BROADBAND AND DIGITALISATION IN SWEDEN
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1 BROADBAND AND DIGITALISATION IN SWEDEN Per Fröling Regional Coordinator 1
2 Swedish Local Fibre Alliance A non profit organization Started members With the vision to create an open Lobbying ICT-infrastructure which contributes to a sustainable development of the society Development projects Broadband conferences, education and information Member in the Government Broadband Forum 2
3 LOCAL FIBER NETWORKS AND MUNICIPALITIES
4 Local fiber networks in Sweden Alternative to the incumbent 92 % owned by the municipal; 38 % as a part of the local utility company 28 % as a stock company 27 % as a direct administration Business conditions No discrimination open networks Enable hundreds of different service providers App 50 % of the fiber access network Lively fiber and capacity market Common SLA, business agreements, systems and purchasing Increasing competition, new actors entered Municipals Private 4
5 Main Customers Operators (fixed & mobile) o Connections to households and companies to offer ultra high speed broadband with triple play o Connections to their mobile sites with fiber to be able to offer mobile broadband Municipals Real estate owners o Securing ultra high speed broadband smart IT for living Service providers o Often a local or regional company without their own infrastructure o For IT and administration 5
6 The role of the municipalities Sweden's 290 municipalities are responsible for a larger share of public services in comparison with the situation in most other countries The municipalities are legally or contractually responsible for the following: Social services, childcare and preschools, elderly care, support for the physically and intellectually disabled, primary and secondary education, planning and building issues, health and environmental protection, refuse collection and waste management, emergency services and emergency preparedness, water and sewerage Other activities on a voluntary basis, for example: Childcare, preschools and schools account for over 40 %of budgets Elderly care and care of the disabled account for almost 30 % of budgets One in five employees in Sweden, or just over 800,000 individuals Service providers in the fields of care, social services, education and infrastructure A supervisory responsibility, for example, for the measurement of air and water pollution and for checking the labeling of foodstuffs Leisure activities, cultural activities, apart from libraries, which are a statutory responsibility, housing, energy, broadband, industrial and commercial services 6
7 Sweden - Finland SWEDEN 10 M population 4,6 M Households km2 20 inhab/km³ population dencity FINLAND 5,6 M population 2,9 M Households km2 16 inhab/km³ population dencity 7
8 MARKET DEVELOPMENT AND INVESTMENTS
9 Top 10 countries in FTTH/B coverage sept 2016 Finland: 27% Average FTTH/B coverage Europe EU39: 45% (39%) EU28: 33% (27%) Austria 8 % Coverage: Number of HP/ total Number of Households Source: IDATE for FTTH Council Europe, 2016 (2017) 9
10 General ranking: FTTH/B take-up rate 10
11 The Swedish broadband story State subsidy for residential PC mid 90th Need for infrastructure in the municipals mid 90th Expansion towards the market earning trust late 90th Broadband demand from the households early 00th State subsidy boosted infrastructure expansions 2001 Making local fiber infrastructure accessible mid 00th Demand for higher bandwidth increases heavily late 00th The Government decide a broadband goal for Sweden 2009 The households more and more asking for fiber late 00th Fiber-fever
12 Substantial differences in conditions for fiber 4/26/2017 Urban area Apartment block 2,3 million hh Many customers Willingness to invest Several infrastructures Urban area single-family houses Rural area 2 million hh 0,3 million hh Limited willing to invest Costly per hh Few alternative infrastructure Fewer alternative Fiber to the farm Willing to invest, if state subsidies 12
13 Fiber to the villa example of investment 2 million villas Now app 42 % fiber connected (total nearby 61 %) Fierce competition between Telia, local fiber networks and other actors Selling for pre orders building when % said yes. Webpages where you can register Almost a fight between different villa areas to be first with 50 % pre orders One time fee average Euro high paying willingness! 13
14 Rural areas fiber to the farm Infrastructure building by the citizens example of investment! subsi dies! 140 m Eur/ye ar Also given education, templates and guidelines for fiber to the farm
15 COMPETITION MEANS LOW PRICES FREEDOM OF CHOICES PROFITABLE INDUSTRY
16 Value Chain End customer 4 3 Operation* 2 1 Service providers Capacity Dark fiber * Operation includes 13 vital functions 16
17 How the three open network business models are implemented in Sweden PLOM - ALOM Wholesale: Only Dark fiber Wholesale: Only Ethernet Capacity (no dark fiber) Only used in a few local fiber networks Only used in a few local fiber networks 3LOM Wholesale Offer: Dark fiber Ethernet Capacity Operation Most common and preferred model 17
18 Which types of infrastructure are built? FTTC All cabinets is connected with fiber for internal use. Approx. 5-8% of the cabinets is for external sale. FTTB Approx % of all MDUs are connected with fiber. FTTH Approx. 42% of SDUs are connected with fiber 18
19 Wholesale Products Offer dark fiber on equal terms (94%) Offer capacity - and transmission services on equal terms (67%) The local fiber networks should not offer their own end customer services. 19
20 Local fiber networks means competition good for the consumers! Swed en: Lowe st pric the w e in orld f o Mbit/ r 100 sec 20
21 21
22 Swedish TV-viewing changes most rapidly in the world Netflix (34%) and HBO (9%) - early in the Swedish broadband market Video on demand has grown with over 350 % the past 3 years 47 percent of the Swedish population look at Subscribe video on demand every day Traditional broadcasting TV have lost 7 % over the past 5 years 22
23 SYSTEMS FOR THE MARKET - MAKING BUSINESS EASIER
24 Business development...broadband Factory! Concept for local fiber network owners Framework agreement for local fiber business Purchase agreements Business system and framework for local fiber connections and operator connection requests 24
25 CESAR2 business system for fiber and capacity 25
26 Price example Dark fiber - wholesale Meter Price fixed price 134 /month/fiber pair fixed price 189 /month/fiber pair fixed price 235 /month/fiber pair fixed price 295 /month/fiber pair Meterprice 0,6-0,8 price per m/month/fiber pair 26
27 Capacity - wholsesale Fixed & mobile Operators (Terms of agreement 12 month) Product Capacity Ethernet Light 100Mbps 85,00 395,00 240,00 Ethernet Premium 100Mbps 200,00 570,00 385,00 Ethernet MEF 100 Mbps 370,00 370,00 370,00 Ethernet Medium 100 Mbps 82,50 525,00 303,80 Price min Price max Pris median 27
28 Wholesale Capacity for home access connections Operators (fixed) and Service providers Capacity for best effort services (Mbps) downstream upstream Entry fee monthly fee
29 DIGITALISATION OF THE SOCIETY
30 Wellfare services Statement Within ten years time half of the consumers use of broadband will be related to wellfare services School and education Healtcare Elderly care Sport Culture 30
31 Local fiber networks create Increased competition The local fiber networks are a prerequisite for a functioning broadband market. Open networks The open network that owns the local fiber networks is the guarantor of "equal access to the network" and operator independent networks. Broadband for more The local fiber networks are an important tool in the work to take a holistic approach to deployment in a municipality where both urban and rural are included. Perplexity for municipalities There will be a rapid digitalization of municipal services in the coming years. This will provide new challenges for the municipalities and demands a comprehensive digital strategy. Local development A prosperous business is an important issue for the municipality. This work represents the city network an important tool to improve the local conditions to conduct business. Future smart communities While today we have a strong focus on the expansion of broadband households will need to connect even things grow strongly in the coming years. This can include everything from lamp posts to bus stops. 31
32 THANK YOU!
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