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May 13, 2015
C2 – INTERNAL USE
NGA Devel opment
Technol ogi cal evol ut i on of FTTC &
pol i cy i mpl i cat i ons
C2 – INTERNAL USE
Fleming Area – NETCO trial
The widest NGN footprint in Italy: 2 Mln households
passed and around 280k active customers on
proprietary FTTH network in 7 major urban areas in Italy
Extensive LLU coverage with presence in 1,200 LLU
sites
First operator to offer IPTV services in Europe since
2001, on fiber and LLU lines.
First operator in Italy to offer 20Mbit Access
Since end 2008, rolling out 100Mbit FTTH for
Residential and Business Customers
Fastweb is the market leader for NGN deployment and services in Italy and
actively taking part to all co-investment discussions ongoing in Italy
Fastweb’s uni que posi t i oni ng i n t he NGA mar ket
C2 – INTERNAL USE
St at us of co- i nvest ment pr oj ect s i n It al y
Fastweb, Wind and Vodafone launched a co-investment initiative in May 2010
based on a FIBER-CO model building an FTTH point to point network. Pilot
project in Rome 10k households.
Government launched Industry Initiative for co-investment with possibility of public
financing. TI’s participation was seen as essential to ensure profitability of
investment.
Disagreement on network architecture, pricing schemes, NET-CO governance,
compensation for stranded copper assets, buy back from TI led to a delay and
failure of discussions.
Increase of wholesale prices by the NRA deprived OLOs of resources to expand
co-investment initiative (estimated 700 Mln euro of increased costs for alternative
operators).
C2 – INTERNAL USE
Value generation in Fixed TLC market: EBITDA – Investments (%, Bln€)
TI investments (Bln€)
2.7 2.4 2.1 1.9
Total Mkt(€Bln)
Alternative Operators
2010
4,6
0%
100%
2009
4,3
0%
100%
2008
4,2
4%
96%
2007
3,9
-5%
105% Telecom Italia 105% 96% 100% 100%
What ar e t he i ncent i ves f or f i ber depl oyment ?
C2 – INTERNAL USE
Copper access pr i ces vs f i ber depl oyment pl ans
Homes passed
3 Mln in 2011 April 2009
Apr 2010
Dec. 2009 2.5 Mln in 2012
1.3 Mln in 2012
Feb. 2012 FTTC 7.64
8.49
8.7
9.02
9.28
2008
2009
2010
2011
2012
LLU price trend
C2 – INTERNAL USE
FTTC: VDSL2 & Vect or i ng
VDSL2 VDSL2 is based on deployment of fibre at street
cabinets and can provide up to 50-70 Mbs.
Altnets can be VDSL2 operators by co-locating their
equipment in the street cabinets and renting sub-
loop unbundling (i.e. the copper from the cabinet to
the users’ premises).
VECTORING By cancelling the noise on the copper loops, Vectoring
enhances the performances of VDSL2, allowing it to
reach up to 100 Mbs.
Same architecture of VDSL2 (FTTC + copper to
customers’ premises).
In order to maximize the use of available financial resources, FTTC may
be an essential step in the roll out of NGN
C2 – INTERNAL USE
When: 16th to 31st January 2012
Goal: testing the potential and limitations of vectoring
technology; comparing performances of vectoring and
VDSL2
Trial characteristics:
1. A realistic simulation of a standard street cabinet:
connected with fiber to PoP and to 40 copper sub-loops.
2. Different copper lengths to test performances under
various conditions
3. Trials simulating multiple Vectoring-DSLAM operators
from the same cabinet
4. Some improved conditions compared to real field:
New copper loops and low external noise
PoP to Cabinet distance fixed at 800 mt
5. Some worsened conditions compared to real field with
loops used for most tests (710 mt) longer than typical
length of sub-loops in Italy.
Fast web FTTC t r i al i n Mi l an
PG. 7
C2 – INTERNAL USE
VDSL2 and Vect or i ng per f or mances: on- f i el d
r esul t s
PG. 8
Measured Rate vs Reach
With loops under 500 mts:
Vectoring allows to reach 90
Mbs
VDSL2, even without vectoring,
reaches 70 Mbs.
VDSL2 – which has none of the competitive limitation of vectoring -
represents a change of paradigm compared from ADSL from local office
improving current broadband speeds of 250%.
C2 – INTERNAL USE
A. Vectoring across multiple DSLAMs is in the near-term roadmap of the main DSL technology suppliers. Pre-commercial solutions already available for demo.
