FTTx Business Models
Market & Data Reports - 05/01/2009
Key variables to achieving profitability
Starting with a model of the different expense and income items, and investment spending in particular, this report measures the sensitivity of a number of FTTx network rollout variables: population density, technical architecture, penetration rate, ARPU… with the measurements themselves segmented by type of operator (incumbent carrier, alternative operator, new entrant).
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| M81508 |  | PDF | 70 |
3500 euros excl. VAT |  |
| M81508 | | paper | 70 |
2900 euros excl. VAT | |
| M81508 |  | PDF | 70 |
3500 euros excl. VAT | |
| M81508 | | paper | 70 |
2900 euros excl. VAT | |
Additional copy at 300 euros excl. VAT Euros
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• What criteria are shaping ultra-fast broadband players’ choices?
• What are the strengths and weaknesses of the different players involved?
• What level of profitability can be expected from fibre rollouts:
- depending on the zone being covered
- depending on the passive infrastructure access mode
- depending on the level of competition…
• What are the key factors and chief obstacles to players' commitment to ultra-fast broadband?
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• Characteristics
- Housing structure (density, verticality…)
- Architecture of the existing network (average size of central offices and cabinets)
• Income:
- ARPU (retail and wholesale)
- Coverage rate
- Penetration rate
• Expenditures:
- SAC
- IP interconnectivity and content access costs
- Technical costs
- Passive infrastructure rental costs
- Amortisation
• Investments:
- Network construction feasibility study costs
- Cost of digging trenches and/or outlets in existing underground passages
- Manhole costs
- Price of fibres and installation costs
- Price of other passive equipment (splitters, connectors, etc.)
- Price of active electronic equipment (ONT/OLT, switch/CPE Ethernet, VDSL, DSLAM/Modem)
- Subscriber connection study fees
- Connection costs |
1. Market status and players involved
1.1. Rollout status
1.2. Type of players involved in the market
2. Business model and simulation
2.1. Model structure
2.2. Model parameters
• Technical configurations
• 7 different types of geographical zone
• Other decisive criteria in the modelling exercise
• Increasingly complex realities
3. Modelling results for each zone
3.1. Common hypotheses to each type of zone
3.2. Densely populated urban zone
3.3. Vast, densely populated urban zone
3.4. Urban zone with an average population density
3.5. Suburban, high rise
3.6. Suburban, residential area
3.7. Concentrated rural zone
3.8. Dispersed rural zone
4. Study of the results’ sensitivity to key variables
4.1. Zone characteristic chosen for sensitivity study
4.2 Constructed and rented civil engineering variable
4.3. Rollout speed variable
4.4. Relative penetration variable
4.5. Customer mix variable
4.6. Subscriber acquisition and management cost variable
4.7. Churn rate variable
5. Large-scale rollout simulation
5.1. National FTTN + VDSL rollout
5.2. Progressive FTTH rollout
6. Conclusions
• Key factors and chief obstacles to profitable ultra-fast broadband operations
7. DataBook
• Detailed results of simulations |
Based on different FTTx technologies (notably VDSL, GPON and E-P2P) and according to various market features, an income and expense model developed by IDATE that makes it possible to calculate expenditures and
associated operating results, notably:
• Annual and accrued investments (CAPEX)
• Income before depreciation and amortisation (EBITDA)
• Operating income (EBIT)
• Annual and accrued free cash flow (FCF)
Several dozen variables and indicators (see list) are factored into the model. Simulations presented in the report generally cover 10-year periods. |
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