opinion


Builders, utilities, and telcos must work together to provide fiber FROM the home

fibre cable 3

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this post, Ryan Ding from Huawei Technologies looks at ways in which telcos can more efficiently expand their broadband infrastructure by collaborating with other stakeholders.

In our ultra-connected era, it is nevertheless true that 1.1 billion homes remain completely unconnected, while 400 million have slow connections and unreliable data speeds. Research shows that a 20% increase in ICT investment can lift a country’s GDP by one percentage point, making the activation of national broadband networks a matter of strategic concern to governments around the world.

Supporting those networks is a responsibility shared by governments and operators alike. But the necessary groundwork needs to be laid (sometimes literally) if businesses and households are to get the broadband connectivity they require.

By working with construction companies, power-grid operators and other utilities, communications service providers can help build out broadband infrastructure while reducing their costs in time and money. This will only happen, however, if governments support this undertaking with the right regulatory frameworks.

Both the ITU and the European Union advocate greater infrastructure sharing and coordination as a means of increasing access to high-speed broadband, and improving the efficiency of the civil engineering efforts needed to provide it. Governments can help by enacting supportive policies that encourage investment in, and provision of, the necessary infrastructure.

For greenfield sites, such policies would require that buildings be fiber-ready before occupancy or sale. For brownfield sites, regulatory frameworks would provide incentives to provide broadband via existing power lines, with power companies leasing spare capacity to broadband providers.

Possible business models for such infrastructure-sharing could include:

  • Outsourcing, where the utility company lays the cable and is compensated by the broadband provider
  • Renting, where the utility lays the fiber and leases unused capacity to a communications service provider (or offers broadband services itself)
  • Build-and-sell, where the utility lays the fiber and sells it outright to the communications service provider.

Such cooperation has been shown to work in different markets around the world.

In Croatia, for example, OiV, a publicly-owned communications service provider, obtained government support to combine the excess fiber capacity of seven other state-owned companies to form an integrated broadband network. Consolidating the capacity of power and transport companies allowed OiV to start its broadband service faster and more cost effectively.

In Norway, Lyse, an energy company, entered the communications market by providing last-mile connectivity through its subsidiary, Altibox. By stacking energy and telecommunications connections in a single trench, Lyse was able to provide TV, games, business video and other services. It now has more than twice as many broadband customers as it does energy customers, and directly controls 40% of Norway’s fiber market.

In China, the world’s second-largest economy and home to its largest community of Internet users, the Ministry of Housing wanted to enhance the effective use of fiber-to-the-home in greenfield areas. It issued regulations requiring communications service providers to share network access and optical fiber resources before selling new buildings.

This forward-thinking approach exemplifies a new concept that might be called Fiber-from-the-Home. Building out FTTx infrastructure is time-consuming and labor-intensive, and granting communications service providers easy access to non-telecommunication infrastructure helps them deploy broadband, while reducing construction costs associated with the last mile. China’s approach represents a change in perspective: instead of thinking of how to get fiber to the home, the starting assumption is now that there will be fiber connectivity from the home (or business).

Such infrastructure sharing will reduce investment and maintenance cost, and shortens the project’s startup phase. To help realize such synergies, cities should develop construction codes that incorporate “rules of fiber readiness” before selling properties to consumers.

Connectivity and high-speed broadband are important economic enablers that contribute to GDP; in fact, research shows that a 20% increase in ICT investment can lift GDP by a full percentage point. Broadband development and effective service startup depends on government encouragement and flexible regulations. By enacting the right policies, regulators can help ensure that countries get the broadband connectivity they need, while helping providers contain costs.

 

Ryan DingRyan Ding is President, Products and Solutions, at Huawei Technologies, Inc.


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