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Gabrielle Gauthey, Senior Vice President Public Affairs Alcatel-Lucent presented at NextGen 09 in Leeds on 16 and 17 November 2009
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Gabrielle Gauthey – Senior Vice-President Public Affairs
Leeds - November 17, 2009
NGAs : which public policies tofoster investmentsand accelerate deployments?
2 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
Summary
Very High Speed broadband market overview
Broadband policies and local authorities intervention in France
Next generation Access networks policies and regulation
Next Generation Access networks & public/private initiatives
© Alcatel-Lucent 2009 All Rights Reserved3 | NGA policies & Public Private Partnerships | November 2009
Very High Speed broadband marketoverview1
© Alcatel-Lucent 2009 All Rights Reserved4 | NGA policies & Public Private Partnerships | November 2009
Very High Speed broadband is a booming market
A market of 140 million subscribers in 2014 (vs. 31 million in 2008)
Western Europe on a par with North America with more than 20 million residential subscribers
A great opportunity for Europe
Source: IDATE – September 2009
Growth of FTTH/B* and VDSL** subscribersaround the world between 2008 and 2014
Number of residential subscribers worldwide
* Fiber-to-the-home (FTTH) et Fiber-to-the-building (FTTB)** Fiber-to-the curb (FTTC) et Fiber-to-the-node (FTTN)
© Alcatel-Lucent 2009 All Rights Reserved5 | NGA policies & Public Private Partnerships | November 2009
34%
66%
VDSL FTTH/B
Figures on Very High Speed broadband in Western Europe
FTTH/B are the prevailing architectures for Very High Speed broadband in Western Europe
6 countries represent 81% of the installed base
Very High Speed deployments per types ofarchitecture – end of 2008
Number of FTTH/B subscribers in keyEuropean countries – end of 2008
Sweden Italy France Norw ay Netherlands Denmark
Source: IDATE and FTTH Council Europe
66 %
34 %
32 %
24 %9 %
14 %14 %
7 %
© Alcatel-Lucent 2009 All Rights Reserved6 | NGA policies & Public Private Partnerships | November 2009
European FTTH market breakdown : the weight of municipal networks in access
Note:FTTH (Fiber-to-the-Home) = fiber to the boundary of the home living space or business office space(FTTH Council definition)ILEC = former incumbent monopoly telco (PTT)CLEC = competitive or alternative telco or broadband providerMuni/Utility = network built by municipal local authority or by a power utility
Sources: IDATE & Heavy Reading, 2008
FTTH market shares in Europe:
0.0%
20.0%
40.0%
60.0%
80.0%
2007 8.5% 21.4% 70.2%
2012 43.0% 23.0% 34.0%
ILEC CLEC Muni/Utility
According to forecasts, municipalities and power utilities will still have - in WesternEurope - 1/3 of fiber access market share by 2012
© Alcatel-Lucent 2009 All Rights Reserved7 | NGA policies & Public Private Partnerships | November 2009
Broadband policies and local authoritiesintervention in France2
8 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
The key drivers of a successful Broadband policy in France
Competition through active infrastructures has been the main driver behindthe development of broadband:
Geographic extension of local loop unbundling has encouraged France Telecom toequip all of its MDF (Main Distribution Frames) for ADSL
France has joined European leaders in terms of penetration…
…and is in first place for "triple play"
Three major drivers have made this increase in investments possible
Dynamic operators, both incumbent and new entrants
Regulation : LLU first, bitstream as a complement
Local authorities intervention has been crucial in the expansion of broadband coverage
9 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
Dynamic of the French broadband market
Growth of the broadbandaccess base
2002 2003 2004 2005 2006
24M
b/s
8M
b/s
1M
b/s
512kb
/s
1st TV/DSL offer
1st telephony/DSL offer
1st fixed-mobileConvergent
offer
ADSL ADSL2+
Evolution of broadband technologies and services
