WHITE PAPER Guide to Successful Fibre Business Models Involving and Rewarding Private Financing - FTTH Council Europe
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WHITE PAPER
Guide to Successful Fibre
Business Models Involving
and Rewarding Private
Financing
Yves Blondeel
Managing Director, T-REGS
Florian Damas
Head of Policy & Regulatory Affairs, Nokia
Kim Niklas Wernecke
Relationship Manager, Hamburg Commercial Bank
Full fibre for a digital and sustainable Europe
Disclaimer
The cut-off date for information and metrics included in this White Paper is the end of the year
2020 (including information and financial data published in 2021 corresponding Quarter 4
2020 or full-year 2020 where available).
The information in this document is provided as a basis for discussion.
This information does not necessarily represent the official position of the FTTH Council Europe.
Some of the content may reflect the position of members of the FTTH Council Europe and/or
our partners.
Reference to any products, services or technology does not constitute or imply its endorsement
sponsorship or recommendation by the FTTH Council Europe. The information is provided on
a professional best effort basis. The FTTH Council Europe makes no guarantee of fitness for a
particular purpose. No liability is accepted by the FTTH Council Europe for any consequential
loss or damage whatsoever, however caused. All trademarks are acknowledged by the FTTH
Council Europe as being the property of their respective owners.
For further information, feedback and input please contact the secretariat of the FTTH Council
Europe, at info@ftthcouncil.eu.
© 2021 FTTH Council Europe asbl. All rights reserved. This material or any portion hereof may
not be reprinted, sold or redistributed to any other party without the written consent of FTTH
Council Europe asbl.
2 Full fibre for a digital and sustainable EuropeIntroduction
This White Paper presents key insights gained from an in-depth study of 8 business models for rolling out Fibre-to-
the-Home (FTTH) and Fibre-to-the-Office (FTTO) networks.
It provides a descriptive name for each business model, and identifies the key financial de-risking features associated
with it (e.g. positioning on retail and wholesale markets, clustering of fibre roll-out projects). It also identifies 8
European companies that are representative for these models and that have achieved large-scale fibre roll-out. The
concluding section draws-out key commonalities among the financial de-risking strategies implemented to attract
the large amounts of private financing required.
The 8 companies studied have become “build-out machines”, scaling-up rapidly by clustering projects in different
geographic areas, and taken together represent:
u 20m homes passed with FTTH at end-2020 (>40m if minority co-financing is included).
u 45m homes to be passed with FTTH by end-2025 (>75m if incl. minority co-financing).
A full description of the 8 business models, and in-depth profiles of 8 selected
European companies and their metrics and history, is contained in the Guide to
Successful Fibre Business Models Involving and Rewarding Private Financing. The
Guide also identifies the companies’ major shareholders, profiles their reference
shareholders, and summarises their fundraising operations, including loans granted
by consortia of banks, changes in ownership, the creation of separate companies to
hold fibre assets, etc. Its table of contents is provided at the end of this White Paper.
The 70-page complete Guide is available separately from the FTTH Council Europe.
It is made freely available to all members of FTTH Council Europe and it is sold
digitally to non-members at a price of €950 + VAT (if applicable) una tantum.
REQUEST YOUR COPY OF THE FULL GUIDE
Full fibre for a digital and sustainable Europe 3Regarding the FTTH Council Europe
The FTTH Council Europe is an industry organisation with a mission to advance ubiquitous full fibre
based connectivity to the whole of Europe. Our vision is that fibre connectivity will transform and
enhance the way we live, do business and interact, connecting everyone and everything, everywhere.
Fibre is the future-proof, climate-friendly infrastructure which is a crucial prerequisite for safeguarding
Europe’s global competitiveness while playing a leading global role in sustainability.
The FTTH Council Europe consists of more than 150 member companies.
Please visit our website for more information: www.ftthcouncil.eu
About the Investors Committee
The Investors Committee was originally formed as the Fibre Business Models Committee at the spring General
Assembly 2017, and renamed and given a new mission statement at the spring General Assembly 2021. The
Committee discusses the economics for fibre deployment in all types of geographic areas and the business
models developed by operators active on retail and wholesale markets. With publications such as this Guide,
it reviews and evaluates real-world proven fibre business models and new developments, including financing
modalities for fibre roll-out.
