It always upsets me a little to hear that Australia is leading the world in FTTH. After all what have they done other than a big announcement and hiring top class consultants?
That seems little compared to the richness of initiatives in France, from big announcements of major operators to local initiatives from municipalities – not mentioning a clarified regulatory framework for sharing infrastructure.
And last month I received a letter signed by three Ministers – I am truly honoured – asking if Covage would participate alongside major operators in a public consortium to fund FTTH deployment and what would be our thoughts on how to structure it.
This initiative has already been announced as a €750M commitment over three years. That’s a far cry from the $43Bn announced by the Australian government. But the French amount is only the seed money whereas the Australian one is the fully leveraged amount. If one adds the funds already committed by operators in dense areas, the past and future contributions from municipalities, the funds coming from the economic stimulus package, and a reasonable financial leverage, the total can qualify as a major national effort.
- It should be an open access consortium. That is the only way to combine efforts from leading operators without being seen as an anti-competitive vehicle by the European Union lawyers.
- An independent entity should manage it. Once the funds have been committed and the strategic objectives defined by the shareholders, the Board should be able to independently decide where and when to start. This guaranties that no shareholder will try to block the consortium to protect its market share in a specific area.
- Consortium members who are also retail operators should commit to buy FTTH lines from the consortium. Quotas could be defined according to market shares. This would ensure that the FTTH deployments are effectively used to provide services to the end users and generate cash flows that, in turn, enable leverage with bank loans.
- A significant share of the Consortium’s resources should be reserved for partnership with local authorities, between 30% and 50%. This would leverage the funds that the local governments are ready to dedicate to FTTH while guarantying them a framework for their investments.