1st broadband/DSL offer
1999…
DSL coverage as of June 30 2009
2007 2008/2009
FTTH
100 M
b/s
1st Very high speed FTTH offer
10 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
French local authorities have played a crucial role in Broadband coverage
In recent years, local authorities have played a key role in the digitaldevelopment of their regions in partnership with operators
Arcep first impact assessment: 86 projects – 53 of which are running
2 billion € invested
Major consequences : Less expensive coverage of rural areas
Expansion of LLU
Fostering of local operators
Vendée
Py rénées-Orientales
CU Bordeaux
CA Bay onne Anglet Biarritz
CA Perigueux
CU Grand Toulouse
CA Aix en ProvenceCA Aix en Provence
CA Rennes Métropole
CA Tours
Régie du Pay s chartrain
CA Seine EureCA Seine EureCA Seine EureCA Seine EureCA Seine EureCA Seine EureCA Seine EureCA Seine EureCA Seine Eure SI Sipperec (CPL)SI Sipperec (CPL)SI Sipperec (CPL)SI Sipperec (CPL)SI Sipperec (CPL)SI Sipperec (CPL)SI Sipperec (CPL)SI Sipperec (CPL)SI Sipperec (CPL)
SI Sipperec (Irisé)
SAN Sénart (Ville Nouv elle)
CA Amiens
CU ArrasCU ArrasCU ArrasCU ArrasCU ArrasCU ArrasCU ArrasCU ArrasCU Arras
CU DunkerqueCU Dunkerque CA Valenciennes
CA Le Hav reCA Caen la MerCA Caen la MerCA Caen la MerCA Caen la MerCA Caen la MerCA Caen la MerCA Caen la MerCA Caen la MerCA Caen la Mer
CA Quimper
CA Vannes
CA Angoulême
SM Belfort Montbelliard HéricourtSM Belfort Montbelliard Héricourt
CU Le Creusot Montceau
CA Chalon Val de Bourgogne
CA Clermont FerrandCA Clermont FerrandCA Clermont FerrandCA Clermont FerrandCA Clermont FerrandCA Clermont FerrandCA Clermont FerrandCA Clermont FerrandCA Clermont Ferrand
CA Sicov alCA Sicov alCA Sicov alCA Sicov alCA Sicov alCA Sicov alCA Sicov alCA Sicov alCA Sicov al CA Castres Mazamet
CA Pau
Val-d'Oise
Essonne
Seine-Maritime
Eure
Seine-et-Marne
Yv elines Meurthe-et-Moselle
Somme
Moselle Manche
Côtes-d Armor Finistère
Charente-Maritime
Jura
Loire
Py rénées-Atlantiques Haute-Garonne
Tarn
CR Aquitaine
CR Bretagne Calv ados
Haute-Marne
Orne
CA Voiron
Ardèche
Ardennes
Ariège
Av ey ron
Cher Doubs
Gard
Hérault
Ille-et-Vilaine
Indre
Loiret
Lot
Lot-et-Garonne
Maine-et-Loire
Haute-Marne
Meuse
Nièv re
Oise
Bas-Rhin
Haut-Rhin Sarthe
CR Bourgogne
CR Alsace
CR Limousin CR Auv ergne
CR Corse
Réseaux d'initiative publique à fin juillet 2008
(projets couvrant plus de 60.000 habitants)
GUADELOUPEGUADELOUPEGUADELOUPEGUADELOUPEGUADELOUPEGUADELOUPEGUADELOUPEGUADELOUPEGUADELOUPE
GUYANEGUYANEGUYANEGUYANEGUYANEGUYANEGUYANEGUYANEGUYANE
MARTINIQUEMARTINIQUEMARTINIQUEMARTINIQUEMARTINIQUEMARTINIQUEMARTINIQUEMARTINIQUEMARTINIQUE
REUNIONREUNIONREUNIONREUNIONREUNIONREUNIONREUNIONREUNIONREUNION
Oise
Seine-et-Marne
Yvelines
Hauts-de-Seine
Val-d'Oise
Marchés de services départementaux
Hors DOM
4) Offres commercialisées (4)
Projets infra départementaux L.1425-1
Hors DOM
1) Etudes préalables (3)
2) Appel public à candidatures (5)
3) Délégataires retenus (14)
4) Offres commercialisées (10)
Projets départementaux L.1425-1
Hors DOM
1) Etudes préalables (10)
2) Appel public à candidatures (7)
3) Délégataires retenus (14)
4) Offres commercialisées (11)
Projets régionaux L.1425-1
Hors DOM
1) Etudes préalables (3)
2) Appel public à candidatures (0)
3) Délégataires retenus (2)
4) Offres commercialisées (2)
11 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
Impact of local authorities backhaul networks on unbundling in France
913
773
988
CO unbundling : alternativecarriers backhaul networks
CO unbundling : alternativecarriers backhaul networks+ France Telecom darkfiber rental
CO unbunling : localcommunity backhaulnetwork
14,4 M households
2,4 M households
4,0 M households
20,9 M households
Number of unbundled CO’s according to backhaul network ownership
37% of French central offices are unbundled throughLocal Communities backhaul networks
12 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
Open Wireline backhaul networks are key to handle both mobile and fixedaccess traffic growth
Typical telecommunications network architecture