4 Full fibre for a digital and sustainable EuropeBrief Description
of the 8 Business Models,
and a representative
company for each model
Full fibre for a digital and sustainable Europe 5An introductory overview of the 8 business models is provided below, with each header containing a
descriptive name for the corresponding business model. Key financial de-risking features of each model
are presented, and a representative European company is identified.
6 Full fibre for a digital and sustainable EuropeModel 1: Retail FTTH+FTTO demand aggregation
Financial de-risking is based on securing a guaranteed initial retail customer base, consisting of
residential consumers buying broadband internet bundles, business customers, and public sector
customers.
Key features:
u Conclusion of a framework agreement with a municipal authority to enable fibre roll-out (e.g. building
permits).
u Launching a campaign to convince the population/businesses to commit to becoming a customer
(24-month contract).
u If 30-40% of the targeted demographics agree, the fibre network is built. Bank loans finance the build.
u Capital is reinjected in geographic expansion. Venture capital funds and Infrastructure Funds put a ‘turbo’
on expansion.
Representative company: Deutsche Glasfaser (Germany).
Model 2: Wholesale anchor tenant(s)
Financial de-risking is based on securing long-term purchasing commitments (e.g. a percentage of FTTH
lines, fibre backhaul for a large number of mobile sites) by one or more initial wholesale customers.
Key features:
u Signing of binding wholesale take-up commitments (e.g. with a major challenger consumer broadband
provider for fibre-based access committing for a % of lines, and with a mobile operator for fibre backhaul);
this is the ‘anchor tenant’ concept (analogous to the first (few) tenants to sign a lease to apartments in a
building).
u Wholesale relationship with anchor tenants characterized by partnership rather than rivalry (the relationship
between the telecom incumbent and alternative operators is often difficult due to the presence of both
on retail markets).
u Capital and loans + increasing wholesale revenues to expand the geographic footprint (the more the
company builds, the more connection and rental revenue it earns). Infrastructure Funds support rapid and
massive expansion to secure a lasting wholesale market position.
Representative company: CityFibre (UK).
Model 3: Wholesale-only
Financial de-risking is based on securing wholesale deals with many challenger broadband and business
services operators (active on consumer and business markets)
Key features:
u Signing of wholesale agreements with all major retail xDSL broadband/bundle operators, to put all their
new customers onto the fibre network instead of xDSL wholesale from the telecom incumbent.
u Over time, migrate the entire customer base from xDSL to fibre.
u Revenues increase as migration from copper to fibre progresses.
u Revenues, capital and loans to expand the geographic footprint. Bank consortia support ambitious
geographic replication to a large number of cities/areas.
Representative company: OpenFiber (Italy).
Full fibre for a digital and sustainable Europe 7Model 4: Focus on meeting high-quality/high-reliability
demand (FTTO/Base Station/Data Centre)
Financial de-risking is based on long-term contracts with mobile operators for backhaul (>10-year
period) and with businesses/public administrations (5-year period or more).
Key features:
u Meet high-end connectivity needs of customers with high willingness to pay, such as businesses (offices,
factories), data centres, public administrations, hospitals, universities, mobile backhaul.
u Present on both retail and wholesale markets, seeking high market share in the segment of business
services and wholesale markets.
u Venture capital funding. Profits are reinjected into aggressive business expansion and acquisitions (also
in adjacent markets, e.g. data centres).
Representative company: Eurofiber (Netherlands, Belgium, France, Germany).
Model 5: Vertically integrated telecom incumbent – rapid
fibre transition
Financial de-risking is based on cementing market leadership in all nationwide B2C, B2B and wholesale
markets.
Key features
u Fibre to everything nationwide.
u Rapid roll-out to stave off competition from hybrid-fibre cable networks or other fibre network operators.
u OPEX cost-reduction and quality improvement (fewer buildings and less equipment to maintain, fewer
network faults to repair than for copper networks).
u Sale of stakes in the fibre infrastructure to financial investors and offering wholesale access to other
operators to avoid the emergence of competing fibre networks.
Sample company: Altice (Portugal).
Model 6: Minority co-financing of third-party fibre
infrastructure
Financial de-risking is achieved by participating financially in the fibre build led by a third party (to
become a part-owner of a single or main fibre network in a given geographic area).
