Endesa Net Factory. PLC as an alternative for rural and remote broadband access. Developing broadband access in rural and remote areas
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1 Endesa Net Factory PLC as an alternative for rural and remote broadband access Porto, October 25 th, 2004 Developing broadband access in rural and remote areas José Comabella López PLC Network Director
2 Agenda 1 Introduction to PLC Technology 2 Endesa s Experience on PLC 3 PLC for rural and remote access 4 Conclusions 1
3 1 PLC Technology Applications PLC technology keeps improving its performance and capabilities, it is already commercially available and offers a great applications potential PLC Areas Opportunity 1 Access PLC New businesses Increase profitability of its customers through the cross-selling of new services: PLC 2 In-House PLC Access: Broadband Internet, Telephony, Video on demand, video conference, In-house house: Security, automation, LAN, Entertainment,... 3 New services PLC for Energy Management Improvements in Operations Efficiency (Automatic Meter Reading) Increase in infrastructures efficiency and Investment optimization New added value services 2
4 1 PLC Technology Access Technology As an access technology, the use of existing power infrastructure favors PLC cost position versus other technologies competing for the last mile PLC Access Technology Comments Internet, Telephony and other networks LVSS 1 Medium voltage Low voltage Terminal Uses existing infrastructure with a higher potential coverage than any other access technology PLC can offer broadband services Service Center LVSS 2 LVSS 3 at transmission rates equivalent or better to ADSL Substation Approx. 500 meters LVSS 4HE Repeater PLC transforms a conventional electrical plug into a connection point (ubiquity) for advanced telecom services (Broadband Internet Access, Telephony (VoIP), Domotics...) LVSS n LVSS 5 Head End (Installed in the Transformer Station) PLC equipments are already commercially available LVSS 6 Repeater (Installed in the Meter Room) Terminal (Installed in the home of the customer) Transformer Substation PLC allows for high market responsiveness as the installation is fast 3
5 1 PLC Technology Equipment PLC equipment using DS2 chip set (OFDM) is offering the best performance with a maximum bandwidth of 45 Mbit/s for 1G and 200 Mbit/s for 2G PLC Suppliers Access Equipment PLC Chip Set provider Equipment manufacturer Medium Voltage Access In-house ** * 2 nd Generation DS2 Chip Set is leading the PLC market with maximum bandwidth of 45 Mbit/s for first generation chip set and 200 Mbit/s for second generation chip set, in both cases using an OFDM modulation. DS2 has signed strategic agreements with the most important world manufacturers such Mitsubishi, Schneider, Sumitomo, Toyocom and others for use its technology Main.net equipment is using ITRAN chip set in its first generation products. ITRAN chip set uses SS-DS modulation and has a maximum bandwidth of 2 Mbit/s. Is a low performance and low cost technology very easy to deploy Up to 45 or 200 Mbps Up to10 Mbps * A Schneider Company ** A CISCO Company and American Electric Power (not exhaustive) Up to1,5-2 Mbps ASCOM was pioneer in the launching of commercial PLC equipment. Its first generation equipment is GSMK based with a maximum bandwidth of 4 Mbit/s. ASCOM second generation equipment is DS2 chip set based 4
6 1 PLC European Overview PLC Experiences More than 80 PLC initiatives in more than 40 countries show a high interest in PLC technology among worldwide utilities European PLC trials and commercial initiatives * Austria Linz AG Tiwag Czech Rep. PRE Finland Turku energia Iceland Reykiavik Energy Ireland ESB Italy ENEL Norway Lyse BKK Poland Pattern Stoen Portugal EdP France EDF Cegetel Europe Germany EnBW MVV (PPC) GWS Drewag Stadtwerke Hameln Stadwerke Hassfurth Energieversorgung Offenbach Spain Endesa Iberdrola Unión Fenosa Sweden Vattenfall Graninge Skanska Elforsk Switzerland Sunrise/ EEF UK SSE Telecom Source: White Paper on Powerline Communications, 2004 Note: the figure lists some of the PLC commercial projects in progress in October 2004, as well as trials and tests released in press only during 2004 *The list is not exhaustive 5
7 1 PLC European Overview PLC Experiences After successful experiences, companies are moving on towards commercial initiatives and launches Trials PLC initiatives development status* Massive technology trials PLC Commercialization Not Exhaustive Reykiavik Energy Energieversorgung Offenbach Source: Arthur D. Little (PLC Survey developed for the PLC Utilities Alliance, December 2002 and July 2003) * Not Exhaustive 6