Role of backhaul networks:
Cost effective coverage ofmedium and low density areas;
Stimulate competition andinnovation – on DSL first and fibrenext;
Anticipate bandwidth demandincrease for all accesstechnologies (fibre, LTE,Wimax,…);
Backhaul networks are futureproof investments - can be easilyfunded through PPPs;
Enhanced connectivity forpublic services (schools,hospitals, universities,…) andbusiness parks
© Alcatel-Lucent 2009 All Rights Reserved13 | NGA policies & Public Private Partnerships | November 2009
Next generation Access networkspolicies and regulation3
14 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
Which competition model for NGA ? How to promote investments?
No doubt Very High Speed broadband is the technological evolution in the medium term
To meet growing demand for content
To assist the concomitant rise in speeds
All countries are facing the challenge. Some are ahead like Japan and the US. In the EUmajor players have announced fiber deployments
Investments are huge – 10 to 20 times copper broadband - and will need to be spread overseveral years
Several hundred euros per connectable home
Investments will happen differently according to country specificities and legacynetworks topography (FTTN, FTTH)
The questions are:
How to promote investments and allow reasonable return?
How to adapt regulation and public intervention to market, risk and policy driven areas?
How to prevent regression of competition and even foreclosure of the market?
15 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
NGA deployments : investment model according to geographical segmentation
Private investments will prevail in “market driven” whereas public
intervention will be needed in low density “policy driven” areas
16 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
Europe trends for NGA roll-out :Public Policy levers to foster NGA investments and PPPs
Legislative lever in many countries (France, Spain, Italy, Portugal, …)
Sharing of the fiber last drop through mandatory agreements between operators and landlords
“right to fiber”
Mandatory fiber pre-cabling for new buildings
Regulatory lever
Regulator’s concern is to make sure competition is preserved on the active part of the network tostimulate differentiation and innovation
Asymmetrical regulation (duct access)
Symmetrical regulation (last drop and in house wiring)
Bitstream as a complement in low density areas
Public policy lever
Economy recovery package
Digital Economy plans
Intervention of local authorities (PPPs)
17 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
How to encourage investments and competition throughactive infrastructures while tackling economical and operational concerns?
The last drop : an essential infrastructure- but where from?
Sharing of in-house wiring at the level of the building and access to ducts alone will not besufficient to guarantee sustainable competition in low density areas:
it is useless and too costly to roll out serial networks inside and towards each building
the natural monopoly is not limited to the fiber within the building
risk of an irreversible situation
Having a point of sharing higher up in the network raises a few issues :
in terms of technology, it has to be compatible with different technologies : PON and point-to-point
the physical location of the point of sharing depends of the topography, of the density and of the architecture of theoperator’s network
ducts ducts
point of sharing higher up in thenetwork
availability of ducts offer
copperSC
copperMDF
© Alcatel-Lucent 2009 All Rights Reserved18 | NGA policies & Public Private Partnerships | November 2009
NGAs & public/private initiatives4
19 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
How to combine public and private initiatives? Transition from broadband to Next Generation Access networks is a revolution
which represents a dramatic change in the level of investments: 250 to 300 B€will be required to roll-out NGA in the EU, 23 B€ in Australia.