Key features:
u Conclusion of an agreement to co-finance a single fibre network on a minority basis, based on market
share or expected market share (e.g. lead investor 75%, Alternative Operator X 20%, Alternative Operator
Y 5%).
u The lead investor receives upfront cash and recurring maintenance payments. The alternative operators
receive long-term network access (e.g. Indefeasible Rights of Use (IRUs) for 40 years) instead of paying
monthly rental fees as they do for wholesale access to the telecom incumbent’s copper network.
u Sale of stakes in fibre infrastructure and in IRUs booked as assets to financial investors (such financial
transactions are possible for both the lead investor and for the minority co-financiers, acting independently
8 Full fibre for a digital and sustainable Europefrom each other).
u Infrastructure Funds + bank loans to support network expansion through further minority co-financing to
secure a long-term position on fibre lines in as many geographic areas as possible.
Representative company: Investissements dans la Fibre des Territoires (IFT) – the minority co-financing vehicle holding
alternative operator Free’s IRUs (France).
Model 7: Concession models - private company granted
rights by a public authority
Financial de-risking is based on a 15-35 year concession from a regional or local government to build
and operate the single fibre network in a less dense area.
Key features:
u A public authority tenders for an exclusive concession to build a widespread fibre network in a given area
where purely private investment is not attractive. The tenderer asking for the lowest subsidy amount wins
(subsidy can be zero).
u Once a tender is won, the operator seeks to secure wholesale customers. Bank financing is readily
available to support a business case in which essentially all B2C and B2B operators purchase wholesale
access in the concession’s footprint.
u Wholesale revenues from all retail operators (copper incumbent, hybrid-fibre-coax incumbent and
alternative operators in B2C and B2B markets).
u The minority co-financing model can also apply to concession holders.
u Full migration from copper to fibre can be expected over time under a stable regulatory framework (i.e.
the customers are moved from the incumbent’s copper network to the concession holder’s new fibre
infrastructure).
u Infrastructure Funds + bank loans to fund expansions (winning more concessions in other geographic
areas and acquiring other concession holders).
Representative company: Altitude Infra (France).
Model 8: Ultra-rural retail + wholesale to ensure high
network utilization
Financial de-risking is based on ensuring high network utilization (>70% of lines with paying customers)
which enables paying back the high CAPEX for building-out a rural area.
Key features:
u Attract wholesale customers (telecom incumbent, large cable companies, mobile operators) with
favourable terms that avert the risk of these companies engaging in fibre overbuild.
u Assured non-preference for the company’s own retail arm to convince wholesale customers to sign up.
u Make life easy for wholesale customers (arrange backhaul to main cities, support for the installation of
retailers’ modem/router/set-top boxes at end-user premises).
u Full separation of retail and wholesale arms.
u Secure State Aid for fibre in ultra-rural areas.
u Infrastructure Funds support the development financially towards a profitable long-term exclusive
infrastructure ownership.
Sample company: INEA (Poland).
Full fibre for a digital and sustainable Europe 9Conclusions
And key commonalities among the financial
de-risking strategies implemented by
companies to attract the large amounts of
private financing required for
large-scale fibre roll-out
10 Full fibre for a digital and sustainable EuropeThe 8 European companies identified as representative for the 8 business models
described in this White Paper have achieved considerable success as businesses,
attracting retail clients (consumers, businesses, and public administrations) on fibre
networks on a large scale. The companies have also succeeded in developing wholesale
markets, in several cases as wholesale-only businesses, or businesses with a strong
commitment to wholesaling Fibre-to-the-Home (FTTH)/Fibre-to-the-Office (FTTO) to
third parties, alongside their retail activities.
It is noteworthy in this context that several companies have trended towards wholesale
as their primary or sole activity. Indeed, 4 out of 8 of the business models described in
this White Paper are trending towards being wholesale-only models, and the sample
companies profiled reflect this trend.
The 8 companies identified as representative have attracted billions of euros in private
financing, increasingly from Infrastructure Funds taking a long-term position in the
context of solid plans that are executed assuredly, leading to the rapid build-out of
millions of fibre lines according to well-documented plans.