B. Such solution allows to maintain vectoring performances even
with multiple ISPs operating at the same cabinet provided that:
i. The second operator willing to deploy Vectoring from a cabinet adopts the same technology chosen by the first mover and connects to the first DSLAM with a cable to achieve vectoring coordination
ii. A shared vector processor manages the noise cancellation for all in a neutral way
C. Such an evolution is pushed by incumbents interested in
vectoring to overcome current limitations of the technology: as vectoring customer base grows, vectoring coordination across multiple DSLAM/chassis/cabinets will be needed regardless of their physical location
D. The same solution enables coexistence of multiple providers using same vectoring technology while maintaining enhanced vectoring performances
Cl ear pat h t owar ds coexi st ence of mul t i pl e
pr ovi der s
PG. 9
Cross-DSLAM vectoring coordination for
normal expansion needs (single provider)
Cross-DSLAM vectoring coordination for
multiple SP co-existence
C2 – INTERNAL USE
Pot ent i al of FTTC i n It al y
PG. 10
8 cities considered by FW for the initial deployment: • Bergamo • Brescia • Florence • Rome • Naples • Bari • Catania • Palermo
• Based on TI database information, average copper length in 8 cities is around 409 meters
(70% of loops are below 400 meters)
• FTTC, either through VDSL2 or Vectoring, represents a promising technology to reach
Digital Agenda targets
Fastweb has already requested Sub-loop Unbundling for over 200 cabinet areas and is
ready to increase this footprint under the right conditions
1.000 800 600 400 200
100M
95M
80M
Vectored Down Speed
VDSL2 Down Speed
70M
70M
58M
Distribution of length in secondary copper network
Meters
C2 – INTERNAL USE
FTTC has a relevant potential to provide ultra-broadband services in Italy
and can represent an intermediate step to FTTH.
Performances of non-vectored VDSL2 are already remarkable with short
loops and could be considered as an alternative until vectoring becomes
mature and allows multi-operator environment.
Vectoring evolutions available by end of 2012/2013 will enable different
ISPs to provide vectoring from the same cabinet.
Fast web t r i al : mai n f i ndi ngs
PG. 11
C2 – INTERNAL USE
Sub Loop Unbundling (SLU) will play an essential role in the deployment of FTTC and increase infrastructure-based competition towards full FTTH solutions
Withdrawing or limiting SLU is not necessary and not desirable: • it would give incumbents the capability to deploy FTTC if/when/where they want,
therefore taking away any competitive pressure • vendors not encouraged to develop pro-competitive evolutions of vectoring;
Deploying of vectoring under existing limitations can be enabled by establishing: • Obligation for the first mover to take care of the cross cancellation for other ISPs
(allow other ISPs to connect their DSLAM to the first mover’s CPU • Obligations for second/third movers at each cabinet to adopt the same
technology as the first mover. Facilitating deployment of FTTC by Altnets would put pressure on incumbents triggering a competitive race to be the first mover.
What does t hi s i mpl y i n t er ms of pol i cy?
PG. 12
C2 – INTERNAL USE
Currently, alternative operators have relevant cost and operational
disadvantages in deploying FTTC:
Disproportionate price of sub-loop SLU is currently priced at a very high and disproportionate level compared to
LLU, making it hardly sustainable for Altnets. This is one of the main reasons for the
marginal deployment of VDSL by Altnets.
Delays in availability of cabinets to install active equipment: Co-location at street cabinet may be complex, providing opportunity for incumbent to
delay process and put in place discriminatory behavior; provision of sub-loops
currently subject to many technical limitations. Additional cost/operational complexity
Limited control of provisioning and assurance activities Whereas incumbent operates directly with its own workforce (or external contractors)
on the cabinets for activation and maintenance, Altnets need to rely on the incumbent
to do these activities for them. This has been historically a major source of
discrimination and would be even more relevant in vectoring/VDSL.
Bar r i er s f or Al t net s i n depl oyi ng FTTC
C2 – INTERNAL USE
Introduce measures in the costing and non discrimination Recommendations making it easier for Altnets to roll-out FTTC:
Lower sub-loop prices: decrease SLU more than proportionally compared to LLU
Stricter non discrimination measures for VDSL: give Altnets the possibility to use external contractors used for delivery/maintenance of sub-loops.
Vectoring: do not remove subloop ULL but impose an obligation for ISPs willing to deploy vectoring at a specific cabinet to coordinate equipment with other operators. Accelerate pro-competitive development of vectoring technology. Need to avoid that technology drives regulation. Should be the other way around.
Push for a “competitive” r ol l - out of FTTC