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Bouygues Telecom to serve THD92 customers

13 Jul

THD92 is the largest Public-Private Partnership in fiber broadband deployment in Europe, and yesterday it passed a very significant milestone. THD92 is an open fiber access network that should ultimately connect all dwellings in the 92 département (roughly 600 000 if memory serves me correctly). It was strongly opposed by the French incumbent, who went all the way to Brussels to challenge the project under the State Aid rules, but it was ruled compliant by Brussels because (in a nutshell) the subsidy covered the costs of connecting areas that  the private operators had no intention of connecting. Despite this win though, collaboration with established service providers had until now proven complicated.

So it’s indeed a significant event that Bouygues Telecom yesterday officialised its contract with Sequalum (the company that won the PPP bid in charge of deploying and reselling the access circuits) to serve customers over the fiber infrastructure. Bouygues is only the 4th national player in broadband in France, but its market share has been growing briskly. More importantly, it’s a national brand with great brand notoriety and a positive image.

It’s often said that the Achille’s Heel of open access fiber networks is the unwillingness of established brands to offer services over these networks. Without the weight of such brands, it’s hard to drive penetration, and the take-rates remain low, undermining the revenue base of the infrastructure venture. By signing this contract, Bouygues Telecom reinforces the solidity of the THD92 project, and offers itself a golden opportunity to benefit from first mover advantage.

Strange Dynamics in the UK FTTx Market

10 Jul

The UK has been a market of particular interest for me in the last few months, partly because as I noted in a previous post, we have seen a lot more private initatives in FTTH there than in most other markets. I believed back then, and still do, that BT’s clear “FTTC only” stance explains why these initiatives have bloomed.

Before anyone jumps on my back for saying that BT’s approach is “FTTC only” despite the fact that their plans have since 2009 included 10% or more of FTTP (depending on announcements), I would simply point out the fact that the FTTC deployments have progressed steadily, meeting and sometimes exceeding targets whereas FTTP plans have gone nowhere. The fact that over three years after their initial NGA announcement, BT is still launching pilot FTTH programs says a lot about their commitment to more than FTTC (or lack thereof).

Based on this, one can either applaud BT for their caution or blame them for their lack of forward thinking, but ultimately neither position accurately reflects the constraints they operate under. In an excellent post on the CFH blog last week entitled An Ocean Apart, ex-Diffraction Analysis collaborator James Enck analyses BT’s financial results and comes to the evident conclusion that no matter how much they might be saying that they’re also doing FTTH, their financials say otherwise.

In my view, BT’s constraints being as imperative as they are, there’s not much point in blaming their approach. There are two major mistakes they made however that I think are creating the climate for strong infrastructure competition to BT in the UK:

  • the first one is to not have planned ahead for FTTH openly. In other words, being transparent and explicit that FTTC was a transitory technology and that exchanges would be upgraded to FTTH within a planned timeframe. Even if that timeframe is long, publicizing such plans and sticking to them would have created a disincentive for infrastructure competitors. Cynical maybe, but private players and local governments seeing the complexity and cost of infrastructure deployment might have arbitrated differently if they knew that the state of the art solution would come to them in a reasonable timeframe.
  • the second one is not to have focused their FTTC deployment outside of areas already covered by Virgin Media. When arbitrating between low costs and high potential take-up, BT went for the former when it could have created more goodwill and higher customer loyalty by focusing on the areas where the need was starker.

I have to reiterate here that I have serious doubts about BT’s strategy. My back of the napkin reconstruction of their deployment costs for FTTC (especially due to that insane in-home installation requirement, sometimes multiple home installations apparently…) makes them excessively high (for FTTC) and maybe not that far from a well engineered PON deployment. The fact that they’re going head-to-head with Virgin Media without a decent TV offer and with a lot less headroom bandwidth-wise seems to spell doom as well. I hope I’m wrong.

Meanwhile, BT has passed 10m homes (although conversations I had with people on the ground suggest that may be over-inflated) with FTTC, and has 550k subscribers on its Infinity retail offer. I couldn’t find any numbers on other service providers leasing the FTTC wholesale products, but I’m told it’s around the 10-20k mark (any pointers welcome). Considering how long they’ve been on the market so far, that’s not a bad take-up overall, but it’s not glorious either, and very very far still from a take-up rate that could conceivable lead to a positive ROI…

Meet me in Tehran !

8 Jul

On July 25-27th I will be in Tehran. I'll be speaking publicly at the Telecoms Iran Conference 2011 on the topic of National Broadband Networks and doing a number of meetings in Tehran. My planning isn't solidified yet, but I'm expecting at least one evening to be free, and probably more.

Anyone based there and wanting to meet to talk telecoms and/or next-generation access, please send me an email !

How Net Discrimination Works (Or Doesn't Work…)

3 Mar


I'm increasingly puzzled by the net discrimination stance that a number of European Incumbents have started to push forward in the last few months despite mounting evidence that the "alternative business model for the internet" that they are pushing forward simply cannot work. I summarized my views a few months ago in a piece entitled The Slow Suicide of Net Discrimination. Now I'm looking for evidence that backs or disproves my thesis.

