Bundesamt für Kommunikation Telecom Services Division Federal Office of Communications Next Generation Access Networks - the Swiss approach Philipp Metzger

Bundesamt für KommunikationTelecom Services DivisionFederal Office of Communications

Next Generation Access Networks - the Swiss approach

Philipp Metzger Vice-Director, Head Telecom Services Division, OFCOM (Switzerland)

EFTA Seminar on NN and NGABrussels, 16 March 2010

2 NGA Networks I SwitzerlandPhilipp Metzger, OFCOM-CH

Outline

1. Basic facts and context

2. Investment activities

3. Role of the NRA

4. Assessment

5. Prospects


An environment conducive to investment in FTTH

Excellent telecommunications infrastructureADSL coverage: > 98%


VDSL coverage: >75%


Cable coverage: > 85%


HSPA coverage: 90%


Top position in broadband

0

5

10

15

20

25

30

35

40

Net

herla

nds

Den

mar

k

Nor

way

Switz

erla

nd

Kore

a

Icel

and

Swed

en

Luxe

mbo

urg

Finl

and

Can

ada

Ger

man

y

Fran

ce

Uni

ted

King

dom

Belg

ium

Uni

ted

Stat

es

Aust

ralia

Japa

n

New

Zea

land

Aust

ria

Irela

nd

Spai

n

Italy

Cze

ch R

epub

lic

Portu

gal

Gre

ece

Hun

gary

Slov

ak R

epub

lic

Pola

nd

Turk

ey

Mex

ico

Source: OECD

DSL Cable Fibre/LAN Other

OECD Broadband subscribers per 100 inhabitants, by technology, June 2009

OECD average


High ARPU (16% more than the average)

BB + Fixed Access + Fixed calls monthly ARPU [€]

0.00 €

10.00 €

20.00 €

30.00 €

40.00 €

50.00 €

60.00 €

70.00 €

80.00 €

Ger

man

y

Gre

ece

UK

Fin

land

Aus

tria

Por

tuga

l

Sw

eden

Spa

in

Fra

nce

Italy

Net

herla

nds

Sw

itzer

land

Den

mar

k

Nor

way

Bel

gium

Irel

and

Source: Analysys, estimation Q3 2009


Readiness to invest

• Favourable conditions (high BB density & ARPU)• Tradition of infrastructure competition between the

incumbent and the cable network operators• Newcomers on the market: local Utilities (electricity

companies) want to build FTTH• Zurich’s decision to build FTTH in March 2007 launched the

race• Projects abound, especially in cities


Motivation and behaviour of main actors• Long term vision: more bandwidth needed to offer

triple-play service bundles including HDTV• The incumbent’s copper network is approaching its limits

• Will of local utilities to invest in FTTH-networks • for their own use (smart metering, smart grid)• aiming at foothold in telecommunications market, initially based on

open access model with one fibre

• CATV operators migrate towards DOCSIS 3.0• offering higher bandwidth than xDSL technologies

• Incumbent wants its own a dedicated fibre • keep nationwide access to the physical layer of the FTTH-network• offer managed network termination equipment and end-to-end

services


Role of the NRA

• Regulator (ComCom) has no legal tools to steer the development of FTTH (ULL and bitstream access have to be provided only on twisted copper wire)

• Regulator aims at:

- avoiding new monopoly

- promoting competition between infrastructures

- allow free consumer choice of provider

• Regulator acts as enabler of cooperation


Why multiple fibres?

• Incumbent proposes model with multiple fibres to facilitate cooperation with other network operators

• Single fibre network, as proposed by Utilities, only allows competition on top of the transport network (open access), but not at the infrastructure level

• Separate parallel fibre networks would only have very limited economic viability

• Multiple fibre model does not guarantee competition, but lowers entry barriers for potential FTTH operators and increases market contestability

• Multi-fibre model improves chances of infrastructure competition


Model of Cooperation

Swisscommanhole

Utilitiesmanhole

OTO: optical telecom’s outletBEP: building entry point

Opticalaccesspoint

Opticalaccesspoint

Opt

ical

di

strib

utio

nfr

ame

Swisscomlocal exchange

L1 access

Networkinterconnexion

Inhouse Drop Feeder


Enabling co-operation

• High investment risk in FTTH deployment

• Consequence: real willingness to do it in cooperation

• Regulator acts as enabler by organising roundtable talks with CEOs of most relevant network and service providers

• Roundtable has triggered several industry working groups under auspices of OFCOM


Working Group L1: assignment

The task of the L1 working group was to:

• define a technical standard for in-house wiring

• enable in-house installation to be shared by multiple network operators

• avoid the need for repeated installation work


Working Group L1: results

Standard describes section from BEP to OTO.

