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Broadband Access
DigiWorld 2006: FTTH Costs Coming Down
‘Smarter’ Civil Works Helps Operators
by Ken Wieland
Delegates at the DigiWorld 2006 summit in Montpellier are
confident that the cost of rolling out FTTH will continue to
decrease, making the business case more attractive.
According to a Michael Kunigonis from Corning, a fibre
manufacturer, the cost per FTTH subscriber was US$2,000 two
to three years ago. “That is now just under US$1,000 and we
expect that to be around US$800 by the end of the year,” he
said.
The reason why costs have come down, said Kunigonis, is a
combination of vendors consolidating to create better
economies of scale on component manufacture as well
as ‘being smarter’ to reduce the cost of civil works.
Civil works, which includes the laying of fibre, accounts for the
bulk of FTTH costs. According to IDATE, the research and
consulting organisation, 70 per cent of the cost of rolling out
FTTH to greenfield sites is accounted for by the installation of
outside plant.
For serving densely-populated urban areas, which may allow
operators to uses existing infrastructure – such as sewers –
Sogetrel, a company which lays cable, calculates the cost of a
FTTB connection as between €430-€655; it estimates the cost
of a FTTH connection as between €600 and €925.
The largest slice of this cost – 25 percent – is represented by
outdoor deployment. Sogetrel spokespeople claimed that
these costs could be lowered further, helped by the use of
remotely-controlled devices to lay the cable. How much these
costs could be reduced by, the Sogetrel delegation didn’t say
in their presentation.
The drop in FTTH costs was confirmed by Terry Denson, vice
president at Verizon, which is investing US$23 bn through to
2010 to build out a nationwide FTTH network in the US. “At
year end 2005, the cost per premise was US$1.021,” he
said. “That is now down to US$850.”
According to Daniel Caclin, CEO of Erenis, a FTTB operator in
Paris that has hooked up 50,000 buildings, the cost per
subscriber is €700. “With the help of the local authorities [in
Paris] we can cut that by 40 percent,” he said.
In July 2006, the Mayor of Paris announced a civic support
plan to reduce the cost of laying cables in Paris to stimulate
broadband investment. According to the initial press
announcements, the proposal aimed to reduce the cost of
using underground ducts by 25 per cent and to reduce the
cost of connecting the last 400 metres to buildings by 90
percent.
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