LONDON, UK – A new study from the fiber consultancy experts of Ventura Team and financial experts Portland Advisors has calculated that a full switchover from copper-based to completely fiber-based broadband (FTTH) could take 92 years unless EU governments decide to significantly change telecom regulations and embark on a comprehensive fiber switchover Plan. The current switchover is happening at a snailâ€™s pace and it could seriously obstruct economic growth across Europe for a long time to come, the report says.
The study indicates that the problem is a lack of political will rather than a lack of capital and advocates changes in regulations in the form of a coordinated program to drive the fiber switchover. Right now there is little incentive for fixed telecom operators to affect a switch to fiber since the cash keeps flowing from the old copper networks anyway, the study says.
â€œEvery technical expert will agree that fiber is the only real technological option capable of meeting the demand for broadband in the long run. But in Europe we are still not investing enough money into fiber, and this is not for lack of capital. The industry could fund the switchover itself over a period of 25 years with the right regulations,â€ says Stefan Stanislawski, â€˜fatherâ€™ of local loop unbundling (i.e. the author of the 1993 report for the EU that started the entire unbundling process in Europe).
According to the study â€“ which has been funded by the Fibre to the Home (FTTH) Council Europe – a full switchover resulting in fiber cables laid out to every home in the EU would cost an estimated $336 billion in capex. The current rate of telecoms investment into fiber is a mere $3.8 billion a year and that is simply not fast enough, say the authors.
â€œIn our view the telecoms industry must uphold what we call their â€˜social contract for timely renewal of assetsâ€™. In fact, regular telecoms consumers all over Europe are already paying for the switchover to happen over the next 25 years through tariff regulations â€“ except it wonâ€™t, unless new regulatory schemes are adopted and enforced,â€ says Mr. Stanislawski co-author of the study and partner of Ventura Team.
Fiber Switchover Would Pay for Itself
â€œThe good news is that a much faster fiber switchover inside the EU27 is entirely possible provided that there is enough political will and that the right regulatory changes are made. In fact, a fiber switchover would generate jobs and growth to repay the investment. Itâ€™s an ideal form of stimulus because the spending and benefit is literally spread to every home and business, not just concentrated in a few lucky areas,â€ Mr. Stanislawski says.
Action Plan to Motivate Fiber Switchover
To affect the complete switchover in a maximum of 25 years the study advocates a seven-point action plan in that includes changing the regulation, enforcing the existing social contract, changing strategic pricing, updating the concept of universal service, and more. The study maps out the estimated effects of the seven-point plan through the use of a comprehensive economic model.