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Some insights in regulation and potential profitability off passive fiber infrastructure in Europe

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  • Verbrugge, Sofie
  • Van der Wee, Marlies
  • Fernandez-Gallardo, Maria
  • Dobrajs, Kristaps
  • Pickavet, Mario

Abstract

In 2010, the European Commission has formulated some clear objectives to come to one single European telecommunications market by 2020 in its Digital Agenda. These objectives require large investments in new infrastructure. Optical access networks can cope with the high bandwidth required by future applications, but their deployment to the end user involves high road and construction works and costs, which seem only affordable in densely populated areas. Therefore, other investment paths and possible regulatory interventions should be explored. This paper describes a cost-benefit model, developed within the European research project OASE, for the deployment of a dark fiber infrastructure. The model is applied to specific scenarios, which are constituted of the area type (dense urban/ urban/rural), demand uptake (conservative/ likely/ aggressive) and revenue scheme. The quantitative analysis performed indicates that the business case is in most cases not economically viable. Therefore, as a second step, the paper investigates possibilities and opportunities to improve the business case of the PIP, for instance by prolonging the planning horizon, ensuring revenue from the start of the project by performing demand aggregation or examining where public funds might help.

Suggested Citation

  • Verbrugge, Sofie & Van der Wee, Marlies & Fernandez-Gallardo, Maria & Dobrajs, Kristaps & Pickavet, Mario, 2012. "Some insights in regulation and potential profitability off passive fiber infrastructure in Europe," 19th ITS Biennial Conference, Bangkok 2012: Moving Forward with Future Technologies - Opening a Platform for All 72530, International Telecommunications Society (ITS).
  • Handle: RePEc:zbw:itsb12:72530
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    Keywords

    Next-Generation Access Networks; Passive Infrastructure; European regulatory policy; cost-benefit analysis;

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