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The Cost of Nationwide Fibre Access in Germany

Author

Listed:
  • Stephan JAY

    (WIK, Bad Honnef)

  • Karl-Heinz NEUMANN

    (WIK, Bad Honnef)

  • Thomas PLÜCKEBAUM

    (WIK, Bad Honnef)

Abstract

It is common knowledge that Next Generation Access (NGA) networks require significant investments and that for many regions, especially in more rural areas, there is no viable business case. In this paper a bottom-up cost modelling approach is applied to determine the investment and cost of deploying and operating a FTTH network in Germany on a national level. The monthly cost per subscriber at various levels of penetration is compared with the Average Revenue Per User (ARPU) to determine the penetration level or the required revenue for profitable operation in a steady market state. Those regions for which there is no business case are analysed with regard to the level of required subsidies. The modelling is based on differentiated geotypes reflecting urban and rural areas. The basic cost model used has been applied to numerous case studies before and was adapted to determine different forms of subsidies.The research questions addressed are (1) What is the area of profitable FTTH coverage in Germany? (2) What is the level of prices, internal subsidisation or investment subsidy necessary to increase the coverage of FTTH in Germany? These results inform policy makers and operators of the relevant investment deltas and/or price levels needed to increase the coverage of next generation broadband access infrastructure.

Suggested Citation

  • Stephan JAY & Karl-Heinz NEUMANN & Thomas PLÜCKEBAUM, 2012. "The Cost of Nationwide Fibre Access in Germany," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(85), pages 169-188, 1st quart.
    • Handle: RePEc:idt:journl:cs8508
    as

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    File URL: http://repec.idate.org/RePEc/idt/journl/CS8508/CS85_JAY_NEUMANN_PLUCKEBAUM.pdf
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    References listed on IDEAS

    as
    1. Steffen HOERNIG & Stephan JAY & Werner NEU & Karl-Heinz NEUMANN & Thomas PLÜCKEBAUM & Ingo VOGELSANG, 2012. "Wholesale Pricing, NGA Take-Up and Competition," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(86), pages 153-174, 2nd quart.
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    Citations

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    Cited by:

    1. Plückebaum, Thomas & Ockenfels, Martin, 2020. "Kosten und andere Hemmnisse der Migration von Kupfer- auf Glasfasernetze," WIK Discussion Papers 457, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    2. Fabian Queder, 2020. "Towards a vertically separated broadband infrastructure: The potential role of voluntary separation," Competition and Regulation in Network Industries, , vol. 21(2), pages 143-165, June.
    3. Queder, Fabian, 2020. "Competitive effects of cable networks on FTTx deployment in Europe," Telecommunications Policy, Elsevier, vol. 44(10).

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    More about this item

    Keywords

    next generation access; FTTH; cost modelling; GPON; P2P; broadband strategy.;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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