While in some cases, there is a role for public sector institutions in financing the profiled
companies, such role is minor (often rather as an addition than as the core element of
financing rounds).
Fibre investments in rural areas
Even as networks are extended to less densely populated areas, the proportion of public
financing/funding (including State Aid) per connected premise is declining (in some
cases to zero) as businesses have reached a level of predictability, notably on account
of their scale, and (quasi) assured wholesale long-term revenue streams. Fibre has
therefore become a readily ‘investable’ market for private investors, including in rural
areas.
A tipping point has been reached: fibre investment without government funding has
gained strong momentum, even if there certainly remain areas where public funding will
be necessary.
Sources of financing
Several companies identified in this White Paper (and profiled in-depth in the Guide)
have seen strong changes in their shareholders and lenders over time, both in terms
of equity investors (i.e. the shareholders) and in terms of lenders (i.e. bondholders
and banks). The increasing presence of specialist Infrastructure Funds (many of
whom have a background in non-telecom infrastructures) in the share capital and
lending instruments is particularly noteworthy. The in-depth Guide contains a profile
of key private financiers for each of the 8 companies described. These Infrastructure
Funds attract more traditional pension funds and insurance companies as sources of
financing (i.e. risk-averse long-term investors). This is a relatively recent phenomenon,
with companies often having initially been founded by entrepreneurs, then funded by
Venture Capitalists with a relatively short-term horizon, which in several cases have sold
out to Infrastructure Funds, as they have reached a different life-cycle stage. This is the
stage where businesses have become “build-out machines” with clear long-term targets
in terms of the geography of build-out, the number of lines to be built, and the way in
which revenues are going to flow in on a solid recurring basis.
Full fibre for a digital and sustainable Europe 11In sum, the businesses have become relatively predictable, and thus lower-risk
investment propositions, attracting a new class of more risk-averse private financiers.
State of the art of fibre coverage
The extent of planned fibre build-out is very considerable. For instance, in the cases
of Portugal and France (represented in this White Paper by Models 5, 6, and 7), quasi-
ubiquitous (>95% of population) fibre coverage of households and other locations is
firmly within reach, i.e. scheduled for completion at the end of 2025.
In these two countries, and elsewhere the “build-out machines” that are active are well
on their way to achieving their own targets, contributing towards achieving government
policy targets (often various companies co-operating and competing with each other
in various ways). In other countries, very ambitious companies have done their part to
kick-start FTTH build-out, and are hard at work to deploy on a massive scale, in the high
single millions of lines in Germany (Model 1) and the UK (Model 2), and even double
digit millions of lines in Italy (Model 3).
Even low-density areas are being covered at speed with FTTH, as is evidenced in
particular in our description of Models 1 (Germany – with a focus on smaller villages and
towns), 3 (Italy – including many remote areas), 5 (the vertically integrated incumbent,
and others, covering the whole territory of Portugal), 6 and 7 (concessions for less dense
areas in France, with minority co-financing by one or more operators in many cases).
Model 8 (Poland) is focused entirely on ultra-rural areas, where build-out is also being
executed successfully.
Commonalities among Business Models’ key de-risking
elements
This White Paper has identified, for each of the 8 real-world business models described,
the key financial de-risking elements of the model. The full Guide illustrates this in depth
through the profiles of the 8 representative companies selected.
Some clear commonalities among the Business Models’ key de-risking elements exist.
They are, among others, as follows:
u Securing solid recurring revenue streams (retail and/or wholesale) is key to
attracting private investors (all models). This has been done by essentially
by means of the following strategies:
w Demand aggregation and upfront contractual commitments on retail
markets, both for consumer markets and business services markets
(Models 1 and 4).
w Securing (upfront) commitments from wholesale access takers that
already have a large retail customer base (Models 1, 2, 3, 6, 7, 8),
including to migrate customers from legacy networks to the new fibre
network, and by complementing the business with the provision of
mobile backhaul, usually on a long-term contract basis (Models 1, 2, 3,
4, 6, 7, 8).
w Having a pre-existing important position on retail markets (Models 5, 6
and 8).
u Customer centricity and excellence (all models):
w Providing faster speeds than xDSL and hybrid-fibre coax networks,
and superior quality, meeting (latent or explicit) needs of retail and
12 Full fibre for a digital and sustainable Europewholesale customers. Demand can be for fast(er) and more reliable
broadband and for tailored high-capacity/high-reliability fibre-based
services (Model 4).
