One of the biggest success stories in the world regarding FTTH network deployment is being written in New Zealand. Success is however never achieved without overcoming a significant amount of barriers. Using knowledge obtained from an academic assessment of the initiative, as well as practical experience from the actual deployment, this session provides New Zealand’s answer to important FTTH deployment barriers. Some of the questions that will be tackled are: How to handle the different types of geography? How to manage subcontracting and define the deployment workflow? What about take rates, TCO and funding? This is the presentation from a workshop at the FTTH EU Conference 2016 titled "Learning from Real life cases - key success factors during preparation of a FTTH rollout" organized by iMinds, GE and FiberPlanIT.

1. FTTH Council Europe, February 2016
New Zealand’s Ultra-Fast Broadband project
Marlies Van der Wee
James Wheatley
Jeroen Vanhaverbeke

2. 3 Sessions
13:00 – 14:45 Eir’s experiences
Key Learnings from FTTH deployment in Ireland
15:00 – 16:30 New Zealand’s UFB deployment
Answers to important FTTH deployment barriers
16:45 – 17:30 Handling Business case uncertainties
Exploring ways to improve your business case
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3. Speakers
3
Marlies Van Der Wee
iMinds
James Wheatley
GE
Jeroen Vanhaverbeke
FiberPlanIT

4. A short introduction to New Zealand
Marlies Van der Wee
4

5. New-Zealand
5

6. km2 260,000
millions 4.4
per km2 16
ratio 7
# 2
Some facts about New Zealand
6
<1 person per km2
:

7. Some history
7

8. 2009 National party
OK, but how?

9. Cover an entire nation on a limited budget
Jeroen Vanhaverbeke
9

10. In a perfect world…
100% FTTH coverage
But…
Limited budget
10

11. Impact most expensive homes
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0%
25%
50%
75%
100%
50%60%70%80%90%100%
Investment
Coverage
Exclude most expensive homes
 Maximum Cost/HP?
Big impact on total investment
2 programs
 UFB
 RBI

12. Case study: cost per home
12

13. Case study: cost per home
13

14. Case study: cost per home
14

15. Where is the cut-off?
Methods
 Current connection speed
 Population density
 …
 Cost-coverage analysis
15
Generate deployment cost heat map

16. Budget estimation
How to calculate needed investment
 Tendering
 Funding
Required Accuracy?
Time constraint?
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17. Total cost of ownership
 OPEX vs CAPEX
 OPEX often overlooked
 Active equipment in the field
 Power, maintenance, …
 Leasing
 Dark fibre, ducts, exchange, poles
from utilities, …
17

18. Broadband via two separate projects!
Marlies Van der Wee
18

19. UFB, New-Zealand
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• Public-Private Partnership based on tender
• NZD1.5 billion public investment
• GPON
• Only a wholesale bitstream offer
• no retail services!

20. The Rural Broadband Initiative (RBI)
 Areas not covered by UFB deployment
 speeds of at least 5 Mbps
 90% of rural homes and businesses, all public schools and hospitals
 Procurement of NZD $350 million
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further deployment of VDSL and ADSL2+
Fixed-wireless broadband by upgrading existing and
deploying new base stations

21. UFB progress so far
December 2015
21
UFB
Priority users
Schools in UFB, RBI and remote areas

22. Business model: bitstream open access
22
…

23. Business model: bitstream open access
23
…
Competition local and nationwide
87 in total, typically 10 per area
Own geographical coverage area
BITSTREAM ACCESS

24. Bitstream open access on GPON
24
CO
Point of
Interconnect
ICAB
ONT
1 GB or 10GB
L2 access network
30/10 or 100/50
CO
ONT

25. Funding schemes
25
Funds-recycling
model
Investment
model

26. Funds-Recycling model
26

27. Start planning and deploying!
Jeroen Vanhaverbeke
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28. Rollout order: based on priority users
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 Schools and universities
 Hospitals
 Businesses

29. Alternatives: phased rollout
 Take the cheapest option for every
incremental step?
OR
 Plan the entire network upfront and already
take trenching, duct capacity… of future
rollouts into account in the first phase?
29

