Telekom needs FTTx state funding; satellite filling gaps in meantime

13 May 2013

Slovenian incumbent operator Telekom Slovenije’s head of fixed access network development, Rok Cotic, has underlined the challenges faced in rolling out FTTx services to meet the European Union (EU) 2020 digital agenda goals. Speaking at the recent Telecoms IQ FTTx Summit in Berlin, Mr Cotic pointed out that specific challenges in Slovenia included the relatively rural nature of the country – with just 16 cities having over 10,000 population and only two significantly large cities. 97% of Slovenian territory is classed as ‘rural/suburban’, with 52% of households falling within these zones. In the ‘rural/suburban’ zones there is ‘no commercial interest’ in constructing new high speed broadband networks, due to low population density and difficult terrain, Mr Cotic stated – although as reported previously by TeleGeography’s CommsUpdate this assertion was contested by Slovenian rural fibre provider Vahta at the FTTx Summit.

Despite the challenges, Mr Cotic remains confident that Telekom Slovenije – which is currently playing catch-up with alternative fibre providers such as T-2 and Amis – will enable the country to reach a goal of 50% of all homes connected with 100Mbps services, a target he said it is ‘likely’ to achieve by the EU 2020 deadline. So far, Telekom offers 30Mbps-plus services in selected areas, and is aiming to expand this footprint as per the EU agenda, but Mr Cotic added that the telco (which is state-owned but in line for privatisation) will ‘definitely need’ further state/EU funding support. According to the fixed network executive, Telekom is prepared to invest 30% of the costs of rolling out a new national open (passive) broadband access network from its own funds, but considers that the other 70% should come from the Slovenian government/EU. Possible access solutions for achieving the 2020 goals include FTTN/VDSL2, FTTH and LTE 800MHz mobile broadband. In answer to a question from TeleGeography, Mr Cotic confirmed that Telekom – which commercially launched LTE mobile broadband services in 27 cities/towns in March – is not looking at LTE as a ‘fibre broadband replacement’ but considers it as an option only in rural areas which have no high speed fixed broadband access.

In addition, Cotic stated that the Slovenian incumbent wants further changes to regulations relating to fibre, before it is satisfied with the commercial operating environment. In the meantime alternative access methods including satellite offer an immediate solution to providing universal broadband access.

Last Friday (10 May 2013), Eutelsat Communications agreed to provide Telekom Slovenije with satellite broadband services to cover the almost 90,000 homes – roughly 10% of the country’s total – which remain unserved by fixed broadband networks. The new consumer satellite broadband service provided by Eutelsat’s KA-SAT satellite operates with a small (77cm) satellite dish and modem. Simon Furlan, marketing director at Telekom Slovenije said: ‘High speed internet access has become an essential service for consumers, providing access to education, entertainment and public services. This agreement ensures that our customers, wherever they live in the country, will be able to access reliable, high speed broadband services today.’ Jean-Francois Fenech, general manager of Eutelsat’s Broadband Business unit, added: ‘Eutelsat’s satellite broadband solution was designed specifically to help Europe’s telecom providers to provide a universal, high speed internet service to their customers, wherever their location.’

According to Mr Cotic – responding to questions in an interactive session at the FTTx Summit – in Slovenia the situation whereby copper lines begin to be phased out by fibre as the main access technology is ‘at least five years’ away. A fellow panelist, Deutsche Telekom (DT) representative Marcus Weinkopf, estimated a longer timeframe in Germany, saying that it would be ‘over ten years’ before fibre became the main focus for access technology ahead of copper at DT. In stark contrast, Andorra Telecom’s former CEO Jaume Salvat told the conference that Andorra will switch off copper DSL services in 2015 and become a fibre-only nation. Earlier he presented Andorra Telecom’s FTTH rollout – which took two years to cover 100% of the population, with around 59% household service penetration currently – as a model case for other telcos. Responding to a question from TeleGeography, Mr Salvat admitted that the 100% FTTH business model employed in the tiny country would be impossible to fully replicate across larger European countries in a single phase, although he stressed that the strategy is suitable for rollouts on a region-by-region basis.