w A non-adversarial relationship with wholesale customers (e.g. clarity
that the provider will not compete on retail markets (Models 2, 3, and
7). In some cases, contractually guaranteed explicit non-discrimination
of wholesale customers where the provider is present on both retail
and wholesale markets (Models 5 and 8) is offered.
w Offering suitable wholesale products, including passive (dark fibre,
optical wavelengths) connections (prevalent in Models 1, 3, 4, 5, 6,
7) alongside active bitstream, GPON/XGS-PON technologies, point-
to-point technologies, and in some cases wholesale internet access
as an option, is also essential to meet the demand of sophisticated
(wholesale) customers.
u Providing (or preparing to provide) ‘fibre to everything’ (all models). The
business models and the sample companies, show that operators are not
focusing on FTTH for consumers only, but are also pursuing all retail and
wholesale opportunities, including connectivity to businesses and public
administrations, educational establishments, hospitals, etc. In addition,
mobile backhaul is increasingly also an area of focus, including being
ready for extending the network in response to demand (e.g. for 5G small
cell extension in future).
u In terms of fibre network topology, it is noteworthy that nearly all operators
deploy a point to multipoint architecture primarily, thereby minimizing the
number of fibres in the feeder segment (from the central office to the street
cabinet or equivalent), while ensuring that point-to-point connections
can also be delivered for use cases demanding dedicated connectivity
solutions. This reduces the number of optical components required in
the central office. Not only does this enable cost reduction (in equipment
terms and energy terms), it is also aligned with CO2 reduction objectives
(European Green Deal).
u Avoiding or averting local access network competition, where possible, by
avoiding build-out in areas already served by hybrid-fibre-coax networks
and by granting wholesale access on attractive terms to avoid that the new
fibre networks are overbuilt by the telecom incumbent or by others.
u The ambition and the ability to scale up and industrialize to become a
“building machine” is essential for securing private long-term investors.
Specifically, clustering smaller projects (e.g. fibre builds in many tens or
hundreds of villages (esp. Models 1, 3, 6, 7 and 8), multiple cities and city
areas (esp. Models 2, 3, 5 and 6) into one or multiple ‘bankable’ projects
worth tens or hundreds of millions of Euros, or even billions, is what has
driven the success of the companies profiled in depth in the Guide.
u Offering co-financing by minority investors and/or entering into minority
co-financing deals (Models 6 and 7) and sale of a portion of the fibre
infrastructure or of a stake in a special purpose company to infrastructure
investors (Models 5 and 6).
Full fibre for a digital and sustainable Europe 13Convergence between Business Models
Some models described appear to be converging with one another over time. For
instance, the wholesale anchor tenant approach, whereby a strong upfront commitment
is made by one or a few wholesale access takers (Model 2) is and remains highly
relevant, but once successful, it trends towards a more regular wholesale-only model,
where a wide range of wholesale access takers is actively pursued.
The roles of the national governments, the national regulatory authority, and municipal
authorities in charge of permits and rights-of-way are often very important. In some
countries (notably France and Poland, as represented in Models 6, 7, and 8) policies and
regulation are a driver for specificities of the business models that are described (e.g.
minority co-financing, concession models, scope of state support). This can lead to a
specific set of circumstances that is not readily replicable in other countries.
What’s next for fibre business models?
Further refinement and development of various companies’ activities and the 8 stylized
business models described in this White Paper is certain to occur in the future. Merger
and acquisition activity is occurring in the fibre infrastructure sector, and is likely to
continue apace, with clear consequences for business models and the companies
pursuing them. Business models are both refining and developing over time, with some
models increasing in relevance as they are more widely adopted and financed to enable
massive scale.
