Europe is on a steady path to full fiber, and we are currently witnessing a market tendency towards open access fiber networks. This development brings potential business opportunities for internet operators.
With the current European rollouts, fiber is gaining foothold across the continent, and more and more households are gaining access to fiber. Key figures from the latest FTTH Council Europe 2022 market report show that 198 million are homes passed, out of which 96 million are connected*1. And the steady rise continues: Forecasts from the FTTH Council Europe predicts that by 2027, FTTH/B will cover 309 million homes in the whole region of Europe, and around 190 million will be connected*2.
As a result of the increased fiber demand, we see a tendency towards open access fiber network, caused by both regulations and market trends.
In many ways, open access fiber network is all about freedom; the freedom of fiber. Freedom to choose and connect. Freedom to pick an individual solution. Freedom for end-customers to make their own decisions in terms of internet supplier.
According to René Brøchner, CEO at Icotera, open access fiber network, where the same physical network infrastructure is utilized by multiple providers to deliver Wi-Fi services to end-users, holds an enormous business potential for internet operators:
— Opening your fiber network means you make your own fiber infrastructure subject to competition by allowing other ISPs to offer Wi-Fi services on your network. This increases competition and brings more options for end-customers. Currently, we’re seeing a clear trend towards open fiber network having significant higher take-up rates*1.
As take-up rate is defined by the difference between homes passed and homes connected, the more subscribers , the better the business case for the network operators.
"When taking the current market development and trends into consideration, I’m afraid that some internet operators might miss out on business opportunities by not at least considering the future possibilities of open access network in their solutions.”
René Brøchner, CEO, Icotera
— The freedom of choice has a positive effect on end-customers’ desire to get fiber, thereby increasing take-up rates. It will be very profitable for your business if you can increase your take-up rate from 40 to 60 percent, for example, by opening your infrastructure. If, at the same time, you leverage on the opportunities to offer internet services on the fiber networks of other internet operators, the business potential increases further. Thus, with a two-box strategy, you can use the exact same router on all networks, which makes it cheaper and easier to maintain, René Brøchner explains and adds:
— Some markets are taking longer than others to open the fiber networks, but the tendency holds some very promising competitive advantages. As a natural part of the fiber expansion, monopolies will be challenged, contributing to a more diverse and competitive market. This results in increasing business opportunities for the internet operators who embrace the development and take advantage of open access networks.
New market trends require flexible solutions
The current fiber expansion and the tendency towards open access fiber network makes it relevant for internet operators to consider the customer premise equipment (CPE) installed at end-users’ homes. While open access fiber network contains new business opportunities, it also requires flexible household installations for internet operators to leverage on the market trend in a profitable way.
According to René Brøchner, this applies even for internet operators who are not currently planning to open their infrastructure.
— When taking the current market development and trends into consideration, I’m afraid that some internet operators might miss out on business opportunities by not at least considering the future possibilities of open access network in their solutions. As more and more markets become exposed to regulation, the decision to open the infrastructure is no longer solely the decision of the internet operators. But even for internet operators with the freedom of choice, the decision to open can generate significant financial benefits.
According to the CEO, internet operators should therefore make business choices that eventually prepare them for open access fiber network. In an open access fiber network market, a two-box solution can give internet operators the necessary flexibility in their services, and therefore, considering one-box versus two-box solutions is more relevant than ever:
— When you open your fiber network, you make it accessible for others to offer internet services on your infrastructure, but is your current setup prepared for the new market situation? If not, you might soon find yourself in a situation where you need to convert your one-box solution into a two-box solution. This is rarely a profitable move. Making the strategically choices now and get first time right is a way of preparing your business for the future, René Brøchner ends.
*1 Source: FTTH Council Europe, Market Panorama 2022
*2 Source: FTTH Council Europe, FTTH Forecast for Europe 2022-2027
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