Calculating the cost of the fibre local loop in France
Expertise : Regulation
- In the context of FTTH deployments in France, a major telecom operator contended that the planned regulatory policy which promoted competition in infrastructure was very inefficient from an economic point of view.
- The operator therefore asked TERA Consultants to build a cost model of fibre network deployment and develop economic analyses that can support the client in public debate by promoting another form of regulation.
TERA Consultants proceeded to construct a fully configurable bottom-up model to simulate the cost of fibre deployment in France:
- Taking into account the data at each of the 36,000 localities in France,
- With a simulation of the cost of infrastructure,
- An evaluation of the cost of capital and of the risk premium,
- FTTH business plan simulation.
Benefits and results
- The results of the model and the economic analyses were presented to the National Assembly in the context of the public debate on the deployment of fibre network and have been published in The Journal of Regulation.
- The model itself has been used successfully in a settlement between operators.