Cost Saving Measures for Broadband Roll-out
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1 Cost Saving Measures for Broadband Roll-out out Izmir, 22 February 2013 Petri Koistinen, DG CONNECT The views expressed in this presentation may not in any circumstances be regarded as stating an official position of the European Commission
2 Broadband penetration drives competitiveness and growth Correlation Fixed Broadband Penetration and Competitiveness 5.8 WEF's Global Competitive Index score Japan US Sweden Finland UK Germany Belgium Austria France Luxembourg Ireland Estonia Czech Rep. Spain Poland Portugal Lithuania Italy Cyprus Hungary Slovenia Malta Bulgaria Slovakia Latvia Romania Netherlands Denmark Korea Fixed broadband lines per 100 population A 10% increase in the broadband penetration rate results in 1-1.5% increase in annual GDP per-capita. Faster broadband = higher GDP growth (Czernich et al. - University of Munich, 2009) Still, the Europe is lagging behind in high speed broadband infrastructure investment
3 The DAE Broadband goals % internet coverage % coverage of 30Mbps 50% households take-up of 100Mbps
4 NGA coverage (30 MBps) end 2011 Source: Point Topic: Broadband coverage in Europe in 2011
5 How to ensure investments in fast and ultra-fast Internet access? Increase regulatory certainty and consistency across Europe Stimulate demand for high bandwidths Provide for sufficient spectrum Facilitate financing Lower deployment costs
6 Broadband deployment costs High Speed Broadband Deployment Costs (e.g. UK, based on Analysys Mason, 2008) The largest single cost component is civil engineering - up to 80%. Up to 30% cost reduction could be achieved by the re-use of existing ducts, including those of alternative infrastructure owned by other utilities (e.g. water, energy, railways) Measures can be taken to make investment more efficient, less costly, all in a competition-enhancing way (Analysys Mason, 2008; Francisco Caio, 2008; WIK, 2008, etc.)
7 Breakdown of deployment costs (UK estimate) Source: Analysys Mason (2008) for the Broadband Stakeholder Group
8 Cost saving potential Using existing passive infrastructure opposed to new construction: 30-60% Co-deployment opposed to self-deployment: 15-30% Equipping new buildings NGA-ready opposed to retro-fitting existing buildings: 60%
9 Cost reduction measures are envisaged by several initiatives The Digital Agenda for Europe called on Member States to take measures to facilitate broadband investment, among others through making sure that civil engineering works systematically involve potential investors, clearing rights of way, mapping available passive infrastructure suitable for cabling and through upgrading in-building equipment The Broadband Communication (COM(2010)472) indicated a number of regulatory measures that could be adopted at national and local level to promote investment and reduce investment costs, such as reducing the civil engineering costs through a proper coordination by national and local authorities, using town planning rules and remedies mandating access to passive infrastructures. The ecommerce Action Plan (COM(2011)942) called on Member States to place investments in high speed internet at the core of their growth strategies, [ ] among others by adapting town planning law to limit deployment costs.
10 but the pressure to act is mounting Conclusions of the European Council (1-2 March 2012): 15. In particular, efforts will continue in order to [ ] complete the Digital Single Market by 2015, in particular by adopting measures to boost confidence in on-line trade and by providing better broadband coverage, including by reducing the cost of high-speed broadband infrastructure (under the EU Action heading) Single Market Act II (COM2012(573)) Key Action n. 9: "Reduce the cost and increase efficiency in the deployment of high speed communication infrastructure."
11 Why action at EU level? Good practices exist in several MS, but they remain scattered and rather scarce costs/risks for the Single Market Measures at EU level could yield significant efficiency gains in network deployment and could stimulate investment, especially cross border.
12 Public consultation on an EU initiative Consultation published on the DG INFSO website and on Your Voice in Europe on 27 April 2012 Deadline for submitting a contribution was 20 July Contributions from a wide variety of stakeholders received (beyond telecom and including also utility companies, manufactures, local authorities etc.)
13 Main results of the Consultation Nearly all the respondents identified significant benefits for NGA rollout from a more intensive and coherent EU infrastructure sharing regime, including utility companies. Mapping was generally acknowledged as an enabler for access to existing passive infrastructure, though overall benefit depends on costs. Due to technical and organisational challenges, benefits of co-deployment and coordination of civil works vary from case to case. Industry responses clearly pointed to the need to simplify/streamline/reduce the costs of the permit granting process. Responses suggest a general consensus as to the need to equip new buildings NGA-ready.
14 Potential Types of Measures under Consideration Making a better use of existing infrastructure, including across utilities Enhancing transparency and coordination of civil engineering works Handling requests to rollout networks in a more efficient and transparent way Ensuring ready for NGA access buildings
15 1. Making a better use of existing infrastructure Increasing access to existing passive infrastructure of telecom operators Providing access to infrastructures of utility companies in other sectors Increasing transparency on existing passive infrastructures
16 Mapping - examples & costs Source: Study on Support for the preparation of an impact assessment to accompany an EU initiative on reducing the costs of high-speed broadband infrastructure deployment, Analysys Mason (SMART 2012/0013)
17 2. Enhancing transparency and coordination of civil engineering works Enabling operators to benefit from clear announcements of the planned civil engineering works Systematically offering possibilities to lay new ducts or other infrastructure when public works are undertaken
18 3. Handling requests to rollout networks in a more efficient and transparent way Raising awareness and coordination among authorities involved in permit granting Creating a information access point concerning permits Ensuring timely decision
19 4. Ensuring NGA-ready access to buildings Ensuring NGA-ready new buildings Ensuring open access to terminating segments of next generation networks
20 Thank you for your attention!
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