FTTH (fiber-to-the-home) in Europe is on the rise, with FTTH/B coverage reaching 62.3 percent of households in the EU39 by the end of 2022, and 49.5 percent of homes passed being subscribed to fiber-based services. While it is still too early to discuss numbers for 2023, the next FTTH/B Market Panorama report, to be presented at the upcoming FTTH Conference 2024, is expected to show a continuation of this growth in coverage and adoption. One of the fundamental drivers behind this positive evolution is the proactive approach of European institutions and regulatory bodies, placing connectivity as a top priority on their agenda. In fact, in 2022, the European Commission proposed important initiatives for the sector, such as the proposed Gigabit Infrastructure Act (GIA) and the proposed Gigabit Connectivity Recommendation (GCR).
This favorable regulatory framework is creating the right conditions to attract private investors, and consequent to the positive trend we observe in FTTH deployment and penetration figures across the region, we are optimistic about the mid-term evolution of the European market. However, many are the challenges that our industry will need to address in the short term:
After the exceptional investment surge we observed in the past months, private investors are now showing a more cautious approach when it comes to fiber financing, as a result of the higher interest rates currently impacting the market. Monetization is, therefore, becoming crucial, and the investors’ attention is now transitioning from deployment to adoption figures. This trend finds confirmation in the latest report produced by the Investors Committee of the FTTH Council Europe in collaboration with Macquarie: “Overview of fiber financing transactions in selected European Countries.” The asset, updated twice a year, provides details of financing volumes, banks involved, financial and legal advisors, and build-out targets of country-specific transactions seen in the market, while analyzing current trends and risk factors.
Since fiber take-up becomes the main focus for private investors, as a critical performance indicator for return on investments, the industry needs to find new effective ways to accelerate adoption. A contribution to this issue was given by the latest study produced by our Policy & Regulation Committee, titled “FTTH/B Demand Drivers and Hurdles in Europe.” By carrying out a thorough analysis of the FTTH Council Europe data and doing a deep dive into eight selected countries, the study provides a series of recommended measures that both policymakers and industry executives will find useful when considering how to increase the FTTH adoption.
The decommissioning of copper networks should be the ultimate goal for our industry, as it represents the main prerequisite to complete fiber deployment and boost adoption. While the FTTH Council Europe favours the efforts made by European NRAs in the context of copper switch-off regulations, it is worth considering that the notice period for incumbent operators to notify their national regulatory authority varies from 5 years in Portugal to 6 months in Denmark (most common is 2 years). In this situation, it is really the maturity of fiber network roll-out that influences the incumbents’ communication about their plans to switch off the copper networks. Some operators have already published a definitive date for the total switch-off of their copper networks, such as Telefónica in Spain by 2024, Telenor in Norway by 2025, Telia in Sweden by 2026, and Orange in France by 2030.
Copper switch-off is also essential to reap the benefits of FTTH in terms of energy efficiency and reduction of carbon emissions. In fact, sustainability has now reached strategic relevance for the FTTH Council Europe, and we are pleased to engage with the industry in a series of initiatives:
- Earlier this year, the FTTH Council Europe kicked-off an ambitious program to help its members efficiently track their carbon footprint, with the ultimate goal of helping the entire supply chain acknowledge the real impact of their operations on the environment;
- In parallel, we are partnering with the International Communications Union (ITU) in the context of Green Digital Action at COP28, an initiative that gathers big techs and large players across the globe to work together on a set of concrete and tangible proposals to step up digital-technology-driven climate action from the ICT sector.
Nevertheless, what happens at the European level is not disconnected from the other regions of the globe, as in an interconnected world the importance of a comprehensive analysis of global regulatory and policy frameworks cannot be overstated. With this in mind, the FTTH Councils Global Alliance (FCGA) has recently launched its flagship initiative for 2023 – the “FCGA Global Policy & Regulation Review.” This comprehensive review highlights the significance of global policies and regulations in shaping the trajectory of FTTH deployment across the world, by providing a panoramic view of the current landscape, examining the multifaceted roles of policy and regulation in shaping the future of FTTH infrastructure deployment.
In our view, the ultimate goal of this set of global policies and regulations should be to accelerate FTTH adoption worldwide for the benefit of all. In this regard, juxtaposing different regulatory and policy landscapes makes it possible to identify and disseminate best practices, building a foundation for refining and promoting a more efficient and effective approach to FTTH deployment.
If you are interested in learning more about the evolution of the FTTH industry, its main priorities, and challenges, there is much you can reap from the program of the upcoming FTTH Conference, happening in Berlin from March 19–21, 2024. The next edition of the event is set to be our largest yet, as it coincides with the celebration of the 20th anniversary of the FTTH Council Europe. Make sure not to miss it!