A few weeks ago, one of the players who has been vocal about establishing a Net Discrimination regime for the internet, France Telecom, gave us a wonderful example of this and a fun case study for me. Two things happened on the same week and the confluence of these two events made my cortex tingle:

  • AT Kearney released a study sponsored by European incumbents (including France Telecom) that recommended that a traffic tax be put in place for content and application owners accessing the networks of telecom operators.

AT Kearney released a study sponsored by Telefonica, Deutsche Telekom, Telecom Italia and France Telecom entitled A Viable Future Model for the Internet and subtitled "Investment, innovation andf more efficient use of the Internet for the benefit of all sectors of the value chain". I will probably post a full critical review of the study in a few weeks, but suffice it to say at this stage that the fact that it is sponsored only by telcos may cast doubt on the "all sectors of the value chain" assertion.

One of the key conclusion of this study is that internet traffic passing through telco networks should be taxed for the "model to be viable". The recommended tax is as follows:

  • 0,05 €/GB of fixed termination traffic
  • 3,03 €/GB of mobile termination traffic

Since the model is supposed to be viable and since France Telecom, that very same week, purchased Dailymotion, I thought it would make sense to apply these rates to an estimate of Dailymotion's traffic to see how "viable" the model was. 

First, the hard data:

  • Dailymotion shows roughly 1 billion videos per month (Source Dailymotion 2009)
  • The average video on Youtube was 10MB in 2007 (Source). I couldn't find anything more recent or specific to Dailymotion, but in all likelihood using this figure actually underestimates the size.
  • I couldn't find a source that stated the exact proportion or number of monthly videos served over mobile networks so I assumed 10%. (If anyone has any clear source for this, please share it and I'll run the model again). All the press releases about the 

Based on these numbers, Dailymotion would have to pay roughly €3.5m per month for distribution of its content. That's €41,76m per year.

Dailymotion's 2010 turnover was €18m. In other words, Dailymotion not only wouldn't be able to pay the tax if it was instituted, it would instantly go bankrupt. That's, apparently, what our European Incumbents define as a "viable future model for the Internet".

Additionally, this back of the napkin calculation raises an interesting question about France Telecom's intentions in buying Dailymotion. I can see one of two explanations: 

  • France Telecom doesn't believe that the model it's lobbying for is actually viable
  • France Telecom is trying to kill Dailymotion

Take your pick…

More Canadian Laughter…

25 Feb

I had an incisive Net Neutrality post planned for today, but I didn't have time to write it, so I'll resort to the good ole trick of sharing a viral video. This one is part of the meme using Hitler's defeat scene from Downfall to comment on the abusive cap situation in Canada. It's a testament to the talent of the actor playing Hitler and the director that that scene is so powerful as to spark so many parodies. This one is truly very funny though, you've been warned. 



Update: Switzerland

25 Mar

Thanks to silver reader Benoît, I added a couple of data points on existing swiss projects and added the Sierre Energie project Vario TV to the WoF map.

I’m still searching for a better Google Maps implementation, but in the meantime, remember there are two pages !

Update: Portugal, Switzerland and Germany

14 Mar

I did a long needed update to the World of Fiber map. I added:

  • Sonaecom’s project in Portugal
  • M-Net’s project in Augsburg, Germany
  • a muni-fiber project in St Gallen, Switzerland

Keep ‘em coming, folks, and thanks a million to Harald and Scott for populating Norway and the US. 46.000 hits in 6 weeks, not bad!

I’m still looking for a Google Maps implementation that would not have the limitations of 100 markers per page. If you hear of any such implementation of the Google Maps API, or even suspect you may have found one, please let me know and I will investigate!

Update: Norway and US…

13 Feb

Scott and Harald have been really busy at it, and there’s a ton of additional projects on the World of Fiber map. Unfortunately, Google Maps has its limitations, and one of them is that it will only accept ~100 markers on a given map. In order to see the newest additions, you need to scroll all the way down to the bottom left hand corner window (listing each pin by name) and click on Next or Suivant at the bottom.

Updates: USA and Africa

7 Feb

If you check out the World of Fiber map, you will see that a considerable number of US projects have been added (Verizon FiOS, ATT U-Verse and muni-fiber projects) as well as a couple of projects in South Africa and Mauritius. That’s thanks to collaborator Scott Wilkinson, who also happens to host an excellent fiber resource, FTTx News.

I launched the WoF map a week ago, and Google tells me it’s hit the 30.000 visits mark last night. I’m stunned at the response. This is an ongoing project thoug, so don’t hesitate to forward it to whomever might be interested, send me additional info on projects that are either not mentioned or incomplete. And please rate the map. I don’t know how much that increases it’s visibility, but knowing Google, it’s likely it does.

Finally, should you want to link to the map from your blogs / web pages, it’s something you can do easily either by customising a link from the map itself or reproducing the "mini-banner" I’ve done for Fiberevolution. If you want the code, let me know.

Updates: USA and France

5 Feb

I have added the Seine et Marne project in France, and Danville, VA and Loma Linda, CA in the US. A number of collaborators have been designated, specifically for the USA and Norway.