8 Agenda 1 Introduction to PLC Technology 2 Endesa s Experience on PLC 3 PLC for rural and remote access 4 Conclusions 7
9 2 Endesa s Experience on PLC Endesa s PLC Field Trials Endesa Net Factory has been very active in the development of PLC activities for the last four years Year 2000 Year 2001 Year 2002 Year 2003 Year 2004 TODAY Pilot Trials Pilot Trial Barcelona and Sevilla Pilot Trial in Chile Business Analysis Preliminary Business Analysis: Spain and Latam Business Analysis Chile (Carrier) Massive Trials (MTT) MTT PLC Zaragoza Business Models Commercialization in Spain (ZGZ and BCN) Institutional Relations Direct, through PLC Forum(*), through UNESA (**), through PUA (***),... (*) Endesa presides the Board (**) Endesa presides the PLC Workgroup (***) Endesa presides the PLC Utilities Alliance composed by EDF, EDP, EEF, ENEL, Endesa, EnBW, Iberdrola and Unión Fenosa 8
10 2 Endesa s Experience on PLC Endesa s PLC Field Trials The PLC network was rolled out selectively and complementary to the existing fiber network Deployment Zones in Zaragoza Comments HFC Zone PLC Zone HFC & PLC Zone In five months a PLC telecommunication network covering homes has been implemented The roll out has been selective on an area and building level - Complementary to existing infrastructure - Innovative application of Medium Voltage PLC (Saves investment and speeds up roll-out) There have been more than 600 interventions in substations and meter rooms without any interruption of the electrical service The roll out does not require any specific licenses for the utilization of public space due to the use of PLC via Medium Voltage cables 9
11 2 Endesa s Experience on PLC Endesa s PLC Field Trials Endesa network mainly uses Medium Voltage PLC, improving the economics and the speed of the rollout Network Architecture Core City Pop Switc h MINI POP FO FO FO Client s Flat CPE Internet Internet Core Switc h Gateway FO SS SS HE PLC MV & LV SS Switch FO SS HE PLC LV Meter Room Repeater C lie n t s F la t C lie n t s F la t ISP Gatekeeper HE PLC MV & LV HE PLC MV & LV C lie n t s F la t CPE CPE SS SS Meter Room CPE PSTN PSTN HE PLC MV & LV SS HE PLC MV & LV HE PLC MV & LV Meter Room Repeater Meter Room Repeater Repeater FO / MV PLC / xdsl / LMDS LV PLC Inhouse Public works are not necessary Time to market Competitive cost Use of existing infrastructure 10
12 2 Endesa s Experience on PLC Endesa s PLC Field Trials More than 300 buildings and users were deployed and placed in service in five months, connecting 140 Low Voltage transformers CPE installations Deployment Data Usuarios = CPEs PLC users users per week (including repeaters, CPEs, and PC modifications) 2000 More than 70% of users installed in two months Connection of 140 L/V transformers: - 56 L/V transformers with optical fibre 0 4-mar 11-mar 18-mar 25-mar 1-abr 8-abr 15-abr 22-abr 29-abr 6-may 13-may 20-may 27-may 3-jun 10-jun 17-jun 24-jun 1-jul 8-jul 15-jul 22-jul 29-jul 05-ag ag ag ag-02 2-sep - 84 L/V transformers with PLC M/V Source: Key Performance Indicators of the MTT, ENF 11
13 2 Endesa s Experience on PLC Endesa s PLC Field Trials Different concentration levels per L/V transformers and Meter Rooms were tested in order to evaluate the impact in the QoS Concentration of active Modems per L/V Transformer and Meter Room # CPEs # MR Z01195 Z01418 Z08976 Z01869 Z01336 Z01351 Z02127 Z01342 Z01236 Z02824 Z01346 Z02823 Z01343 Z01088 Z01407 Z01406 Z01971 Z01355 CPEs Z01872 Z01970 Z00966 Z01070 Z15332 Z01112 Z00997 Z0SHRO MR Z00979 Z01072 Z15333 Z01000 Z01011 Z01081 Z01116 BASRDS2 Z01144 Z01060 Z00990 Z01147 Z01165 Source: Key Performance Indicators of the MTT, ENF Concentration in L/V transformers is between 1 and 133 users 20% of Heavy Users are in the 5 more concentrated L/V transformers 12
14 2 Endesa s Experience on PLC Endesa s PLC Field Trials Internet users developed an intense usage of PLC services where traffic symmetry should be highlighted INTERNET ACCESS: Daily total traffic (MB) Comments 87% of users use the Internet service daily 94% of users use it weekly Num of Users De 0 a 5 48% 631 INTERNET ACCESS: Users distribution per average daily usage De 6 a % De 11 a 50 17% 217 De 51 a 100 5% 7% % 39 De 101 a 500 De 501 a 1000 Heavy Users > % % 50% 40% 30% 20% 10% 0% % Users Daily traffic Total MB (In + Out) Daily traffic average per user: 200 MB Heavy Users 20% of the users with highest traffic during the Trial The Spanish average Internet usage is 5,3 (*) MB daily 20% of users manage more than 100 MB daily (Heavy users) Source: Key Performance Indicators of the MTT, ENF (*) Source: NetValue, Internet Overview, June
