Next-generation Access in the Netherlands
In our previous analysis of the Netherlands, we pointed out the potential for the development of a viable open access market, due to the activity of a number of infrastructure players and municipalities. However, there were major barriers including lack of scale, a fragmented market, and stiff competition from cable operators and the incumbent, KPN. Since then, there have been a number of key developments which have either eased or even removed these barriers and triggered the deployment of open access (predominately at a passive level) on a large scale. The most significant of these is the joint venture between KPN and Reggefiber, which is another example of incumbents taking on a more collaborative approach towards investment which is highly capex-intensive.
The Netherlands is also of interest in terms of operators showing a clear preference for point-to-point FTTH where open access networks are being deployed. In many other markets, passive optical networks (PONs) have become the technology of choice. The widespread deployment of P2P has been supported by OPTA, which has been proactive in promoting open access on a large scale in order to better facilitate competitor access to fiber access networks. This includes a cost-orientated price control obligation for unbundled access to the fiber (optical distribution frame – ODF) access network.
Joint venture activity has become central to the development of next-generation access (NGA) in the Netherlands. The country’s NGA players have benefited from a clear regulatory NGA framework provided by the regulator, OPTA, which crucially included pricing clarity. The hook-up between incumbent KPN and infrastructure specialist Reggefiber means that more than 2 million homes (at least one-quarter of households) should have access to point-to-point-based FTTH broadband by 2013. In addition to Amsterdam’s open access network, there are a number of smaller FTTH networks instigated by municipalities. Elsewhere, KPN is rolling out FTTC. High-speed cable broadband also plays a central role, with major players UPC and Ziggo offering between 25Mbps and 120Mbps.
The Netherlands is also of interest in terms of operators showing a clear preference for point-to-point FTTH where open access networks are being deployed. In many other markets, passive optical networks (PONs) have become the technology of choice. The widespread deployment of P2P has been supported by OPTA, which has been proactive in promoting open access on a large scale in order to better facilitate competitor access to fiber access networks. This includes a cost-orientated price control obligation for unbundled access to the fiber (optical distribution frame – ODF) access network.
Joint venture activity has become central to the development of next-generation access (NGA) in the Netherlands. The country’s NGA players have benefited from a clear regulatory NGA framework provided by the regulator, OPTA, which crucially included pricing clarity. The hook-up between incumbent KPN and infrastructure specialist Reggefiber means that more than 2 million homes (at least one-quarter of households) should have access to point-to-point-based FTTH broadband by 2013. In addition to Amsterdam’s open access network, there are a number of smaller FTTH networks instigated by municipalities. Elsewhere, KPN is rolling out FTTC. High-speed cable broadband also plays a central role, with major players UPC and Ziggo offering between 25Mbps and 120Mbps.
Executive summary
In a nutshell
Ovum view
Key messages
OPTA, municipalities, and many operators regard open access as an important strategy for effective NGA development
KPN will have to respond to price competition from cable companies
Cable competition and lower deployment costs are helping to drive development
The high level of municipal involvement in NGA is aiding uptake and awareness
Broadband market overview
A densely populated, mid-sized market
Broadband coverage
Fixed-to-mobile substitution is higher than average, but its growth has recently stalled
The Netherlands is a broadband leader
Cable and DSL competitors
Incumbent market position
Multi-play packages and pricing
Next-generation access overview
Alternative FTTx has driven deployment
A familiar pattern: subscriber uptake lags rollout
Cable competition: matching FTTH speeds with aggressive pricing
Open access playing a central role
Mainstream approach
Reggefiber and KPN
Glashart
Amsterdam CityNet
Smaller-scale open access projects
Fiber in the access: the final piece of KPN’s all-IP network
Overview
Growth targets
Business case assumptions
Trial results: ARPU and uptake
Competition policy and regulation
Local loop unbundling
Impact on LLU of the transition to all-IP networks
Market analysis and remedies
Proposal for fiber access tariff regulation
In a nutshell
Ovum view
Key messages
OPTA, municipalities, and many operators regard open access as an important strategy for effective NGA development
KPN will have to respond to price competition from cable companies
Cable competition and lower deployment costs are helping to drive development
The high level of municipal involvement in NGA is aiding uptake and awareness
Broadband market overview
A densely populated, mid-sized market
Broadband coverage
Fixed-to-mobile substitution is higher than average, but its growth has recently stalled
The Netherlands is a broadband leader
Cable and DSL competitors
Incumbent market position
Multi-play packages and pricing
Next-generation access overview
Alternative FTTx has driven deployment
A familiar pattern: subscriber uptake lags rollout
Cable competition: matching FTTH speeds with aggressive pricing
Open access playing a central role
Mainstream approach
Reggefiber and KPN
Glashart
Amsterdam CityNet
Smaller-scale open access projects
Fiber in the access: the final piece of KPN’s all-IP network
Overview
Growth targets
Business case assumptions
Trial results: ARPU and uptake
Competition policy and regulation
Local loop unbundling
Impact on LLU of the transition to all-IP networks
Market analysis and remedies
Proposal for fiber access tariff regulation
LIST OF TABLES
Table 1: Total fixed broadband connections
Table 2: Netherlands: high-speed cable broadband pricing
Table 3: Capex estimates for different rollout stages
Table 1: Total fixed broadband connections
Table 2: Netherlands: high-speed cable broadband pricing
Table 3: Capex estimates for different rollout stages
LIST OF FIGURES
Figure 1: Key broadband players and subscriber numbers, 4Q09
Figure 2: Trends in bundled services uptake, 4Q06–2Q09
Figure 3: Triple-play market shares
Figure 4: Growth in homes passed and homes connected, 4Q07–4Q09
Figure 5: KPN triple-play packages and pricing
Figure 6: Amsterdam open network model
Figure 7: Structure and ownership of Reggefiber JV
Figure 8: KPN’s all-IP network infrastructure
Figure 9: KPN’s geographic mix of broadband infrastructures
Figure 10: KPN’s mix of broadband infrastructures moving forward
Figure 11: KPN FTTX pilot results
Figure 12: KPN’s initial all-IP (FTTC) network transition
Figure 13: Unbundling tariffs
Figure 1: Key broadband players and subscriber numbers, 4Q09
Figure 2: Trends in bundled services uptake, 4Q06–2Q09
Figure 3: Triple-play market shares
Figure 4: Growth in homes passed and homes connected, 4Q07–4Q09
Figure 5: KPN triple-play packages and pricing
Figure 6: Amsterdam open network model
Figure 7: Structure and ownership of Reggefiber JV
Figure 8: KPN’s all-IP network infrastructure
Figure 9: KPN’s geographic mix of broadband infrastructures
Figure 10: KPN’s mix of broadband infrastructures moving forward
Figure 11: KPN FTTX pilot results
Figure 12: KPN’s initial all-IP (FTTC) network transition
Figure 13: Unbundling tariffs
