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All Rights Reserved © Alcatel-Lucent 2009Alcatel-Lucent Special Customer Operations
Gabrielle Gauthey – Senior Vice-President Public Affairs
Global Industry Leaders Forum (GILF)
Beirut November 9th 2009
Universal Access Policies toConnect the Unconnected
All Rights Reserved © Alcatel-Lucent 2009•2 | GILF Beirut | Nov 9 , 2009
How to connect the unconnected?
Fixed voice universal service
Mobile voice (2G) universal service
3G and beyond
Fixed broadband universal access policies
Next Generation Access networks
Wrap up
All Rights Reserved © Alcatel-Lucent 2009•3 | GILF Beirut | Nov 9 , 2009
Fixed Voice Universal Service funding
Universal Service Fund, a cost-effective universal access solution for voice• Cost includes : tariff compensation, geographic equalization, public phones, social tariffs,
directories. Total cost is reduced by immaterial advantages.
0
50
100
150
200
250
300
1998 2000 2002 2004 2006 2008
Total US net cost in M€
Source Arcep Oct 2009
All Rights Reserved © Alcatel-Lucent 2009•4 | GILF Beirut | Nov 9 , 2009
Mobile voice universal access : how to best achieve 2G coverage?
#1 : encourage coverage commitments when licensing spectrum
#2 : introduce coverage requirements when renewing licences
• e.g. 98% of population, coverage of transportation infrastructures;
#3 : achieve white zones coverage• where no operator is present…• through public funding;
#4 : foster competition in white and grey zones
• through private agreements and funding…• infrastructure sharing…• roaming agreements
White zones in Blue
Mobile Coverage
% Population
% Territory
White zones
Grey zones – 1 operator
Grey zones – 2 operators
Black Zones – more than 2 operators
Source : Arcep Report on Mobile Services – August 09
All Rights Reserved © Alcatel-Lucent 2009•5 | GILF Beirut | Nov 9 , 2009
3G and beyond : mobile services universal access?
Include coverage obligations in the licensing process and monitor its effectiveness• e.g. in France 99.3% for SFR, 98% for Orange and 75% for Bouygues
Telecom
Manage spectrum allocation (lower bands allocation)• 3G - 900 MHz refarming• LTE – 800 MHz Digital dividend allocation + 2.6 GHz
Push for active infrastructure competition for both 3G and LTE• infrastructure (pole, masts) sharing• Improvement of backhauling capacity through public/private
partnerships
All Rights Reserved © Alcatel-Lucent 2009•6 | GILF Beirut | Nov 9 , 2009
The key drivers of a successful Broadband universal access policy
Competition through active infrastructures has been the main driver behind the development of broadband:
• Geographic extension of local loop unbundling has encouraged France Telecom to equip 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
All Rights Reserved © Alcatel-Lucent 2009•7 | GILF Beirut | Nov 9 , 2009
Dynamic of the French broadband market
Growth of the broadband access base
2002 2003 2004 2005 2006
24M
b/s
8M
b/s
1M
b/s
512
kb/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
Mb/s
1st Very high speed FTTH offer
All Rights Reserved © Alcatel-Lucent 2009•8 | GILF Beirut | Nov 9 , 2009
Open wireline backhaul are key to handle both mobile and fixed access traffic growth
Typical telecommunications network architecture
Role of backhaul networks:
Cost effective coverage of medium and low density areas;
Stimulate competition and innovation;
Anticipate bandwidth demand increase for all access technologies (fibre, LTE, Wimax,…);
Future proof investment for local authorities;
Enhanced connectivity for public services (schools, hospitals, universities,…) and business parks
All Rights Reserved © Alcatel-Lucent 2009•9 | GILF Beirut | Nov 9 , 2009
Local Authorities have played a crucial role in Broadband coverage
• In recent years, local authorities have played a key role in the digital development 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 départementauxHors DOM
4) Offres commercialisées (4)
Projets infra départementaux L.1425-1Hors DOM
1) Etudes préalables (3)2) Appel public à candidatures (5)3) Délégataires retenus (14)4) Offres commercialisées (10)
Projets départementaux L.1425-1Hors DOM
1) Etudes préalables (10)2) Appel public à candidatures (7)3) Délégataires retenus (14)4) Offres commercialisées (11)
Projets régionaux L.1425-1Hors DOM
1) Etudes préalables (3)2) Appel public à candidatures (0)3) Délégataires retenus (2)4) Offres commercialisées (2)
All Rights Reserved © Alcatel-Lucent 2009•10 | GILF Beirut | Nov 9 , 2009
Impact on unbundling
913
773
988
CO unbundling : alternative carriers backhaul networks
CO unbundlig : alternative carriers backhaul networks + France Telecom dark fiber rental
CO unbunling : local community bakchaul network
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 through Local Communities backhaul networks
All Rights Reserved © Alcatel-Lucent 2009•11 | GILF Beirut | Nov 9 , 2009
Which competition model for NGA ? How to promote investments and universal access?