15 2 Endesa s Experience on PLC Endesa s PLC Field Trials The voice traffic analysis shows heavy usage, specially after providing the possibility to make long distance calls Calls Call In Call Out Total TELEPHONY: Daily traffic (Inbound & Outbound) First stage Second stage Third stage More than 1,5 million calls 10/9/02 12/9/02 14/9/02 16/9/02 18/9/02 20/9/02 22/9/02 24/9/02 26/9/02 28/9/02 30/9/02 2/10/02 4/10/02 6/10/02 8/10/02 10/10/02 12/10/02 14/10/02 16/10/02 18/10/02 20/10/02 22/10/02 24/10/02 26/10/02 28/10/02 30/10/02 1/11/02 3/11/02 5/11/02 7/11/02 9/11/02 11/11/02 13/11/02 15/11/02 17/11/02 19/11/02 21/11/02 23/11/02 25/11/02 27/11/02 Máx.daily: calls Stages Comentarios First stage: Only local calls for all telephony users Second stage: Opening up of national calls communicated to a group of 500 users Third stage: Opening up of national calls communicated to a group of 500 users TELEPHONY: Users distribution per average daily usage Usage % 19% 66% of users 18% % 16% 65 % of the clients use the service daily and % 12% 14% % 84 % weekly % 10% 5,27 Calls per day and % 6% 8% user 6% % 3% In Spain the average % 6% 50 4% number of calls per day 32 2% 0 0% of the residential Nº Calls per Day segment is 4, More than 10 Source: Key Performance Indicators of the MTT, ENF 14 Number of users % users
16 2 Endesa s Experience on PLC Endesa s PLC Field Trials The users were very satisfied with the global service offering and the majority showed interest to continue to use PLC services The users have shown very satisfied with the service quality of PLC Internet Access Satisfaction with PLC services PLC has been evaluated better than ADSL (4,32 PLC vs. 3,65 ADSL) The users have shown satisfied with the service quality of PLC telephony The general satisfaction with PLC telephony was 3,65 compared with 3,99 obtained by incumbent Telefónica Analysis of the general satisfaction of the trial and the disposition to continue Very unsatisfied Unsatisfied Indifferent Satisfied Very Satisfied General Satisfaction: 4, Probability to continue: 3,21 Probability to recommend: 3, Improbable Less probable Probable Very probable Definitely Source: User Satisfaction Study, Endesa Net Factory, November
17 2 Endesa s Experience on PLC Endesa s PLC Commercial Launch Endesa is currently commercializing PLC Services in Zaragoza and Barcelona Characteristics of the Commercial Trial A C1 License was obtained by Endesa, in order to conduct the Carrier Services (October 2003) Client: Auna TLC Date of commercialization : 27 th October 2003 Potential market Zaragoza: - Existing deployment Potential market Barcelona: - New deployment in selected areas by Auna Services provided with PLC: - Telephony: Voice over IP/PLC (VoIP/PLC) - Internet Access: 128, 300 or 600 kbps The Commercial Offer was designed combining services and different bandwidths, with competitive prices regarding those of other access technologies in Spain 16
18 Agenda 1 Introduction to PLC Technology 2 Endesa s Experience on PLC 3 PLC for rural and remote access 4 Conclusions 17
19 3 PLC for rural and remote access Current situation The access to telecommunications is an economic and social factor without any type of doubt The geographical isolation of the rural and remote areas is historically a brake for the economic development, for cultural interchange and, in general, for the access to any type of services With the advance of the telecommunication technologies, the lack of infrastructures in the rural and remote areas has increased the Digital gap. In the case of the use of broadband services is specially noted that this technology is focused in urban areas The low density of the rural areas, highly spreads and with long distances to cover in order to be connected to the telecommunication networks increase the transport infrastructure cost Due to this later point, to extend broadband networks to rural and remote areas, at the end to the 100% of the population, is not a business for Telecommunication Operators 18