Risk of broadening the digital gap between regions is high and this is why manynations have decided to put this issue high on their recovery agenda and digitaleconomy plans.
From a policy perspective the key driver of NGA success is a close collaborationbetween all stakeholders -incumbents and new entrants, national and localgovernment, vendors and users.
From an NGA investment perspective, Public Private Partnerships are gainingworldwide traction both at national and local level if they allow : Anticipation of the future by rolling-out of backhaul capacities
Cost-effective roll-outs in lowering market entry barriers, preserving diversity and innovation
More competition and differentiation
Acceleration of NGA coverage in grey and white areas
20 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
South Yorkshire Digital Region
SYDRThales, Alcatel-Lucent and KingstonCommunications
Alcatel-Lucent is the design authority
Alcatel-Lucent also responsible for allequipment, network management platformsOSS and majority of BSS, installation,commissioning, and maintenance of thenetwork
54 exchange sites, 1589 Street Cabinets
VDSL based, but with 1,200 km of fibre(700km new dig)
Multiple Service Providers to the same enduser
“Businesses in South Yorkshire will be able to increase their competitiveness, develop new productsand business models and use IT in a variety of different ways as a result of this initiative – somethingwe can be proud of as a catalyst for this project.” Trevor Shaw, Executive Director of Finance forYorkshire Forward
one of the largest public sector-led openbroadband infrastructure initiatives in theworld.
Covering the urban and rural populations ofSheffield, Doncaster, Barnsley and Rotherham
a brand new, high speed open-accessinfrastructure
Covers majority of homes and businesses inthe region - some 1.2 million people.
21 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
The Baltic Business Quarter – a model for the future for Gateshead Council
Gateshead technology innovation
A unique business model for the UK
Designed from the start to give the highest
levels of built-in resilience
Capable of offering flexible and tailored
services
Fair and open access to all service providers
A compelling business case for everyone
The BBQ network to operate as an Open Access
Network & to provide last mile backhaul
services
“The launch of this new partnership is an exciting and ground breaking stepforwards in our continuing drive to bring more top quality businesses andjobs to Gateshead” Councillor Mick Henry, Leader of Gateshead Council
Alcatel-Lucent to deploy a blown fibresolution to link individual buildings
Services with bandwidths of up to 10Gb/savailable within the business park and up to2.5Gb/s off park
22 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
Overview of Recovery, Digital Economy plans & Public Private initiativesworldwide
Greek FTTH Public-Private Partnership
2.1 B€ investment
Target : 2 million homes passed by 2012
Digital Britain
•2 Mb/s universal broadband access service in 2012
•200 M£ NGA fund is created to speed-up deployments
Italian broadband plan
800 M€ to be allocated to achieve broadband coverage in Italy
French digital plan
750 M€ will be invested by CDC to roll-out shared optical loops
+ German BB plan and coming bradband plans in Poland,Russia,...
China’s recovery plan
4 Trillion RMB 09-10
ICT included in pillar industries program
Australian National Broadband Network
100 MB/s to 90% of subscribers
43 B A$ ( 23 B€)
New Zealand “Broadband Investment Initiative”
1.5 B NZ$ investment plan announced in March09
American Recovery and Reinvestment Act
7.4 B $ to provide broadband to rural,unserved and underserved areas
4.5 B$ for electric grid modernization(“smart grids”)
2 B $ for health IT programs
29 B $ for transportation programs(highways safety, fraffic monitoring,...)
EU recovery planAchieve 100% broadband coverage in EU by 2010
1 B € earmarked for rural broadband
Creation and/or upgrade of access, backhaul and passiveinfrastructure
23 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved
www.alcatel-lucent.com
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