The Cost of Nationwide Fibre Access in Germany

Stephan Jay, Karl-Heinz Neumann and Thomas Plückebaum
Additional contact information
Stephan Jay: WIK, Bad Honnef
Karl-Heinz Neumann: WIK, Bad Honnef
Thomas Plückebaum: WIK, Bad Honnef

Communications & Strategies, 2012, vol. 1, issue 85, 169-188

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.

Keywords: next generation access; FTTH; cost modelling; GPON; P2P; broadband strategy. (search for similar items in EconPapers)
JEL-codes: L5 L51 L96 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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