20 3 PLC for rural and remote access Transport Technologies A key issue to develop broadband services in rural and remote areas is to build a transport network that optimize investment and able to offer quality of service Remote Area Fiber Optic Fiber Optic PoP High capacity High cost, could be optimised if Power Line cables are used to support the Fiber Optic cable Remote Area Satellite Point of Interconnection with TELCOS Network Satellite PoP Remote Area Minimum infrastructure Difficult to provide voice service with standard quality Moderate cost Radio links Radio link PoP It is necessary a lot of intermediate antennas High cost, it needs manage permissions for frequencies and antennas, environmental impact 19
21 3 PLC for rural and remote access Fiber Optic in Power Lines Electricity arrive to rural and remote areas using Medium Voltage Power Lines. Fiber Optic manufacturers (Alcatel, Pirelli...) have develop different technologies to install Fiber Optic cables in the Power Lines OPGW Optical Ground Wire. The substitution of an existing ground cable by a cable combining the classical functions of a earth wire and telecommunications capacity has a long history OPPC Optical Phase Conductor. When the power line is not equipped with a ground wire is possible the substitution of the phase conductor MASS Metallic Aerial Self-Supporting. When is not possible to use ground or phase conductors a new cable can be added to the line ADSS All-Dielectric Self-Supporting Cables. Same case but without any metallic messenger wire ADL All-Dielectric Lashed Cables. Requires to use a ground or phase conductor as messenger wire. Is the fast and most cost-effective technology 20
22 3 PLC for rural and remote access Access Network Regardless transport technology used to connect remote areas, PLC technology can be interconnected with any other access technology in order to minimise CAPEX of the access network Access Network Architecture Comments PLC In-Home The most easy way to connect PLC equipment to other access technology is across layer two IP interfaces in which should be possible to define QoS using IEEE 802.1Q/p standards PLC PLC In-Home Wireless technologies such Wi-Fi and WiMAX in a near future could be easily combined inside a PLC network PLC PLC PLC technology can provide the connection for the different access points in order to minimize cost, to avoid problems of LoS and increase speed of roll-out PoP Inside houses or buildings can be used to minimize number of antennas 21
23 Agenda 1 Introduction to PLC Technology 2 Endesa s Experience on PLC 3 PLC for rural and remote access 4 Conclusions 22
24 4 Conclusions As Access Technology Technology Trials have confirmed the viability of a PLC network and Commercial Launches are creating momentum among key telecom players (regulators, potential clients, operators and authorities) Conclusions Technology is able to support massive deployments: - PLC can offer Broadband Internet Access (> 2 Mbps) and VoIP services - PLC can be applied to low and medium voltage grids - Fast and selective deployment - Interconnection with public Internet and Telephone networks has proven viable - Competitive provisioning times - The market opportunity is evolving very fast Current regulation framework allows PLC Deployments Future generations of PLC Technology and price reductions (not only in PLC equipment) are key for competitive massive deployments Easy combination with other technologies in order to minimize the CAPEX of the access network 23
25 4 Conclusions As Business in rural areas Technology has been confirmed and is commercially available, but in order to be successful in the rural market it is needed the financial support of governments, mainly for the transport network Conclusions To roll-out a network to provide broadband services to rural and remote areas requires an high investment because is needed to arrive to low density populations over great distances Average nationwide (Spain) loop cost is about 250 Euros, but this figure doubles and even triples in high-cost rural areas It is necessary to offer to rural customers similar services and prices that to urban customers Competition as a solution in rural areas remains questionable With these conditions there is no business for private initiatives. Never will recover the investment Government has to reaffirm its commitment to provide universal service support through special help programs 24
26 For additional information: ENDESA NET FACTORY Ribera del Loira, 60 3 rd floor Madrid, Spain Fax: e- mail: info@plcendesa.com 25
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