Techno-Economics of Residential Broadband Deployment: Multimedia Services in Residential Broadband Networks

PhD-projektet har titlen ”Techno-Economics of residential broadband deployment” (”Tekno-økonomisk analyse af bredbåndsforbindelser til private husstande”). Det omhandler den aktuelle markedssituation for bredbåndstjenester, hvor elselskaberne udfordrer de traditionelle teleselskaber ved massiv udrulning af optiske fibre til slutbrugerne. De gamle teleoperatører besidder som oftest en veludbygget infrastruktur i kraft af deres eksisterende telenet (”det rå kobber”), og de vil typisk foretrække en xDSL-baseret strategi (forskellige varianter af Digital Subscriber Line-teknologien: ADSL, VDSL, etc.), hvor hastigheden for dataforbindelser gradvist kan øges til 10-50 Mbit/s eller endnu mere, for at få størst muligt udbytte af deres tidligere investeringer. Forsyningsselskaberne er derimod ikke bundet af sådanne hensyn, og de vil ofte gå direkte efter en fiber-til-hjemmet løsning (FTTH, Fiber-to-the-Home), som på længere sigt tilbyder en langt større datakapacitet. Valget af den rigtige strategi for bredbåndsudrulning afhænger af et komplekst samspil mellem mange faktorer, og der er behov for præcise tekno-økonomiske modeller som beslutningsgrundlag. Eksisterende modeller tager ikke i tilstrækkelig grad hensyn til de dynamiske ændringer i markedet, som konkurrencen giver anledning til. PhD-arbejdet og afhandlingen indeholder en grundig analyse af transmissionskravene for fremtidige bredbåndstjenester og de tekniske faktorer, som har betydning for udrulningsstrategien. Tilgangen i projektet er tværfaglig og kombinerer en solid teknisk viden om telenet og tjenester med økonomisk teori og teori for regulering af telekommunikation. På grundlag heraf opstilles en tekno-økonomisk omkostningsmodel, der simulerer kapitaludgifter og ydelser. Som et særligt element i modellen benyttes spilteori til at simulere vekselvirkningen mellem konkurrerende infrastrukturer. Arbejdet har et særligt fokus på det danske marked. Det følger de generelle principper fra den danske LRAIC-model (Long Run Average Incremental Cost) og inddeler Danmark i 4 geografiske profiler. Under hensyntagen til den eksisterende kobber-infrastruktur identificeres de mest fordelagtige strategier for aktørerne for hver af disse profiler. Bl.a. påpeges vigtigheden af tidshorisonten for investeringen, forskellene mellem storbyregioner og landområder, og betydningen - for de gamle teleoperatører – af at placere DSL-udstyr ude i knudepunkterne som en forsvarsstrategi. Det konkluderes på grundlag af modelsimuleringer, at fiberudrulning i Danmark kun vil være fordelagtig i storbyerne, hvis mindst 25 % af samtlige husstande abonnerer på tjenesten. I resten af landet vil fiberudrulning kun være fordelagtig, hvis graveomkostningerne kan deles med andre anlægsarbejder. Samlet set yder PhD-arbejdet et væsentligt bidrag til vores viden om bredbåndsudrulning i et dynamisk marked som det danske, og det forbedrer beslutningsgrundlaget for fremtidige valg af strategier både for teleselskaberne og deres konkurrenter. Abstract: The PhD project has the title Techno-Economics of Residential Broadband Deployment. It investigates the current market situation of broadband services, where the electricity companies challenge the incumbent telecom operators by extensive deployment of optical fibres to the end users. Very often the old telecom operators have a well-developed infrastructure on account of their existing telecom network (”the raw copper”), and typically they will prefer an xDSL-based strategy (various types of Digital Subscriber Line-technology: ADSL, VDSL, etc.), where the rate of speed of data connections are increased gradually to 10-50 Mbit/s or even more, in order to gain as much profit as possible from their previous investments. However, the operators are not restricted by these considerations, and they will often choose a fiber-to-the home solution (FTTH, Fiber-to-the-Home), which will offer a far more substantial data capacity in the long run. The choice of the proper broadband deployment strategy is depending on a complexed set of parameters, and there is a demand for precise techno-economic cost models estimating financial feasibility. The existing cost models do not consider the dynamic developments in the market caused by competition. The PhD thesis has a profound analysis of the transmission requirements of future broadband services and the technical parameters with importance for the deployment strategy. The framework of the project is interdisciplinary and combines a solid technological knowledge about telecom networks and services with economic and telecom regulation theory. Based upon this a techno-economic cost model is made that simulates capital expenses and services. As a special element of the model game theory is used to simulate the interaction between competitive infrastructures. The work has a specific focus on the Danish market. It follows the general principles from the Danish LRAIC-model (Long Run Average Incremental Cost) and divides Denmark in 4 geografical profiles. Considering the existing copper-infrastructure the most advantageous strategies for the players of each of these profiles are identified. The importance of the time horizon for the investment is underlined, the differences among city and rural regions, and the importance – for the old telecom operators – to place DSL equipment out in the nodes as a defense strategy. It is concluded based upon model simulations, that deployment in Denmark will only be advantageous in the cities, if at least 25% of all homes subscribes to the service. In the remaining part of the country deployment will only be advantageous, if digging cost can be shared with other cost of construction. On the whole the PhD work makes a substantial contribution to our knowledge about broadband deployment in a dynamic market like the Danish, and it improves the decision making process for future strategy choices both for telecom operators and their competitors.