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Benoit: Fiber Costs $1,000/home, Needs 30+% Takeup For Payback
Written by Dave Burstein   
Saturday, 20 June 2009 11:25

Benoit Felten has emerged as the most interesting fiber analyst in Europe. His new Yankee Group report suggests takeup, not price, is the key to reaching Fiber_payback_benoitbreakeven on fiber. Since rapid takeup is important, Felten thinks “open access” is a good policy for fiber providers, bringing in more customers.

“Increasing takeup seems to have a much more dramatic effect on reducing payback than increasing ARPU. Getting payback from an FTTH deployment in less than five years is virtually impossible without at least 30 percent initial takeup.” He adds, “Five years seems to be the absolute longest amount of time that telco shareholders are willing to invest.”

The pride of Ivan Seidenberg and Xavier Niel has created important exceptions, but otherwise most Western fiber builds have government or electric utility support. They can wait longer for returns.

Felten believes “No matter what the ARPU level is, most reasonably successful FTTH deployments (in the 35 percent to 40 percent takeup range) should expect payback within 10 years.” A smart country will find a way.