30. Case Study: How to do a Phased Rollout?
Source: Municipal driven fiber access network rollout (Van Ooteghem, Casier, De Heyn, et al.)
30

31. Case Study: Results
 Optimizing the network for different phases can lead to significant
differences in CAPEX.
 Results depend on:
 Technological choices
 Labour and material cost
 Size of the phases
 Cost of Capital, estimated time between phases, expected adoption…
play an important role when making a decision.
 Every rollout is different. Planning needs to be done case by case.
31

32. Deployment to non-FTTH areas
Backhaul upgrades
 Cabinet
 Antenna
Connect passed homes
 Low additional cost
 Future proof
32

33. Project cost calculation
Easy!
 ∑ (Equipment x (material cost + labour cost))
But…
All unit costs known?
Equipment volume correctly estimated?
Unforeseen costs?
33
Shared
driveways

34. Project cost calculation
Easy!
 ∑ (Equipment x (material cost + labour cost))
But…
All unit costs known?
Equipment volume correctly estimated?
Unforeseen costs?
34
Shared
driveways

35. Increased complexity
35
Depending on regional legislation
Frequently with subcontractors

36. How to tackle increased complexity
Chorus
 Started rolling out in 2011
 Now in year 6 of the 9-year build plan
 Phased approach per year
 Roll-out rules and techniques are reviewed and improved
 Design rules per year
 Chorus developed a "ruggidised" cable that can be either surface
mounted (e.g. on fences) or shallow buried
37

37. Costs at customer activation
 Design decision!
 Impact on time to activate
 Skills
 Unexpected problems?
 Cost per Home Passed vs Home Activated
 Adoption rate?
 Design rules/Architecture impact
38

38. Managing the network build
James Wheatley
39

39. Managing the build
 FTTH deployments are big construction projects
 Hundreds of tasks to be completed by many crews
 How to efficiently manage all this work?
 How to report out to senior management on progress?
 How to manage multiple sub-contractors?
 How to identify tasks that are held up?
 How to assign tasks to the right resources?
 How to keep track of status of each task?
 Use a work management solution to manage it all
40

40. 41
Reduce average Cost per Premise Passed (CPPP)
from NZ$3,500 to less than NZ$1,500
The original challenge for Chorus

41. Field Engineer
Designer
Coordinator
Resource Pool
Design
Civil Works
Connection
Feasibility
Jobs & Tasks
Manager
Standardised
Processes &
Data Structure
… etc.… etc.
How work management solutions can help
42

42. Processes & procedures define how things need
to be done and by whom
What needs to be done gets loaded & organised in work management solution
Work management then helps assign,
schedule, manage & report on these items
Work management done right
43

43. Benefits of work management solutions
44
Enables process
optimisation, eliminates
waste, automates manual
tasks and removes
bottlenecks
Removes the barriers to effective contractor management by providing a
collaborative operating model between the operator and its contractors
Provides real-time
strategic business
intelligence and detailed
reporting
Deploys operational
controls to ensure work is
completed on time, in full
and to specification
Reduces project management
& administration costs –
including analysis, reporting,
document management &
communication

44. Current situation at Chorus
45
Cost Per Premise Passed:
Projected to be NZ$2,134
Now: within range of NZ$1,700 to NZ$1,770

45. Session wrap-up
Marlies Van der Wee
46

46. Something to remember?
 Clear government role in fiber deployment
 Significant control in return for direct investment
 Cost-coverage trade-off in design decision
 Led to two separate projects: UFB and RBI
 Phased approach: learning as-you-go
 Supported by work management solution
47

47. Next steps for New Zealand?
 Reducing uncertainty in regulation
 Revision of the Telecommunications Act of 2001
 Different proposals…
 Extension to both projects
 FTTH to at least 80% of homes
 Mobile Black Spot Fund
-> coverage to highways and key tourist areas
48
?

48. FTTH Council Europe, February 2016
Thank you for your attention!
Any questions?
www.technoeconomics.ugent.be