Danish call for big-bang approach to fibre

The chairman of a Danish provider of direct-fibre-based triple-play services has called on Europe’s telecoms players to eschew standard fibre-to-the-home (FTTH) and VDSL solutions and commit to rolling out 10Gbps networks.

In the keynote speech at the FTTH Council Europe conference in Barcelona, ComX Networks’ Finn Helmer said that the 100Mbps and 50Mbps networks that operators and municipalities are rolling out across Europe will require constant upgrades to keep up with demand for bandwidth. As a result, investing in a FTTH network that can operate at more than 100 times those speeds could be a more cost-effective strategy than it immediately appears.

According to Helmer’s calculations, it would cost $7bn (Eur€5.4bn) to roll out 10Gbps fibre to Denmark’s 2.5 million households. In comparison, deploying a 50Mbps network using a combination of fibre-to-the-cabinet (FTTC) and VDSL would cost roughly half as much.

Helmer admitted, however, that such a large-scale project would require long-term commitment, as return on investment (ROI) can take up to seven years. At present, telecoms operators will rarely make investments where the window for ROI exceeds three years, he said.

Indeed, a number of delegates at the conference argued that direct-fibre networks require a new approach to investment and ownership.

An increasingly popular model consists of three layers: an infrastructure layer, funded by investors used to long-term projects such as real-estate firms; an operator layer, which provides access to the network; and on top, service providers that deliver the content to consumers.

Jaap Doeleman, a partner at Houthoff Buruma, which provided legal advice to Amsterdam Citynet, told conference participants that the significant private-sector investment in the project indicates that the model is a good proposition.

Floyd Wagoner, from Motorola’s wireless-access division, said that European regulation was inappropriate for fibre networks. Instead, he argues for regulation similar to that governing utilities.

This story first appeared on Telecoms.com’s sister pubklication, Telecom Markets, on Feb 13 07.