Fibre-to-the-Home beats cable and telco competition
In Hillegom, a small town (7,431 homes) halfway between Amsterdam and The Hague, a 100% commercial FttH rollout began in March 2006 and will be completed in mid-October.
Investor, operator and service provider is Lijbrandt Telecom, recently acquired by Dutch billionaire Dik Wessels. He owns the investment firms Reggefiber and Reggeborgh and also the large construction company Volker Wessels Stevin. The latter has done, and continues to do, a lot of digging and construction for FttH projects like the one in Nuenen-Eindhoven.
Mr Wessels made a fortune when ISP World Online had its IPO. It is reported that he personally made a profit of around 800 million euros on that.
The project in Hillegom is known by the name of the CPE, the Kadaka (KAstje Dat Alles KAn, box that can do everything). So far they have passed 5,400 of the 7,431 homes, and of that 5,400 some 4,600 (or 85%) homes have subscribed to one or more services (TV, telephone, Internet). The uptake of TV is 3,950 homes (73%), a churn from local monopolist MSO Casema.
The uptake of the telephone service is 73% as well, a churn from Casema and local incumbent telco KPN. So in Hillegom Casema and KPN are left to battle it out for a potential market for their core products of 27%.
The Hillegom network is so successful that the company will start an FttH project in nearby Lisse in October (10,000 homes) and it has decided to roll out FttH in the whole ‘(Tulip) Bulb region’ (Bollenstreek in Dutch). That comprises 120,000 homes to be rolled out in the next 36 months in the very heart of the Randstad, the Netherland’s most populated area (Amsterdam, The Hague, Rotterdam, Utrecht and the territory between those cities).
Lijbrandt states that FttH connections cost them an investment per home of 1,200 euro, passive and active taken together. In the case of triple play, the ARPU per sub is about 550 euro per year.
Recently in the Netherlands cable MSOs Casema and Essent Kabelcom were both bought by Cinven and WarburgPincus at about 1,500 euro per subscriber. The take-up rate in Hillegom is similar to that of the FttH project in Nuenen.
There the fibre was rolled out with the help of a pilot broadband subsidy from the national government. After a year of free broadband people could decide whether or not to continue one or more services at a commercial rate. Some 7,200 homes (or 90%) subscribed to one or more services.
I am planning a broadband/ICT mission to the Netherlands in March 2007. I am waiting on confirmation from Minister Helen Coonan as to whether she will lead this mission. My intention is to include visits to Dutch FttH projects in the itinerary – the largest one being the one in Amsterdam, with 400,000 homes. For more info click here.
See also: The Netherlands