No doubt very high bandwidth 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 EU major players have announced fibre deployments
Investments are huge – 10 to 20 times copper broadband - and will need to be spread over several years
• several hundred euros per connectable home• Investments will happen differently according to country specificities and legacy networks
topography (FTTN, FTTH)
The questions are :
• How to promote investments beyond dense areas from start and allow reasonable return?• How to avoid useless duplication of non-essential infrastructures in reduced dense areas? • How to adapt regulation and public intervention to ensure universal access and avoid
increasing risk of digital divide?
All Rights Reserved © Alcatel-Lucent 2009•12 | GILF Beirut | Nov 9 , 2009
NGA universal access : investment model according to geographical segmentation
All Rights Reserved ©Alcatel-Lucent 2008, XXXXX
Investment Model %
Investment model according to geographical segmentation
Socio-economic impact of fiber HighLow
Market Driven Policy DrivenRisk Driven
Stockholm
Dense city
Lindefallet
Village
Kilafors
JönkopingMedium-size town
Hudiksvall
Small town
Retail Services(residential, public & business)
Active Network(network equipments,
business & operation support)
Passive Infrastructure(trenches, ducts, fibre, labelling, pre-cabling)
Public
Private
Private investments will prevail in “market driven” whereas public
intervention will be needed in low density “policy driven” areas
All Rights Reserved © Alcatel-Lucent 2009•13 | GILF Beirut | Nov 9 , 2009
Europe trends for NGA roll-out : Public Policy levers to foster NGA investments, coverage 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 to stimulate differentiation and innovation
• Asymmetrical regulation (duct access)
• Symmetrical regulation (last drop and in house wiring)
Public policy lever • Economy recovery package
• Digital Economy plans
• Intervention of local authorities (PPPs)
All Rights Reserved © Alcatel-Lucent 2009•14 | GILF Beirut | Nov 9 , 2009
Overview of Recovery, Digital Economy plans & PPPs worldwide
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
•Local Communities involvement in low density areas
Italian broadband plan
800 M € to be allocated to achieve broadband coverage in Italy
French digital plan
750 M€ will be invested by Caisse des Dépôts et Consignations 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 March 09
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 plan Achieve 100% broadband coverage in EU by 20101 B € earmarked for rural broadbandCreation and/or upgrade of access, backhaul and passive infrastructure
All Rights Reserved © Alcatel-Lucent 2009•15 | GILF Beirut | Nov 9 , 2009
US Broadband Funding via the“American Recovery and Reinvestment Act” (ARRA ) – Rural & Verticals
NTIA:
Broadband Technology Opportunities Program (BTOP)
Dept. of Commerce - $4.7 B to provide BB to un-served and underserved areas.
RUS (Rural):
$2.5 B to provide loans, loan guarantees, grants. At least 75% of each project‘s territory must be rural w/o BB
•Energy projects (4.5B$),
•Health IT (2B$),
•Transportation (29B$),
•Public Safety
NTIA Funding Breakdown
Source: Educase 2009
All Rights Reserved © Alcatel-Lucent 2009•16 | GILF Beirut | Nov 9 , 2009
Australia and New Zealand PPP projects
Australian “National Broadband Network” PPP project announced April 09
– 100 Mb/s (FTTH technology) to 90% of Australian broadband subscribers and min 12 Mb/s for the remaining 10% of the population (DSL, HFC, Wireless technologies);
– A$ 43 B ( 23 B€) investment – network will be built, owned an operated by a PPP ( “NBN Corporation”) owned 51% by the Federal Government and 49% by private sector – spinoff to full private ownership foreseen within 5 years;
– “NBN Corporation” will act as a wholesale only company.
New Zealand “Broadband Investment Initiative” PPP launched March 09
– Government’s goal is to accelerate roll-out of ultrafast broadband to 75% of New Zealanders;
– Priority is given for the next six years to business users, schools, health services, greenfield developments and tranches of residential areas ;
– Government will invest 1.5 B $NZ alongside additional private sector investment.
