Tuesday, November 12, 2024

Is Payback on Open Access ISP Networks Faster?

One argument for open access fiber-to-home networks is that such networks enable competition while also requiring less capital investment in multiple networks. And there is at least some evidence that open access networks reach payback a bit faster than single ISP-owned facilities.


For example, a sampling of ISP FTTH networks that are not operated on an open access basis suggest payback in competitive markets between seven and 15 years, with payback happening faster with higher take rates. 


Network

Country/Region

Market Competition

Capital Investment

Payback Period

Penetration Rate

Google Fiber (Kansas City)

USA (Kansas City)

Competing with Cable & DSL

$94 million

7-9 years

30-40%

Orange FTTH (France)

France

Competing with Free and SFR

$4 billion (nationwide)

10-12 years

25-35%

BT Openreach FTTH

United Kingdom

Competing with Virgin Media

£12 billion

12-14 years

20-30%

Verizon Fios (NYC)

USA (New York City)

Competing with Spectrum & Altice

$23 billion (total Fios)

9-11 years

35-45%

TDC FTTH (Denmark)

Denmark

Competing with Fiberby and Waoo

€500 million

10-12 years

20-30%

Bell Canada FTTH

Canada

Competing with Rogers

$1.5 billion

8-10 years

25-35%

Chorus FTTH (New Zealand)

New Zealand

Competing with Vodafone NZ

NZ$3 billion

10-11 years

30-40%

T-Mobile Fiber (Germany)

Germany

Competing with Vodafone & O2

€2 billion

12-15 years

15-25%


But some open-access networks get payback in seven to 18 years. The point is that it is not always clear open-access networks reach payback faster than ISP proprietary networks. 


Network

Country

Network Type

Capital Investment

Payback Period

Ammon Fiber Optic Network

USA (Idaho)

Municipal Fiber Network

$3.5 million

16-18 years

Stockholm’s Stokab Network

Sweden

City-Owned Fiber Network

$300 million

8-10 years

Utopia Fiber (Utah)

USA (Utah)

Open Access Fiber

$200 million (Phase 1)

12-14 years

NGA Initiative (UK)

United Kingdom

Public-Private Partnership

£1.7 billion

10-15 years

Nuenen (NL) Fiber Network

Netherlands

Rural Fiber Network

€8 million

7-8 years

Lunet

France

Rural Municipal Network

€2.5 million

10-12 years


No comments:

ISP Marginal Cost Does Not Drive Consumer Prices

As the U.S. Federal Communications Commission opens an inquiry into ISP data caps , some are going to argue that such data caps are unnecess...