FTTH Council Europe, February 2016

New Zealand’s Ultra-Fast Broadband project

Marlies Van der Wee

James Wheatley

Jeroen Vanhaverbeke

3 Sessions

13:00 – 14:45 Eir’s experiences

Key Learnings from FTTH deployment in Ireland

15:00 – 16:30 New Zealand’s UFB deployment

Answers to important FTTH deployment barriers

16:45 – 17:30 Handling Business case uncertainties

Exploring ways to improve your business case

2

Speakers

3

Marlies Van Der Wee

iMinds

James Wheatley

GE

Jeroen Vanhaverbeke

FiberPlanIT

A short introduction to New Zealand

Marlies Van der Wee

4

New-Zealand

5

km2 260,000

millions 4.4

per km2 16

ratio7

#2

Some facts about New Zealand

6

<1 person per km2

:

Some history

7

2009 National party

OK, but how?

Cover an entire nation on a limited budget

Jeroen Vanhaverbeke

9

In a perfect world…

100% FTTH coverage

But…

Limited budget

10

Impact most expensive homes

11

0%

25%

50%

75%

100%

50%60%70%80%90%100%

Investm

en

t

Coverage

Exclude most expensive homes

Maximum Cost/HP?

Big impact on total investment

2 programs

UFB

RBI

Case study: cost per home

12

Case study: cost per home

13

Case study: cost per home

14

Where is the cut-off?

Methods

Current connection speed

Population density

…

Cost-coverage analysis

15

Generate deployment cost heat map

Budget estimation

How to calculate needed investment

Tendering

Funding

Required Accuracy?

Time constraint?

16

Total cost of ownership

OPEX vs CAPEX

OPEX often overlooked

Active equipment in the field

Power, maintenance, …

Leasing

Dark fibre, ducts, exchange, poles

from utilities, …

17

Broadband via two separate projects!

Marlies Van der Wee

18

UFB, New-Zealand

19

• Public-Private Partnership based on tender

• NZD1.5 billion public investment

• GPON

• Only a wholesale bitstream offer

• no retail services!

The Rural Broadband Initiative (RBI)

Areas not covered by UFB deployment speeds of at least 5 Mbps

90% of rural homes and businesses, all public schools and hospitals

Procurement of NZD $350 million

20

further deployment of VDSL and ADSL2+

Fixed-wireless broadband by upgrading existing and

deploying new base stations

UFB progress so farDecember 2015

21

UFB

Priority usersSchools in UFB, RBI and remote areas

Business model: bitstream open access

22

…

Business model: bitstream open access

23

…

Competition local and nationwide

87 in total, typically 10 per area

Own geographical coverage area

BITSTREAM ACCESS

Bitstream open access on GPON

24

CO

Point of

Interconnect

ICAB

ONT

1 GB or 10GB

L2 access network

30/10 or 100/50

COONT

Funding schemes

25

Funds-recycling

model

Investment

model

Funds-Recycling model

26

Start planning and deploying!

Jeroen Vanhaverbeke

27

Rollout order: based on priority users

28

Schools and universities

Hospitals

Businesses

Alternatives: phased rollout

Take the cheapest option for every

incremental step?

OR

Plan the entire network upfront and already

take trenching, duct capacity… of future

rollouts into account in the first phase?

29

Case Study: How to do a Phased Rollout?

Source: Municipal driven fiber access network rollout (Van Ooteghem, Casier, De Heyn, et al.)

30

Case Study: Results

Optimizing the network for different phases can lead to significant differences in CAPEX.

Results depend on: Technological choices

Labour and material cost

Size of the phases

Cost of Capital, estimated time between phases, expected adoption… play an important role when making a decision.

Every rollout is different. Planning needs to be done case by case.

31

Deployment to non-FTTH areas

Backhaul upgrades

Cabinet

Antenna

Connect passed homes

Low additional cost

Future proof

32

Project cost calculation

Easy!

∑ (Equipment x (material cost + labour cost))

But…

All unit costs known?

Equipment volume correctly estimated?

Unforeseen costs?

33

Shared

driveways

Project cost calculation

Easy!

∑ (Equipment x (material cost + labour cost))

But…

All unit costs known?

Equipment volume correctly estimated?

Unforeseen costs?

34

Shared

driveways

Increased complexity

35

Depending on regional legislation

Frequently with subcontractors

How to tackle increased complexity

Chorus

Started rolling out in 2011

Now in year 6 of the 9-year build plan

Phased approach per year

Roll-out rules and techniques are reviewed and improved

Design rules per year

Chorus developed a "ruggidised" cable that can be either surface

mounted (e.g. on fences) or shallow buried

37

Costs at customer activation

Design decision!

Impact on time to activate

Skills

Unexpected problems?

Cost per Home Passed vs Home Activated

Adoption rate?

Design rules/Architecture impact

38

Managing the network build

James Wheatley

39

Managing the build

FTTH deployments are big construction projects

Hundreds of tasks to be completed by many crews

How to efficiently manage all this work?

How to report out to senior management on progress?

How to manage multiple sub-contractors?

How to identify tasks that are held up?

How to assign tasks to the right resources?

How to keep track of status of each task?

Use a work management solution to manage it all

40

41

Reduce average Cost per Premise Passed (CPPP)

from NZ$3,500 to less than NZ$1,500

The original challenge for Chorus

Field Engineer

Designer

Coordinator

Resource Pool

Design

Civil Works

Connection

Feasibility

Jobs & Tasks

Manager

Standardised

Processes &

Data Structure

… etc.… etc.

How work management solutions can help

42

Processes & procedures define how things need

to be done and by whom

What needs to be done gets loaded & organised in work management solution

Work management then helps assign,

schedule, manage & report on these items

Work management done right

43

Benefits of work management solutions

44

Enables process

optimisation, eliminates

waste, automates manual

tasks and removes

bottlenecks

Removes the barriers to effective contractor management by providing a

collaborative operating model between the operator and its contractors

Provides real-time

strategic business

intelligence and detailed

reporting

Deploys operational

controls to ensure work is

completed on time, in full

and to specification

Reduces project management

& administration costs –

including analysis, reporting,

document management &

communication

Current situation at Chorus

45

Cost Per Premise Passed:

Projected to be NZ$2,134

Now: within range of NZ$1,700 to NZ$1,770

Session wrap-up

Marlies Van der Wee

46

Something to remember?

Clear government role in fiber deployment

Significant control in return for direct investment

Cost-coverage trade-off in design decision

Led to two separate projects: UFB and RBI

Phased approach: learning as-you-go Supported by work management solution

47

Next steps for New Zealand?

Reducing uncertainty in regulation

Revision of the Telecommunications Act of 2001

Different proposals…

Extension to both projects

FTTH to at least 80% of homes

Mobile Black Spot Fund

-> coverage to highways and key tourist areas

48

?

FTTH Council Europe, February 2016

Thank you for your attention!

Any questions?

www.technoeconomics.ugent.be