All Rights Reserved © Alcatel-Lucent 2009•17 | GILF Beirut | Nov 9 , 2009
United Kingdom “Digital Britain”: public funding for universal access and NGA
Digital Britain final report (June 16 09)
• Universal broadband access by 2012
– 2 Mb/s Universal access will de delivered by a mix of wired and wireless technologies - 200 M £ public funding
• Creation of a fund for investment in the next generation of superfast broadband to ensure it is available to the whole country
– 50 pence monthly tax on all fixed copper lines - 150/175 M £ per year
• Accelerating current and next generation mobile coverage and services
– Push for a rapid transition to next generation mobile (4G) and universal 3 G coverage– Highly competitive mobile market
Ofcom Report on Superfast broadband (March 09)
• BT/Openreach receives green light to invest in NGA (mix of FTTN and FTTH in greenfield areas)
• Mandates BT/Openreach to offer wholesale bitstream with pricing flexibility
• No duct sharing for the moment
All Rights Reserved © Alcatel-Lucent 2009•18 | GILF Beirut | Nov 9 , 2009
Greece : € 2.1 B NGA PPP
• Governmental initiative launched en of 2007 with the objective to leapfrog traditional broadband and deploy very high speed connectivity in Greece :
– FTTH coverage target of 2 M households in 56 cities including Athens and Thesssaloniki;
– 2.1B€ investment budget within 2010-2017 for fiber passive infrastructure – PPP investment model
– PPP funding split : 700 M€ Greek State, 700 M€ European Investment Bank low-rate loan, 700 M€ private partners;
– PPP management will be granted to private partners for 30 years; – Project will be separated in 3 parts each part covering a distinct geographical
area of the country by a different PPP.
• Next steps – Public consultation and approval of the project by EU DG Comp in July 09– Legal framework to be adopted before end 09– PPP tender will be issued beginning of 2010
All Rights Reserved © Alcatel-Lucent 2009•19 | GILF Beirut | Nov 9 , 2009
France : PPP will be key for NGA roll-out
• France Numérique 2012 report (Sept 08) aims at transforming France in a “best in class” digital nation - 4 priorities:
– 100% broadband coverage ( min 512 Kb/s) and speed up very high speed network rollout– Development of digital content and service offer– Promotion and diversification of digital usages by citizens, enterprises and public
administration– Improvement of digital economy public governance
• 750 M€ from “Caisse des Dépôts” to foster NGA/PPP investments:
– Caisse des Dépôts et Consignations (state-owned investment bank )announced in June 09 a 750 M€ investment plan from 2009 to 2011 in shared optical local loops
– Private operators and local communities are likely to co-invest with Caisse des Dépôts in order to speed up deployments
• French State bond emission (“Grand Emprunt”) Sept 09
– Digital projects could be eligible to funds collected through the bond emission– A share of these funds may be allocated to fibre networks roll-out
• Green Light from the EU Commission to CG 92 FTTH SGEI is likely to unleash private and public investments in similar projects
All Rights Reserved © Alcatel-Lucent 2009•20 | GILF Beirut | Nov 9 , 2009
Key takeaways on Next Generation Access policies
• 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 many nations have decided to put universal access high on their recovery agenda and digital economy plans
• From a policy perspective the key driver of NGA success and universal access is a close collaboration between all stakeholders -incumbents and new entrants, national and local government, vendors and users
• From an NGA investment perspective, Public Private Partnerships are gaining worldwide traction both at national and local level as they allow :
– Anticipation of the future by rolling-out of backhauling 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
All Rights Reserved © Alcatel-Lucent 2009•21 | GILF Beirut | Nov 9 , 2009
“Connecting the unconnected” wrap up Universal Access Policies toolbox and levers : no « one size fits all » solution
Universal Service Funds• Easy to manage• Plain service : no major QoS issue or service differentiation • Price equalization mechanisms can be introduced• Cost decrease in the long run• Not the solution for broadband
Licensing incentives & agreements• Licensing lever : link spectrum granting to coverage commitments,
introduction of coverage requirements in new licences• Policy lever : Operators, Local Authorities and Regulators agreements
to provide mobile services in white areas (masts and poles sharing, roaming) and open backhauling
• Regulatory lever : passive infrastructure sharing, digital dividend spectrum allocation
Regulated wholesale offers & PPPs• Copper Regulation : LLU for service differentiation , bitstream as a
complement• Fibre regulation : asymmetrical (duct access) and symmetrical (last
drop)• Local authorities intervention (open backhauls, PPPs)
Fixed Voice
Mobile Voice & Services
Fixed Broadband &
NGAs
All Rights Reserved © Alcatel-Lucent 2009•22 | GILF Beirut | Nov 9 , 2009