ftth conference milan 2011 day 1 breakout session ftth voice of regulatory stephane lelux...
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FTTH Conference Milan 2011 Day 1 Breakout Session FTTH Voice of Regulatory Stephane Lelux DIFFRACTION ANALYSISTRANSCRIPT
MEASURING THE IMPACTOF INNOVATION IN FIBERDESIGN ON FTTH COSTSOF DEPLOYMENT
Stéphane Lelux, General [email protected]
Research sponsored by
Methodology
1
2
3
Interviews with Vendors and their Customers
Building a set of hypotheses for benefits
Applying the benefits to real-life deploymentscenarios
4 Analyzing the results
Benefits of Fiber Innovation in the Access
CompactnessLatest Innovation in fiber core &
coatings allow for smaller diameterfiber with no quality loss
Some vendors markets fiberswith 200 micron diameters
as opposed to the standard 250.
Smaller diameter cableslead to a lower occupancy
in ducts.
LongevityLatest Innovation in fiber benda-bility & coating allows for more
future proof fiber
Using superior fiber today willmean no need for replacementwhen higher spectrum bands
are put in use.
Fiber is compatible with1625 band
(WDM in Access)
LowerAttenuation
Innovation in fiber core production,bendability & coatings allow for
fiber with lower attenuationLonger reach for the fiber.
More customers can beconnected to a
given central office
Nature of Innovation Consequence Theoretical Impact
Model and Hypotheses
• Tactis and Diffraction Analysis modelled the cost of deployment in three areas of France:Inner-City Marseille (dense urban), Chennevières (suburban) and the Jura region (rural) forroughly 7500 homes in each case.
• The models are based on accurate geo-mapped data and duct occupancy information fromactual field surveys. They include the costs of a double backhaul route.
• In the model, the base scenario applies when regular fiber is used, the high quality scenarioapplies when innovative fiber designs are used.
Mod
el
• Compactness: 20% smaller cables lead to lower duct rental costs overall and lower need fordigs when duct space is not available.
• Longevity: Base model assumes 20% of fiber needs to be replaced after 15 years (5% and 50%also tested) . Using high quality fiber brings this down to 0%.
• Attenuation: Attenuation performance is comparable or better than standard fiber designsdespite improved compactness or higher bendability. H
ypot
hese
s
In order to establish a level comparison basis, all costs and gains wereactuated over the life of a project (25 years with a 12.5% WACC)
Model #1: Marseille
• On 87% of the route, one Ø 45 duct is freeand available. On the remaining 13%, at least 2Ø 45 ducts have 50% space available.
• On the overall route, 23.7km require a single720 fiber cable at most and will run in existingduct space and 2.5km require more than one720 fiber cable.
• Of these 2.5km, existing duct capacity isenough to cover 1.3km. Digging is required forthe remaining 1.2km.
• Using cable with 200 micron fiber instead of250 micron, an additional 0.6km of existingducts can be used, requiring only a 0.6km dig.
• Base scenario horizontal deploymentcost (25 yr actuated): 349k€
• 25 year actuated CAPEX savings fromusing high quality fiber: 59k€ (17%)
CAPEX
• Base scenario: Annual rent cost fromincumbent 144k€/year
• 25 year actuated OPEX savings fromusing high quality fiber: 211k€ (21%)
OPEX
Model #2: Chennevières sur Marne
• On 100% of the route, one Ø 45 duct is free and available.
• On the overall route, 50.6km require a single 720 fiber cable and run in existing ductspace and 3.8km require morethan one 720 fiber cable.
• Of these 3.8km, existingduct capacity is enoughto cover 1.5km. Digging isrequired for the remaining2.3km.
• Using cable with 200 micronfiber instead of 250 micron, anadditional 1km of existingducts can be used, requiringonly a 1.3km dig.
• Base scenario horizontal deploymentcost (25 yr actuated): 644k€
• 25 year actuated CAPEX savings fromusing high quality fiber: 64k€ (10%)
CAPEX
• Base scenario: Annual rent cost fromincumbent 282k€/year
• 25 year actuated OPEX savings fromusing high quality fiber: 389k€ (21%)
OPEX
Model #3: Jura (52 towns & villages)
• Horizontal deployment is 119km buried and 544km aerial.
• Available duct space inthe buried section issufficient to accomodateall but 5m of cable.Those 5m require adig.
• Using cable with 200micron fiber instead of250 micron allows forthese 5m to be buriedusing existing ducts.
• Base scenario horizontal deploymentcost (25 yr actuated): 13 254k€
• 25 year actuated CAPEX savings fromusing high quality fiber: 0k€ (0%)
CAPEX
• Base scenario: Annual rent cost fromincumbent 2 831k€/year
• 25 year actuated OPEX savings fromusing high quality fiber: 536k€ (3%)
OPEX
Longevity
• Our basic longevity model assumes that 20% of the lines need to be replacedafter 15 years. The table below shows the isolated impact of longevity (ie. notthe cumulated impact of longevity and compactness.)
Marseille
Chennevières
Jura
25 YR ACTUATED GAIN
349k€362k€ 3.4%
Base High Quality %
634k€659k€ 3.8%
13 254k€13 861k€ 4.4%
0.9%
%
1.0%
1.1%
8.1%
%
9.1%
10.3%
5% re
plac
ed
50%
repl
aced
Introducing Cost
• Using these new fiber designs has an added cost compared to using standardfiber. It’s not possible to point to an exact cost differential, but our estimatebased on interviews is 10-20% increase on the cost of fiber.
• For clarity’s sake, we modelled a surcharge of 2€ per linear meter per cable.
Marseille 49k€
Chennevières 97k€
Jura 185k€
25 YR ACTUATEDSURCHARGE
Putting it all together
17% 15% 3%
8.9€ 6.8€ 1.4€
% gain
gain / linear meter
A Few Conclusions
• Using the new generation of fiber has a clear financial impact on cost ofdeployment in urban and suburban deployments. The impact in ruraldeployment is much more limited as most of the deployment is aerial.
• Using France as a playground may be minimising some of the impactavailability of ducts in France is significant. Countries where less ducting isavailable might see a more significant impact. Variance may also be driven bydifferent wholesale pricing models for duct access.
• Our model assumes the fiber route is the same in the base and the highquality scenarios. In some instances, it might be possible to optimise routes onthe basis of lower occupancy in particular with increased impact.
•Our model only looks at the direct impact of the fiber, not at cable innovationwhich would certainly also have positive impacts:
• Connectorized fiber cables• Extractible cables
ThankYou!