Important features of the specification:• splice enclosure at BEP allows access from multiple networks• 4 fibres from the basement to each apartment• 4 connector sockets at each outlet

BEP OTO

ONT/CPE

Drop cabling In-house cabling Equipment cord

User equipment

Home cabling

FD

Feeder cabling

manhole/cabinetPOP


Working Group L1B: assignment

The L1B working group was tasked by the Roundtable to address the following questions:

• How can it be ensured that a layer 1 offer at both the manhole and the local exchange is available wherever FTTH is deployed?

• How can real competition between active line access (ALA) providers be ensured nationwide?

• How can infrastructure be built as efficiently as possible through optimisation of the number of access points and building on existing facilities?


Working Group L1B: results

Conclusions:

• Service providers expect access to FTTH networks both on layer 1 and at the level of an active line access.

• Service providers expect non-discriminatory offers (layer 1 and active line access) for true competition to develop at retail level.

• Further exploiting ULL investments would require a layer 1 offer at least in the incumbent’s local exchanges.

• Utilities would need to offer common service platform for ALA in order to present real alternative to incumbent.


Working Group L2

• L2 working group tasked to determine relevant common issues concerning access to services on layer 2 (standardized access to open access networks)

• Publication of technical guidelines for interface standards and L2 service definitions based on Metro Ethernet Forum

• Proposal to create common platform for service providers to handle their use cases vis-à-vis network providers


Common L2 interfaces for data transport between service provider and clients

Network providers ALA providers

ClientsService users

Services Tel, TV, ISP, Data, etc.

Service providersALA users

L2 interface for users

L2 Interface for SP

S1 S2 Sn

SP1 SPn


Working Group L2B

• Proposal for a single platform with one common proxy (common platform) over local platforms of network providers

(multi-platform approach).

• Utilities of 5 cities will implement solution based on proposal.

• Once operating, platform should easily be extendable to encompass defined governance, rules and policy to fit a nationwide purpose.


Common platform for ordering and changing L2 connections

Clients

Service providers

Network provider 2ALA provider 2

Network provider 1 ALA provider 1

OSS/BSS

OSS/BSS

Common platform

Proxy

Ord

ers

& c

hang

es

A10 A10

U* U*


Working Group 3: contract issues

Tackling contractual issues between network operators and property owners regarding FTTH in-house installation:

• non-discriminatory access for network operators to existing in-house installations

• avoiding duplication of construction work and in-house wiring

• enabling free choice of service for end users through swift and easy change of provider

• allowing protection of investments by network providers building in-house installation


Cooperation Utilities - Swisscom

• Framework agreements between Utilities and Swisscom to build and share multi-fibre FTTH access networks:• no duplication of physical network construction in the areas of

drop cable and in-house installation

• both partners have access to layer 1 and are allowed to offer L2 services to other service providers

• in some cases, Utility has exclusive right to offer L1 access to third- party providers

• All drop and in-house cables provide 4 fibres per apartment.

• Access is provided at Swisscom local exchanges; additional access points are possible.


Assessment

• Very good BB coverage with existing technologies thanks to infrastructure competition

• Encouraging level of activity both in FTTH and upgrade of CATV networks to DOCSIS 3

• Established players are challenged by “new entrants”

• Co-operation between FTTH players has become the rule

• Active support by Regulator has been effective and valued

• Dynamic is still fragile, only facts will tell the truth


Prospects

During further NGA development, due attention needs to be given to:

• continued encouragement and active support of co-operation between players

• business case of Utilities (open access model)• development of players’ market positions• question of regulatory tools• how to cope with geographically differentiated offers• NGA in peripheral regions / universal service

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Documents

Bundesamt für Kommunikation Telecom Services Division Federal Office of Communications Next Generation Access Networks - the Swiss approach Philipp Metzger