Profitable fibre operators - what do they look like?

tore@teleinfo.no's picture
Submitted by tore@teleinfo.no on Sun, 2012-06-17 21:24

From various discussions in this forum, and other places around the globe, it seems like the rolling out of hi speed internet (preferably by rolling out fibre) needs additional gov't funding to take place.

I wonder - can we have some examples of profitable fibre operators?? What are they doing right - and what should other fibre operators do to become (more) profitable? What are the KPIs (Key Perfomance Indicators...) for these operators on for instance..:

* customer mix
* ARPU (Average Revenue per User)
* COGS (Cost of Goods Sold)
* Margin (income for operator after paying for purchased content etc)
* OpEx (Operational Expenses)
* CapEx per customer (Capital Expenditure

With more than 1.000 smart brains gathering in Brussels - I would hope that someone can bring forward some good news and examples here?

Tore Aarønæs
tore@teleinfo.no
www.teleinfo.no

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conder's picture
Submitted by conder on Mon, 2012-06-18 22:22

There are plenty of examples in the USA from the sound of things, a new report is going to be out soon in the form of a book. Unfortunately it won't be ready in time for the digital assembly, but Lindsey Annison has just completed a tour of 16 states and many community and municipal fibre networks. They have different models but all are proving there is a need, and it can be profitable despite the best efforts of incumbents to break them. Its a shame she wasn't invited to the assembly, but I guess we'll still be talking about the same stuff next year so she can come then.
Its time to light some fibre.
Let us hope you are right Tore, and that there are others present who could provide some European examples. Otherwise we'll be stuck with the usual play it safe and give the telcos a bit longer to sweat the copper ass ets.

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andrew's picture
Submitted by andrew on Tue, 2012-06-19 13:40

Have followed Lindsey's travels, and while plenty of positive, there was a sense that in many cases the PR did not match the delivery.

Also look at FIOS pricing, $79.99 (plus taxes and fees) for their 50 Meg service.

Hopefully the book will look at comparisons with older utilities, and show that US has a history of JFDI, with a good number of community owned utilities still operating.

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conder's picture
Submitted by conder on Tue, 2012-06-19 15:20

I think that will come through Andrew, she's good at documenting it all, the trailblazers of fibre are hard at work from the sound of things. Its such a big place though, they have a long way to go to get to everyone in the US. I look at the size of the UK and think 'surely we could do it if we really tried'...

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andrew's picture
Submitted by andrew on Wed, 2012-06-20 12:56

One massive advantage compared to UK and EU in the more rural US, is that even small towns are service by four lane highways (dual carriageway in UK speak).

With sufficient borders that there is space for all manner of services. Same advantage B4rn has of going cross country.

Also the large but common water towers in each small town are a ready made location for fixed wireless.

If UK tried it could do it, but UK and EU is blessed with accountants rather than can-do, and guess who holds the purse strings.

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conder's picture
Submitted by conder on Thu, 2012-06-21 22:44

Even easier in the US with long open roads, guess Oz is finding the same. Bit harder in UK with hedges and walls on little fields, but everything is doable if you make your mind up to do it.
Time to dig.

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alchalabi's picture
Submitted by alchalabi on Tue, 2012-11-13 18:47

The incentive for investing in a network infrastructure is determined by the potential Return On Investment (RoI) in the infrastructure over the lifetime of investment. This depends on the difference between the revenues generated from the services delivered and the cost (capital, operating, and maintenance) of delivering the services over the infrastructure.

The revenue from the access network depends on the services that can be delivered over the network. These services include regulated voice (telephony-PATS), TV (CATV); and data (broadband and superfast broadband) services. The NGA infrastructure should deliver all these service, and NOT only voice or television or data. Currently (2012), telephony (voice) generates the highest revenue, and it is regulated under the Universal Service Directive.

The cost of the access network consists of civil work and communication system cost. The cost of civili work is the same for nearly all technologies deployed in the fixed networks which can be copper, coaxial or optical fibre. In fact, the cost per metre of an optical fibre cable is less than a copper cable.

The cost of communication system consists of telecommunication equipment at the telephone exchange, street cabinet, and the customer premise. The cost of fibre cable is actually lower than the cost of copper. However, the cost of terminal equipment and powering to maintain service availability will depend on the choice of technology. The cost of currently standardised terminal equipment over copper is lower than the cost of currently standardised optical terminal equipment, especially in the case of delivering telephony as a Universal Service. The cost of upgrade will depend on the services delivered over the infrastructure. The cost of delivering very high bandwidth services (more than 20 Mbps) over distances of more than 2 km will require fibre in all cases. The upgrade of optical systems to deliver broadband service can be lower than copper based system, but current standardised optical equipment is higher than copper.

Obviously, if a technical solution is invented that delivers telephony over optical fibre at similar cost to delivering it over copper, then the roll-out of optical fibre will be accellerated to deliver telephony. The fibre infrastructure can then be upgraded to deliver superfast data and HDTV services to exploit the more than 30,000 GHz of optical fibre infrastructure.

This needs a new standard for optical technology for FTTH.

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