Hartwig Tauber - Public-private partnership and financial investment models
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Transcript of Hartwig Tauber - Public-private partnership and financial investment models
FTTH Market & Financing of FTTH
Hartwig Tauber, Director General, FTTH Council Europe
Workshop on Municipal Fiber Networks
FTTH Council Europe
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FTTH Council Europe
Our Vision: A sustainable future enabled by Fibre to the Home
Our Mission
• To accelerate FTTH adoption through information and
promotion in order to enhance the quality of life, contribute
to a better environment and increased competitiveness
Organisation
• Founded in 2004, non-profit industry organisation
• More than 150 member companies
• Industry only – no operators
FTTH Conference 2012 14-16 February 2012, Munich, Germany
www.ftthconference.eu
Europe in the slow lane?
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Digital Agenda of European Commission
• By 2020…
• At least 50% of the households in European Union will use broadband connections of 100 Mbit/s or more
• All households in European Union have broadband connections of
at least 30 Mbit/s available
• Published in Q2/2010
• High priority in some European countries
FTTH Global panorama mid-2011 – Total subscribers
4.6 M
46 M 9.5 M
… and FTTH continues to grow
5.6 M
0.3 M
FTTH Global Ranking – mid-2011
FTTH European Ranking – mid-2011
New FTTH/B subscribers 1H11
Source: IDATE for FTTH Council Europe
• Top 5 countries
• France
• Portugal
• Bulgaria
• Netherlands
• Spain
+87,300
+71,000
+69,000
+43,000
+41,149 (Russia: + 964,000)
• EU is not one single telecommunication market (like US)
• Each member state has its specific broadband market with different players involved. Examples:
• Countries with strong utility involvement: e.g Sweden, Denmark
• Countries with strong competition on last mile: e.g. The Netherlands, France
• Countries with strong government involvement: e.g. Portugal, Slovenia
• Countries with strong incumbent and competition mainly on unbundling basis: e.g. Germany, UK
• Countries with main focus on mobile market: e.g. Austria
• There are no real „pan-European“ players. One operators often acts very different in different countries, e.g. Deutsche Telekom or France Telecom
Analysis of European Broadband Market
• High number of former Easter European countries in European ranking: • Baltic states
• Slovenia
• Slovakia
• Bulgaria
• Rumania
• Czech Republic
• Three main reasons:
• Need for building or rebuilding communication infrastructure (e.g. Lithuania)
• Strong involvement of Western European Operators (e.g. Slovakia)
• Dynamic market with many new players (e.g. Bulgaria)
FTTH in Eastern Europe
European Region FTTH Forecast
Source: Heavy Reading for FTTH Council Europe, February 2011
Note: Households connected directly to fibre (FTTH) and apartments connected via basement fibre termination (FTTB)
18923509
5519
8265
11065
14476
19430
25665
32604
0
5000
10000
15000
20000
25000
30000
35000
2007 2008 2009 2010 2011 2012 2013 2014 2015
Co
nn
ecte
d H
ou
seh
old
s, 000s
Europe in Context: the Race to Fibre Maturity
Source: Heavy Reading for FTTH Council Europe, February 2011
Country 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
After
2020
Japan
Korea
China
Taiwan
Australia
India
USA
Canada
Brazil
Russia
France
Germany
Italy
UK
Spain
Sweden
Netherlands
Portugal
Switzerland
Denmark
EUROPEAN UNION
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Note: chart shows the year in which each territory
is expected on current trends and plans to
achieve “fiber maturity”, defined here as 20%
household penetration of FTTH or FTTB
Financing of FTTH Networks
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• FTTH is an infrastructure financing needed
• Financing of deployment of end-user fixed network is a new scenario for all players
• Typical misunderstandings:
• FTTH financing does not work because ROI is more than 4 years basic misunderstanding: FTTH is an infrastructure
• FTTH is too expensive (I) investments in Telecommunication infrastructure in Germany was 82,7 billion EUR from 1998-2008. This is 2.000 EUR/household
• FTTH is too expensive (II) no need for expensive frequency spectrum fees. In Germany operators paid 3 billion EUR just for frequency-licences of the “digital dividend” in 2010
• FTTH investments are compared with interim investments in “alternative” technologies FTTH is the end game solution, no expensive “migration path” necessary
• Situation changes if FTTH is understood as infrastructure like railroads, streets, water supply or sewers
The Challenge
Different Players – Different Requirements
Municipalities & Utility companies
• Long term investments
• Regional projects
• Project costs relatively small
• Business case based on open access in many cases
• Lack of experience in planning, operating and marketing telecommunication networks
Alternative Operators
• Enter a competitive market
• Limited cash flow
• Challenge of low equity
• Short-term planning
• High risk
• Good experience in operating and marketing telecommunication networks
Incumbents
• Own a telecommunication network already
• Limited by „shareholder value requirements“
• Short-term (and sometimes mid-term) planning
• „big and slow“
• „bound“ to national perspective
Different Players – Different Requirements
Institutional Investors
• High volume
• Stock exchange listed companies only (with some exceptions)
• Require a „professional“ business case
• Some understanding of FTTH
Banks
• Low volume
• Risk avers (Basel III)
• Lack of understanding of FTTH
Risk Capital & Business Angels
• Medium volume
• Need to be addressed directly
• Need for a good „business story“
• Short term investments
• Lack of understanding of FTTH
EIB
• High volume
• Official „role“ to finance FTTH
• Good understanding of FTTH
• „slow“
• Trigger private share
How to Match?
Networks
• Municipalities & Utility Companies
• Alternative Operators
• Incumbents
Financing
• Institutional Investors
• Banks
• Risk Capital & Business Angels
• EIB
• Create understanding &
increase awareness
• Neutral information
• Political agenda
• Marketing
• Lower risk
• Eurobonds
• PPP
• Cooperation models
• Public investment
• Innovative approaches
• Investment aggeregation
• „multiple usage“ of
investment (e.g. for LTE)
The Impact of FTTH
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Example of Hudkisvall
• Hudkisvall: – Population: 15.000
– Location: 300 km North of Stockholm
– FTTH-Network decision: 2004
• Impact: – Population decline stopped, partial increase
– Increase of number of businesses: 6-14% per year
– Two high-growth businesses founded premises in Hudkisvall
– Old@home Ehealth-project started
– National research instituted stared subsidiary
Example of ARGE Glasfaser Waldviertel
• Three municipalities (Bad Großpertholz, St. Martin, Großschönau) in rural Austrian area
• Start of deploying new sewers network in 2006 • Mayors decision: deployment of FTTH in parallel
– With support of local population – Against incumbent and regional politics (Bundesland)
• Impact:
– 100 Mbit/s parallel network available including triple play
– Young families start to move back into municipalities
– “Connected tourists” – “Sonnenplatz” – competence centre on passive
houses founded in Großschönau – Special connected homes for elderly people will
open 2012
Conclusion
Conclusion
• FTTH is the infrastructure of the 21st century
• FTTH stands for – Quality of life
– Economic leadership
– Socioeconomic benefits
• …and the basis for a competitive Europe
Thank you for your attention!
www.ftthcouncil.eu