nextgen 2011 crister mattson acreo
DESCRIPTION
NextGen Conference Bristol 15 Nov 2011TRANSCRIPT
17/11/2011 # 1 Part of Swedish ICT
crister. [email protected]
Socio-economic impact of FTTH in Sweden
17/11/2011 Crister Mattsson Acreo
17/11/2011 # 2 Part of Swedish ICT
44 per cent of all households and businesses in Sweden have access to at least 100 Mbps broadband 34 % of the homes have possibility to connect to fiber
Fiber coverage 0- 83 % 40 municipal. have less than 1 %.
17/11/2011 # 3 Part of Swedish ICT
Business Models
Single Operator
OPCO
NetCo
RSP
RSP
RSP
Netco
OPCO
RSP
RSP
RSP
Netco
OPCO
OPCO
OPCO
RSP
RSP
RSP
Traditionel
17/11/2011 # 4 Part of Swedish ICT
Urban Networks with competition
85
74
63
45
10
20
30
40
50
60
70
80
90
2010200820062004
Procen
t
År
Per
cent
Year
17/11/2011 # 5 Part of Swedish ICT
17/11/2011 # 6 Part of Swedish ICT
Do we need Fiber ?
17/11/2011 # 7 Part of Swedish ICT
17/11/2011 # 8 Part of Swedish ICT
17/11/2011 # 9 Part of Swedish ICT
Investment decisions
Roll out cost
Telco
roi Roll out cost Telco
return
Un-captured
values
yes No, but should be yes
17/11/2011 # 10 Part of Swedish ICT
increased use of
ICT servic
es
Competition betwe
en SPs
reduced
forced migrati
on ICT
competenc
e HR pool
Ease to do business
FTTH deployment
Very high access speed
New infrastructur
e
Direct economic
activity True cloud computing HD and
3D TV VoD
Videoconf
Telepresenc
e E-
health E-government
Logistics, prod, manageme
nt
Sensor
networks
Democracy strengthene
d
transparenc
y in PA
efficiency
in PA
Distance
working
reduced
traffic congestion
Network
gaming
Dev. of
new technologie
s
Customers for
new servic
es
corruption
discourage
d
lower publ
spending
higher tax
revenue
productivity
learning
curves
lower
prices
for services
lower
entry
barriers
low upfro
nt investment for NP and SP
Functional
separation
new business
model possible highe
r employme
nt
Virtual labour mobili
ty
entrepreneurs
hip
e-learni
ng
Profitability of NP and SP
Profitability
Of PIP
RoW revenues
reduced ènvironment
impact
GDP
lower burde
n of
bureaucrac
y
Perceived
quality
of life
Video surveillance
Power grid
efficiency
New ICT and traditional companies
New/better services
Education
quality and cost
ICT Maturit
y: digital natives
Increased
market
value
17/11/2011 # 11 Part of Swedish ICT
Is it possible to calculate the value of broadband for the society ? • Cost for Ftth deployment
• Effects of the Investment
17/11/2011 # 12 Part of Swedish ICT
o Boundary conditions: • Cost dependent on time, learning curves, technological
developments, regulation, etc. • Passive infrastructure dominates upfront investment
• Active equipment dependent on technology choice, is dominated by opex and needs to be installed/upgraded whether fibre or copper is used
o Hence, assumptions: • Indicative average cost figures from the industry; no
considerations on inflation and cost of capital, calculations in SEK 2011
• Passive infrastructure only
Cost of FTTH deployment
17/11/2011 # 13 Part of Swedish ICT
o How: fast-deployment scenario • Year 1: 40% • Year 2: 30% • Year 3: 20% • Year 4: 10%
o What: all households not yet connected • 18 kSEK (€2000) to connect a SDU • 10 kSEK (€1100) to connect a household in a MDU • 30% home connected in 2011
o 39 billion SEK (€4.2 billion) o source: PTS, companies active in FTTH installation in Sweden
Cost of FTTH deployment
17/11/2011 # 14 Part of Swedish ICT
• calculated year by year, 1–5 years:
o economic activity directly related to construction Method: input-output multiplier approach
Source: Katz et al. for broadband upgrade in Germany
Return on investment
17/11/2011 # 15 Part of Swedish ICT
o savings in the municipal and regional-government costs for data and telecommunications:
• Around 50% savings when FTTH is deployed Sources: Stockholms kommun, Jönköpings kommun, IT
Norrbotten , Stockholms län • Yearly cost conservatively estimated to 1.5 billion SEK; • Total savings around 540 million SEK (€59 million)
yearly at full deployment Method: linear extrapolation (first-order approximation)
Return on investment
17/11/2011 # 16 Part of Swedish ICT
o increased GDP due to increased employment • Short-term effect can actually be measured • Data for all of Sweden’s 290 municipalities
Method: multivariate regression analysis
Sources: SCB, PTS
Return on investment
17/11/2011 # 17 Part of Swedish ICT
o added value for end users • Proxy available: agreement between tenant association and
housing companies on increased value of apartment • 46 SEK per household connected • 1.6 billion SEK (€175 million) per year
Method: extrapolation of rates
Return on investment
17/11/2011 # 18 Part of Swedish ICT
Other effects… o Enhanced population growth is also quantified, but is not
translated in terms of economic returns. o Longer-term induced effects harder to measure as of today
Causality was taken care of by introducing a time delay between fibre deployment and observed effects
Return on investment
17/11/2011 # 19 Part of Swedish ICT
ROI on FTTH investment
Summing up the effects analysed in the pre-study o Direct ROI at year t
o Indirect- and induced-effect ROI at year t
o Total ROI at year t
17/11/2011 # 20 Part of Swedish ICT
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
år 1 år 2 år 3 år 4 år5
AVKASTNING
INVESTERING
17/11/2011 # 21 Part of Swedish ICT
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
år 1 år 2 år 3 år 4 år5
"IND. AVK."
"DIREKT AVK."
17/11/2011 # 22 Part of Swedish ICT
0
10000
20000
30000
40000
50000
60000
70000
år 1 år 2 år 3 år 4 år5
"ACK. AVKASTNING"
"ACK. INVESTERING"
17/11/2011 # 23 Part of Swedish ICT
In Suburban Stockholm, the municipal
Sundbyberg have 83 % fiber Arvidsjaur ( small municipal.) in remote north of
Sweden have 67 %.
17/11/2011 # 24 Part of Swedish ICT
Conclusions Increased fiber penetration gives significant impact
on severel indicators as population and employment
Municipalities and regions can lower the costs for
communications We need the champions MDU are drivers