Real story, real numbers – A case study

FTTH Conference

Milano, February 10th 2011

Birgir Rafn Thrainsson, CEO

Reykjavik Fiber Network

Objective

Tell you about the

Reykjavik FTTH project,

the Business model,

the Deployment and

the Active Network

Share information,

progress numbers,

financial figures and

technical metrics

For comparison to

your own project and

your own numbers

or estimates

Agenda

Background FTTH network

Cost figures

Business model

Lessons learned

About Reykjavík Fiber Network

Builds and operates an

Optical Fiber Network

Founded 2007

A subsidiary of Reykjavik

Energy, an energy and

utility company owned by

the City of Reykjavik

Fiber backbone network

in the Reykjavik area

since 1999

Power line services 2002

to 2005FTTH project started 2005

expected to complete in

2014

ISO 9001 certified

About Reykjavík Fiber Network

Consumer Broadband MarketReykjavik municipality area

Why FTTH?

Improve quality of

life and increase

competition.

Fiber backbone

network serving

carriers and

businesses.

Synergies with other

utilities, electricity,

hot water, cold water

and seweage.

Vision

Utilize existing

network Utility approach

Why FTTH?

Existing copper infra-

structure getting

older, based on entry-

barrier business

model.

Higher customer

satisfaction, fewer

trouble reports

according to Vodafone

Iceland.

Will be used for

profitable services.

FTTH is a gate for new

service development.

Telecom competition

Reliable service

delivery Bandwidth

Fiber Network overview

Open Access – Active Sharing

Based on the

following criteria:

• Limited role in the

value chain

• Shared investment

Open Access

Reykjavik Fiber

Network a wholesale

operator, Service

Providers provide

retail services.

Active Sharing

Rollout Strategy

Contracts with Service Providers

Contracts with Municipalities

Network Installation

Add subscribers

Network Operations

Deployment Prioritization of Areas

Use existing ducts

New building areas

At renewal time of utility ducts

Lowest cost pr. home

Areas where terrestrial TV or TV over ADSL is difficult to reach

Non-committing interest surveys

Average Revenue Per User (ARPU)

Consumer prices

Current Status

Connected homes: 38.000

Rollout progress: 58%

Connect rate: 99%

Subscribers: 11.000

Take rate: 29%

Deployment

Current Network Size

449 Passive POPs

74 Active POPs

2330 Manholes

600 Splice closures

2100 km of Ducts

2700 km of Fiber cables

Deployment

Designed for connecting up to

400, 720 or 1440 homes

Actual connections 100 to 2000

homes pr. POP, 513 on average

Active POP stations

Deployment

Ducts buried in 40-50 cm depth ,

single ducts next to houses on 30 cm

Multi ducts diameter 50 mm, with

8 or 18 micro ducts 7 and 12 mm

Single ducts diameter 10 and 14 mm

Ducts

Deployment

Single mode fiber

Single fiber connected pr. home

Average fiber length between home

and POP is 518 meters

About 25% of fibers not connected

Fiber cables

Deployment

Deployment

Deployment

Indoor Installation

Indoor Installation

Indoor Installation

Indoor Installation

Active Network

Active Ethernet

Layer 2

Active Ethernet

Layer 3/MPLS

Active Ethernet

Layer 3/MPLSPoint-to-point

Network

Single VLAN

per service

Redundancy Redundancy

Max 36

Max 6

Active NetworkNetwork design

About 38.000 IP

numbers of which

12.000 for STBs

10 (2x5)

9 on avg.

3 on avg.

4 (2x2)

Active NetworkCurrent network size

140

40 Gbit/s (2x20)4 Gbit/s (2x2)

2 Gbit/s (2x1)

100 Mbit/s

Experiments with

1Gbit/s started

Active NetworkCurrent network connections

Cisco 76xxCisco 76xxCisco 45xx

Cisco 3550

Cisco ME3400

Telsey CPEs

CPL3, CPL5, CPL7

Active NetworkNetwork equipment

Bandwidth usageBandwidth per subscriber

Who’s paying?

Investment paid by Reykjavik Fiber

Network:

• Passive infrastructure in the ground

and POP stations

• Active Network equipment in POP stations

• Indoor Installation

• Residential Gateway (CPE)

No payments for rights-of-way,

neither to municipalities nor

private land or house owners

No initial payments from homes or

service providers

Who’s paying?

Investment paid by Reykjavik Fiber

Network:

• Passive infrastructure in the ground

and POP stations

• Active Network equipment in POP stations

• Indoor Installation

• Residential Gateway (CPE)

No payments for rights-of-way,

neither to municipalities nor

private land or house owners

No initial payments from homes or

service providers

CAPEX

CAPEX connecting a homeCAPEX adding a subscriber

CAPEX

CAPEX connecting a homeCAPEX adding a subscriber

CAPEX

CAPEX connecting a home CAPEX adding a subscriber

CAPEX connecting a home

and adding a subscriber

Numbers based on actual figures for connecting 38.000 homes and adding 11.000

subscribers together with estimates for remaining homes and subscribers.

CAPEX

Lessons learned°

Select your rollout

strategy carefully

Involve the community

from the start

Treat muncipalities as

partners

Create a strong , long

term, relationship with

service providers

Be prepared to change

things you believed to be

fundamental in the

beginning

Take-up of services is not

instantaneous and

depends on the rollout

progress

Be careful when using

average numbersBuild long lasting infra-

structure for every day

use

Prepare for carrier grade

operations

Thank you – Q&A