Center for Information and Communication Technologies Techno-Economics of Residential Broadband Copenhagen, June 20, 2006 Halldor Matthias Sigurdsson

Center for Information and Communication Technologies Techno-Economics of Residential Broadband Page 2 Motivation Objectives  Economic Evaluation –Feasibility, strategy,  Market Dynamics –Competition, policy effect  Broadband development and ubiquity  Network and service convergence  Infrastructure development –Existing operators upgrading their infrastructure –New entrants building new and competing infrastructure Target Group  Operators  Vendors  Policy & Regulation  Interest Groups

Center for Information and Communication Technologies Techno-Economics of Residential Broadband Page 3 Techno-Economics Techno-Economics within CICT  Participation in Research Projects –Construction of techno-economic models  Ph.D. project –Development of methodology  Theory / Methodology developed in European research projects  Financial evaluation of financial viability –Output NPV, IRR  Scenario Based –Sensitivity analysis –Comparison of technologies / scenarios  One of several available methods –Economic models, econometric models, Cost-Proxy Models, System Dynamics Models

Center for Information and Communication Technologies Techno-Economics of Residential Broadband Page 4 Implementation  Access Technologies: –ADSL –ADSL2+ –HFC Cable modem –FTTH –WiMax  Service Profiles: –S1: Slow Internet Browsing –S2: Fast Internet Browsing –S3: Multimedia –S4: Interactive Multimedia  Socio-economic zones: –Urban –Suburban –Rural  Infrastructure Scenarios: –Greenfield –Existing Infrastructure Upgrade –Model Design Implemented as Excel 2003 Spreadsheet Programming Code in Visual Basic for Applications (VBA) Graphical User Interface in VBA Model runs as macro in Excel

Center for Information and Communication Technologies Techno-Economics of Residential Broadband Page 5 Development  Techno-economic models are static  Combine dynamics from economic models  Incorporate effects of infrastructure competition  Effect of policy and regulation  Calculate cost of Universal Service

Center for Information and Communication Technologies Techno-Economics of Residential Broadband Page 6 Empirical Approach  Case Studies –Denmark –Iceland  Supported by –Europe –US –Asia  Research Goal –Investigate development and use of techno-economic models as a tool for understanding market trends and dynamics  Explain two major trends –FTTH projects by Electronic Utility Companies –Broadband scarcity in rural areas

Center for Information and Communication Technologies Techno-Economics of Residential Broadband Page 7 Questions ? For questions or comments Please feel free to contact

Center for Information and Communication Technologies Techno-Economics of Residential Broadband Page 8 Techno-Economic Project  ECOSYS –Techno-economics of integrated communication systems and services –Part of the Celtic Program –Period –  TONIC –TONIC is a project that concentrates on techno-economic evaluation of new communication networks and services –Part of the IST Program –Period –  TETRA –Support consolidation, condensing and rationalising of deployment guidelines for introduction of advanced communication services and networks –Part of the ACTS Program –Period –