Financial requirements for nationwide fibre access coverage

It is common knowledge that Next Generation Access (NGA) networks require significant investments and that for many regions, especially in more rural areas, there is no viable business case. Taking note of the broadband strategies formulated by European governments the deployment cost is analysed to assess options for extending the profitable coverage of FTTH. In this paper a bottom-up cost model is applied to determine the investment and cost of deploying and operating a FTTH network in Germany on a national level. The monthly cost per subscriber at rising penetration is compared with the Average Revenue Per User (ARPU) to determine the required penetration level or the required revenue for profitable operation in a steady market state. Those regions for which there is no business case are analysed with regard to the level of required subsidies. All modelling is based on differentiated geotypes reflecting urban and rural areas. The basic cost model used has been applied to numerous case studies before and was adapted to determine different forms of subsidies. The research questions addressed are. What is the limit of profitable FTTH coverage in Germany? What is the level of prices, internal subsidisation or investment subsidy necessary to increase the coverage of FTTH in Germany? These results inform policy makers and operators of the relevant investment deltas and/or price levels needed to increase the coverage of next generation broadband access infrastructure. --Next Generation Access,FTTH,cost modelling,GPON,P2P,broadband strategy

Modelling the impact of Next Generation Access (NGA) on voice termination cost

Termination of a telephone call can only be realized by the network operator of the receiving party. For this reason, the markets for fixed and mobile call termination are regulated ex-ante including price control. To determine the costs of call termination the current regulatory regime considers only those parts of the network where customers compete for jointly used resources (mainly bandwidth). Therefore, the critical border is the "demarcation point" between the end customer dedicated access network and the aggregation network where customers compete for bandwidth. In addition to the extent of the overall network cost to be considered (depending on the location of the demarcation point) the traffic share of the voice termination service (which determines how much of the relevant cost is borne by voice termination) compared to all the other services sharing the same NGN/ NGA network needs to be taken into account. We analyse the cost effects with a cost model, which considers the part of the access network from the MPoP to the demarcation point, where the dedicated (access) network begins, in detail. This allows us to compare the impact of different demarcation points and service scenarios on the level of voice termination rates for three NGA architectures (FTTH/P2P, FTTH/PON and FTTC). We considered double and triple play service packages and ran sensitivities on data usage. In addition, we calculated termination cost for three different demarcation point locations in the case of FTTH/PON. --Voice Termination,Next Generation Access,FTTH,price regulation,termination monopoly,cost modelling