14 Full fibre for a digital and sustainable EuropeTable of contents of the full guide
Regarding the FTTH Council Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Introduction 7
Brief description of the 8 Business Models, and a representative company for each model . . . . 7
Model 1: Retail FTTH-FTTO demand aggregation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Model 2: Wholesale anchor tenant(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Model 3: Wholesale only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Model 4: Focus on meeting high-quality/high -reliability demand (FTTO/Base Station/Data Center).. . . 10
Model 5: Vertically integrated telecom incumbent – rapid fibre transition . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Model 6: Minority co-financing of third-party fibre infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Model 7: Concession models -private company granted rights by a public authority . . . . . . . . . . . . . . . . . 11
Model 8: Ultra-rural retail + wholesale to ensure high network utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Model 1: Retail FTTH+FTTO demand aggregation 12
Geographic area / scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Market positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Key components of financial de-risking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Typical retail and/or wholesale strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Companies representative for this model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Sample company (profile): Deutsche Glasfaser (Germany) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Coverage metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Technology choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Retail and wholesale services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Sample private financier (profile): EQT Infrastructure (Sweden) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Model 2: Wholesale anchor tentant(s) 17
Geographic area / scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Market positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Key components of financial de-risking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Typical retail and/or wholesale strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Company representative for this model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Sample company (profile): City Fibre (UK) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Coverage metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Company history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Technology choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Wholesale and retail services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Role of regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Sample private financier (profile): Antin Infrastructure Partners (France/UK) . . . . . . . . . . . . . . . . . . 21
Model 3: Wholesale only 22
Geographic area / scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Key components of financial de-risking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Market positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Companies representative for this model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Sample company (profile): Open Fiber (Italy) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Coverage metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Full fibre for a digital and sustainable Europe 15Table of contents of the full guide
Company history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Wholesale services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Technology choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Role of regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Sample private financier (profile): CDP (Italy) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Model 4: Focus on meeting high-quality/high-reliability demand
(FTTO/Base Station/Data Centre) 27
Geographic area / scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Market positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Key elements of financial de-risking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Companies representative for this model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Sample company (profile): Eurofiber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Coverage metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Company history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Presentation of Eurofiber’s key figures (February 2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Wholesale and retail services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Technology choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Sample private financier (profile): Antin Infrastructure Partners (France/UK) . . . . . . . . . . . . . . . . . . 31
Model 5: Vertically integrated telecom incumbent – rapid fibre
transition 33
Geographic area / scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Market positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Key components of financial de-risking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Companies representative for this model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Sample company (profile): Altice (Portugal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Coverage metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Focus on rural areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Network architecture and technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
CAPEX and OPEX impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Retail and wholesale services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Sample private financiers (profiles): Altice Europe and Morgan Stanley Infrastructure Partners . 38
Model 6: Minority co-financing of third-party fibre infrastructure 39
Important Note on co-investment in application of Article 76 EECC . . . . . . . . . . . . . . . . . . . . . . . . 40
Geographic area / scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Short description of the French FTTH market situation and co-financing principles . . . . . . . . . . . 40
Origin and key features of the French symmetric regulation and co-financing model . . . . . . . . . 42
Market positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Key components of financial de-risking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Companies representative for this model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Sample company (profile): Free - IFT (France)
Minority co-financier of lead investments initiated by Orange France, and by operators of
16 Full fibre for a digital and sustainable Europeconcession fibre networks (concession models are described in Model 7) . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Coverage metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Network architecture and technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Retail and wholesale services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Role of regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Sample private financier (profile): InfraVia Capital (France) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Model 7: Concession models - private company granted rights by a
public authority 49
Geographic area / scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Key features of the concession model and description of the origin
of the French concession model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Market positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Key components of financial de-risking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Companies representative for this model (focus on French “RIP” concession holders) . . . . . . . . . 52
Sample company (profile): Altitude Infra (group of 5 entities) (France) . . . . . . . . . . . . . . . . . . . . . . 53
Coverage metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Network architecture and technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Wholesale services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Role of regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Sample private financier (profile): UBS Asset Management Real Estate and Private Markets
(Switzerland) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Model 8: Ultra rural retail + wholesale to ensure high network
utilization 57
Geographic area / scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Market positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Key components of financial de-risking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Capital and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Companies representative for this model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Sample company (profile): INEA (Poland) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Coverage metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Company history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Technology choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Retail and wholesale services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Sample private financier (profile): Macquarie Infrastructure and Real Assets (Australia) . . . . . . . 61
Conclusions 62
Glossary 67
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