gabrielle gauthey, vp investment and local development
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Gabrielle Gauthey, VP Investment and Local Development
Caisse des Dépôts
February 13th 2018
FTTH Conference 2018, Valencia
Caisse des Dépôts convictions and role
• Caisse des Dépôts has been a major investor in FTTH in France, and a key proponent of the wholesale only model over a period of 20 years.
• We see Network as an essential infrastructure.
• Analysis has shown that there is no economic viability for two competing
passive infrastructures on around 80% of the French territory. There is however considerable scope for competition at the active layer
• France provides a case study which illustrates within one country the effects of leaving deployment entirely to the market vs managing deployment through local public initiatives
What are we talking about ? Telecom network structure : a layered model
Services, Content & Apps (residential, public & business)
Active Network
(network equipments, business & operation support)
Passive Infrastructure
(trenches, ducts, fibre)
End-user
>200 B€
Investment
needed Payback
Few m-3 y
5-7 y
10-15 y
20%
80%
Each layer has a very different financial profile and needs to be addressed adequately
very low
Indication of sectorial funds focus
over the next two years
0 1 2 3 4 5
10.Infrastructure
services
1.Energy
2.Roads
3.Rail/Metro
4. Harbours
5.Airports
6.Water
7.Waste
8.PPP/PFI
9.Telecoms
Conditions for infrastructure
funds to invest
Investors seeking exposure to a periodic,
stable and guaranteed cash flows
Need for a regulated market with
contained competition and strong barriers
to entry
Necessity to make investments fit with
infrastructure funds’ risk profile:
Advocate for separation of passive layer
vs. active and retail to lower risk on the
passive layer part
Guarantee of a single fibre network in
case of operating cable operators
very
high
Source: Contribution, Deloitte 2010, Arthur D. Little
COMPETITION
AND
INCENTIVE
FOR
INVESTMENTS
Until recently no fit between conditions for investments and investors
Situation in France The “3-Areas model”- update
~ 1,9 M
9 M 1,6 M
Under deployment
or low density in
very dense areas Deployment intentions
Very dense Areas (4,7 M deployed households*/
6,3 M total)
« AMII » Areas (3,7 M deployed households*/
12,7 M total)
« Public Initiative » Areas (PIN) (11,7 M households involved /
17,3 M total)
Wholesale
Operator
Retail
Operator
To be
launched
Multi-local Operators
1,3
M
0,7
M
ongoing
Cable
networks
No
cable
Non-contractual
lines of allocated
« RIP »
~1,5 M
No
cable
VHB other
technos
(MeD,
radio…)
Call for
tenders
Cable
networks
Cable
networks
Cable
networks
Caisse des Dépôts mobilized for fixed high broadband and very high broadband coverage of territories
► Caisse des Dépôts played an important role in defining
business models for the public initiative deployments by setting
criteria under which it would provide funds
► First criterion is to minimise public money
► Open access, neutrality
► Caisse des Dépôts invests in 2nd generation Public Initiative
Networks (PIN) bringing optical fiber to subscribers, after
investing in 1st generation networks (collecting, unbundling
and serving companies)
► Caisse des Dépôts is a shareholder of 48 project companies in
France :
* 31 “PIN” 1G
* 17 “PIN” 2G
► Caisse des Dépôts has invested more than € 340 million in
equity for more than € 4 billion in investments
CDC prefers wholesale only models without any
engagement in the retail market
Multiple intervention tools for digital development and Very high broadband
Industrial tool for the resorption of mobile white areas, already present in Ariège, Oise, Vosges ...
+ € 340 million of equity invested in the capital of delegated project companies
New 100% fiber operator dedicated to « PIN », already present in several french regions such as, Calvados, Alsace, Sarthe, Somme, Aisne, Doubs, Essonne, Nord-Pas-de-Calais ...
USAGE
DEVELOPMENT e-education, e-tourism
e-health, datacenter, …
Loans from “savings funds” offered to local authorities
€
Example of projects in France… “Hauts de France” DSP FttH affermo-concessive - SMO La Fibre Numérique 59-62
Caisse des Dépôts partner of « SPV THD 59-62 »
4 /11/ 2016 : DSP signature
Contract length : 25 years
Start and completion of work : 2016 to 2022
Key milestones
Key figures
681 000 FttH lines in 6 years timeframe (537 000 concessif,
144 000 affermage)
900 M€ investments (22% public / 78% private)
Caisse des Dépôts
32 M€ equity
15%
30%
55%
THD 59-62
conceding industry
funders lenders
FIDEPPP2
MIROVA SP2
Stakeholders
Example of projects in France… “Grand Est” DSP FttH concessive - Région Grand EST
Caisse des Dépôts Partner of SPV Losange
25/07/2017 : DSP signature
Contract length : 35 years
Start and completion of work : 2017 to 2022
Key milestones
Key figures
1,2M FttH lines in 5 years timeframe (concessif)
995 M€ investments (83% public, 17% private)
Caisse des Dépôts
77 M€ equity
10%
33%
25%
conceding industry
funders lenders
Stakeholders
22%
10%
Thoughts for food…
• Key to success is to bundle more profitable areas with less profitable
areas when offering concessions and associated subsidies.
• Best way to attract investment in fibre is to have a vision from Europe
through to national and local Govts –> the access network is essential
infrastructure
• Need for a political vision involving 3 layers where the passive layer is
provided by a regulated monopoly. The middle active layer can achieve
some competition, but should also deliver open access
Q&A
Thank you for your attention!
www.ftthcouncil.eu
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