Hybrid wireless systems and other technologies to enable social impact of real broadband services to rural communities
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1 Hybrid wireless systems and other technologies to enable social impact of real broadband services to rural communities Paolo Campoli Director, Solutions Development Cisco Systems - EMEA OECD workshop on developing broadband access in rural and remote areas Porto, 25 October
2 Broadband Drivers for universal broadband: 1. Economics (increase Enterprise and SME productivity, impacting local and national GDP) 2. Political: broadband as national infrastructure. Better G2C services 3. Social: inclusion (ehealth, teleworking, elearning) Definition of Broadband: Bit rate of at least... 2 Mbit/s per seat ; application driven Possibility to growth: % year over year No hidden costs Manageable complexity (Content provider, Service Provider, Network Provider, end user) Ubiquitous coverage FiberSpeedEnglish.exe 2
3 FTTH (Ethernet) business case sensitivity Demographics Network topology/maps Cost of labour SOHO/SME revenues Residential revenues Capex Opex 13,6 8,6 14 8,3 15,1 TV 9,0 Vod Regulatory 50,6 60,7 65,8 Internet 5,2 14,8 8,2 3,4 29,4 34,9 37,4 7,6 4,4 3,6 Voice Other
4 Density Optimisation Roll-out Strategy Methodology Gather key demographic data at district level (74 zip codes in Munich) : Population, number of households Surface Number of businesses Discard green areas (parks etc.) and sort the districts by decreasing business and household density Result: Munich example NPV Maximum NPV = 65 M$, IRR=16% Surface covered : 140 sq km (45% of total) HH covered : 511,000 (73% of total) Business covered : 73,000 (84% of total) IRR 25% 20% 15% 10% 0% 25% 50% 75% 100% Portion of city surface covered with FTTx 5% Starting with the most dense district, add districts one by one and calculate at each step NPV and IRR Add districts until the set of districts maximizes the NPV Optimise Munich vs. Administrative Munich Administrative Optimised Source: McKinsey analysis 10km 4
5 Rural has multiple definitions Densely populated villages Multiple last mile options: Fiber, WiFi or DSL Cost of back-haul can be a barrier Upfront demand can justify Central Office upgrade, or WiFi will support pay as you grow model Scattered single-family houses Different last mile options: DSL from rural CO s, Power Line Communication Vital economy vs depressed regions Private-Public Partnership vs Public Sector demand aggregation No single solution for all purposes Demand is not guaranteed 5
6 WiFi for rural areas 6
7 Optimization of DSL for Central Offices upgrades Lowest possible cost in the transmission system to reach the Central Office, point to point connections Small size DSLAM s (also known as pizza box ) DSLAM Ethernet BRAS Converged IP/MPLS Core Network 7
8 PPP: Most Common Business Models (1) Models : Service Provider Municipality PHYSICAL INFRASTRUCTURE (Dark Fiber) Municipality NETWORK (Backbone and Access) CONTENT Service Providers 8
9 PPP: Most Common Business Models (2) Models : Service Provider Municipality PHYSICAL INFRASTRUCTURE (Dark Fiber) Municipality NETWORK (Backbone and Access) CONTENT Service Providers 9
10 Equal Access Networks What is an open infrastructure? Provider A service bundle Provider B service bundle Provider C service bundle Alternative A Provider A B C Every house owner can sign a contract with 1 provider of choice. 10
11 Access Media Transparency An Access-Agnostic approach to service delivery: Common Services, End-User Mobility, ubiquitous access xdsl DSLAM ATM / Ethernet BRAS Fiber Cable Access Switch Head-End Ethernet L2 Network BRAS Converged IP/MPLS Core Network WiFi+Sat WiFi Network Satellite Access Network BRAS 11
12 Conclusions Ubiquitous access to broadband services is a priority at economical, political and social levels Rural broadband is segmented by density, end-user sector, access to capital Partnerships are key to success and are different by region: Private-Public, Local-Central No one-fit-all technology solution, WiFi with Satellite backhaul or optimized ADSL access have proven viability Metro Ethernet fiber deployment can be made viable as well, when supported by proper cooperation models (PPP, incentives) 12
13 Presentation_ID 2003 Cisco Systems, Inc. All rights reserved. 13
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