

lower entry barriers

low upfront investment

for NP and SP

Functional separation

new business model possible

higher employment

Virtual labour mobility

entrepreneurship

e-learning

Profitability of NP and SP

Profitability Of PIP

RoW revenues

reduced ènvironment

impact

GDP

lower burden of bureaucracy

Perceived quality of life

Video surveillance

Power grid efficiency

New ICT and traditional companies

New/better services

Education quality and cost

ICT Maturity: digital natives

Increased market value


Is it possible to calculate the return for society ?

Cost for Ftth deployment

Effects of the Investment


More fiber homes passed

gives more employment

and improved population

development


• FTTH cost:

o fast-deployment scenario (investment during four years)

o Investment to connect all households not yet connected

source: companies active in FTTH installation in Sweden

• Return on investment calculated year by year, 1–5 years:

o economic activity directly related to construction

input-output multiplier approach

o savings in the municipal and regional-government costs for

data and telecommunications

extrapolation


o increased GDP due to increased employment

means of multivariate regression analysis

o added value for end users

extrapolation of rates

o Enhanced population growth is also quantified, but is not

translated in terms of economic returns.

o Longer-term induced effects harder to measure as of today

o Causality was taken care of by introducing a time delay

between fibre deployment and observed effects


0

2000

4000

6000

8000

10000

12000

14000

16000

18000

�år 1 � år 2 � år 3 � år 4 � år5

AVKASTNING

INVESTERING


0

2000

4000

6000

8000

10000

12000

14000

16000

18000

�år 1 � år 2 � år 3 � år 4 � år5

"IND. AVK."

"DIREKT AVK."


0

10000

20000

30000

40000

50000

60000

70000

�år 1 � år 2 � år 3 � år 4 � år5

"ACK. AVKASTNING"

"ACK. INVESTERING"


The City of Stockholm reduced the cost of

telecommunication with 30 % = 4,5 mill Eu /y

The regions of Norrbotten and Sthlm reduced the

cost of tele-communication with 50 %.


Sthlm 15 M Eu - 30 %

~ nationell = 50 M. Eu

Region 50 %

~ nationell level = 27 M.Eu

The total cost for connecting the the rest of

Swedens total homes with fiber is ~ 4 Bill.Eu


Installation cost for fiber lan in MDU av are 275 Eu / apartm.

275/20 y = 13,75 /y

Installation gives higher rent with 4,7 EU per m

= 56,4 Eu/y


In Suburban Stockholm, the municipal

Sundbyberg have 83 % fiber

Arvidsjaur ( small municipal.) in remote north of

Sweden have 67 %.


Conclusions

Increased fiber penetration gives significant

impact on severel indicators as population and

employment

Municipalities and regions can lower the costs of

communications

Fiberinstallation are profitable for MDU

Crister Mattsson - Socio-economic impact of broadband: testimonial from Scandinavian city networks

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