FTTH Groupe E, competitor view

FTTH

Groupe E, competitor view

4th October 2010, Biel Claude Thürler, Groupe E

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Agenda

1. Introduction: who is Groupe E

2. Why Groupe E is doing FTTH project

3. Model «Fribourg Optique»

4. Business Model

5. FTTH Pilot project

a. Layer 1

b. Layer 2

c. Services

6. Business issues

7. Conclusion

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Groupe E regions and domains of activity

Production

Distribution

Energy Sales &

Services

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Utilities - large number of actors

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Groupe E, why are we doing this project ?

Télé-comptage Efficience énergétique Optimalisation distribution Petite production

décentralisée «««SmartgridsSmartgridsSmartgrids»»»

Energies

Acheminement Services

Groupe E would like to be close to

customer and provide new services:

• Energy efficiency services

• Automatic meter management and

meter reading

• Grid optimalisation

• Small and decentralized power

plant integration

Bidirectional communication is required

Why : maximized synergies

décentralisée «««SmartgridsSmartgridsSmartgrids»»»

Smartgrids

Common commodities

Coopération Model with incumbent

Model « Fribourg Optique »

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Cooperation model

FO Groupe E/Open access

FO Swisscom

Interconnexion Point

Common investments between partners Groupe E investments

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Market – basic principles

Both partners are able to provide openly Layer 1 services from central office or PoP (HV station)

Optical fiber prices are identical for all interested customers or partners

Both partners are able to provide openly Layer 2/3 services on each network

Cooperation governance principles are equal for partners Competition  Competition  No discrimination  No discrimination 

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Economical – basic principles

All reserved fiber, up to the interconnection point, are owned by both partners and could be commercialized jointly

Construction should always be realized at the best costs (economical construction depending of existing roll)

Vertical installations (indoor) are financed on a common based (contracts et costs) and are included on the basic Layer 1 service

Model respect expectation from Energy regulator (no cross-subventions)

Optical fiber prices (OTO to Manhole/Cabinet) are

identical overall Canton of Fribourg (city and rural) Customer fairly  Energy regulator No discrimination  No discrimination  Attractive price 

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Modèle de base : Fribourg Optique

BEP Manhole Cabinet POP Groupe E POP Swisscom OTO _{App. 1} App. 2 App. 3 App. 4 App. 5 Services OTO OTO OTO OTO OTO Fiber to Groupe E Fiber to Swisscom Common network (included first OTO)

Groupe E Network

Swisscom network

Swisscom offers

Groupe E / Open access offers

Câble inter POP

selon besoins Legend :

OTO : Optical Termination Outlet BEP : Building Entry Point POP : Point of Presence

I Page 13 I Services provider Generate bundles Sales of services Send bill Services distributor

Own the network

(Optical fiber, cables, …)

End customers

Enterprise and residential

Services producer

Generate each services to be sold or Distributed

Example: bundle of channels, VoD, Internet, VPN, network storage, …

Possible roles are multiples

End customers Providers Distributeur Pub Billing I Page 13 I

Quoi ? : Approches Wholesale&Retail

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Wholesale :

Retail :

We provide the access only: No content Target : partners (Telco, ISP, …) We provide access AND contents

Target : end customer Residential / Entreprise Groupe E • Internet • TV • Téléphony Groupe E Network Groupe E Customers Network Groupe E Customers S u n ri se V T X M y Ga te S e n se la n Ot h e rs …

Ho

w

to

addr

es

s

the

marke

t

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Actual business model with Groupe E

Wholesales approach

First analysis (tendencies) :

+ Investments costs respect + Processes and technology

+/- Cooperation Model (data exchanges complexity)

+/- Contents offers (exclusivity by incumbent only)

- Building acquisition (contract and process to be modified)

Offres :

Areas

FTTH Pilot projet

Neyruz

Torry

FTTH

Pilot

Project

Fribourg

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Services :

attractive offers

Internet

Télévision Téléphonie PRIX

MENSUELS

Choix offre

appels forfaitaire sur le réseau fixe européen Vario TV (8 HDTV / 100 chaines IP 30 MBit/s down et 1MBit/s up CHF 109.- par mois MYGATE TV (10 HDTV / 160 chaines IP) 30 MBit/s down et 3 MBit/s up

Choix offre appels forfaitaire sur le réseau fixe suisse CHF 99.- par mois Choix offre appels forfaitaire sur le réseau fixe européen 30 MBit/s down et 1MBit/s up CHF 89.- par mois 30 MBit/s down et 3 MBit/s up

Choix offre appels forfaitaire sur le réseau fixe suisse CHF 74.- par mois 30 MBit/s down et 3 MBit/s up

Choix offre appels sur le réseau fixe

suisse

CHF 69.- par mois

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Two type of realization : rural and city

Target is to valid most of technical et economical issues as well as the

commercial acceptance.

Neyruz: 300 flats Torry Fribourg: 1800 flats

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Layer 1: « BEP» installation

1 BEP type for

single house

1 BEP type for

buildings

Swisscom FTTH

Market: actual situation

Cablecom EBL

Swisscom Sunrise

VTX

Customer zone Groupe E

Coaxial access Copper access

Optical access FTTH Network Swisscom Wholesale Network CATV VTX Projet pilote I Page 25 I Groupe E FTTH Network Groupe E Wholesale

• Customers have choice between a few access networks • Swisscom can offer copper access or fiber access

• Groupe E can offer fiber access only

• Groupe E cannot migrate existing customers

SenseLAN MYGATE Groupe E

Business risks

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Competition with Swisscom wholesale ?

How to provide nationwide services (market size) ?

Minimal required market shares ?

Market capacity and maturity ?

Openaxs is mandatory !

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Swiss utility association to promote and develop open access FTTH

network

=> Groupe E is founding member

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Conclusions

Biggest issue is not technical but commercial … how to provide attractive contents and services to end

customers

Access network construction will always be local but services portfolio should be global or national

(openaxs) and synchronized between utilities

Large number of utilities in CH (almost 900 energy distributor) and complexity of solutions are reducing

Claude Thürler, Responsable unité télécommunication et systèmes [email protected], +41 26 352 52 51