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Investment, Investment, Investment – Investment 4.0 –
Di
2The Di2 SUMMIT 12 March 2018 Frankfurt Dr. Iris Henseler-Unger General Manager WIK GmbH
1
Status quo
0%
5%
10%
15%
20%
25%
2009 2010 2011 2012 2013 2014 2015
Investment in telco-infrastructure as share of revenue
AT BE DE DK ES FI FR IT PT SE
Quelle: European Commission, Digital Agenda for Europe, Scoreboard.
2
Potential Demand
3
Potential Demand
Economic implications of IoT
Roland Berger: Until 2025 additional annual value added of 250 bn. € in Europe
Cisco: Additional annual German growth of 2% in the next 10 years
PwC: Investment plans of annually 31 bn. € for the next 5 years
Significant advantages over the next 5 years, as of April 2016
Source: In accordance with PwC (2016).
Additional sales
(in € bn p.a. until 2020) Cost reduction
(in € bn p.a. until 2020) Industry 4.0 investments
(in € bn p.a. until 2020) Efficiency improvement (in 10% p.a. until 2020)
4
Potential Demand
Source: WIK-Market Potential Model.
* Demand estimates for business have not been updated, but have been integrated into the results of household updates without new calculations.
Demand potential for stationary broadband access, Germany 2025
5
Potential Demand
* Capacity strongly depends on sharing/splitting factor and user behavior during busy hour.
Source: WIK market potential model 2015.
Bandwidth, quality of service and technologies in UK
6
Potential Demand
Representative survey of Swedish consumers conducted between 29 September 2017 and 2 October 2017
FTTH users do more online:
On average FTTH users are 11% more active online
+7% information
+15% entertainment
+15% social interaction
+10% local services
FTTH users are more satisfied with their choice of infrastructure:
83% of FTTH users
but only 52% of DSL and 72% of cable users
On average FTTH users are 11% more active online
+7% information
+15% entertainment
+15% social interaction
+10% local services
FTTH users are more satisfied with their choice of infrastructure: 83% of FTTH users but only 52% of DSL and 72% of cable users
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Politics
FTTH-deployment as a focus of politics:
Boon or bane?
Blessing or curse?
Answer:
Yes and no!
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Politics
Sweden:
Early political commitment to fibre in 2000
Societal strategy Switzerland:
Organised compromise by NRA for fibre deployment model Australia:
High flying government plans
Intervention (structural separation) to realise a national broadband plan
Failure
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Politics
German strategy:
Late committment to fibre in the coalition agreement of 2018
Subsidies via a gigabit investment fund up to 12 bn € till 2021 Caveat:
Spending tax payers money
Crowding out of private investment
Risks to investors, as framework can change
State driven technology mix as starting point (VDSL instead of fibre)
Driving deployment cost inflation for subsidised and private investment
10 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
PT LV LT IS ES SE RO DK SK SI EE NO FI BG CZ NL CH HU FR IT PL MT HR AT DE IE UK BE EL
FTTP-coverage nationwide and in rural areas, 2016
Nationalnationwide Ländliche Regionenrural areas
Politics
Source: European Commission (2017).
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Conclusions
Growing demand for very high capacity networks creates business chances
State intervention no king´s road to fibre
Rural areas stay problematic
Looking for an attractive environment for private investment:
Simple, understandable business cases (wholesale-only?)
Calculable risks (e.g. committment by regulators?)
Stable conditions over the entire term (open access?)
Pragmatic solutions (co-investment, cooperations without discrimination?)
WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH
Postbox 2000
53588 Bad Honnef Germany
Phone: +49 2224-9225-0 Fax: +49 2224-9225-68 eMail: info@wik.org www.wik.org
