Fiber Access changes gears

2014-07-01 11.59.27

The speakers at Almegas Fiber-to-the-Home panel debate at Almedalen Week on July 1st

You may not have noticed, but broadband internet access in Sweden has reached “critical mass”. At some point, during the last year or so, this feature in homes went from a luxury item for a selected few, to a sanitary requirement.  Visiting this years “political circus” at Almedalen, made this phenomenon very clear.  For Swedish politicians is it no longer “if” but how soon and can all 100% of households in Sweden, also in very remote areas enjoy this “basic” standard of living ?  The interesting thing is that, the increase in installations has now gone beyond political visions and subsidies vs market forces – it is now basically demand driven.  The average house-owner is now prepared to pay 20-25KSEK (2500-3000 Euro) for the installation of a 100Mbps fiber connection to his home.  The key change of mind is that previously  this cost was compared with luxury consumption items like new TV-sets or a holiday trip –  now this cost is seen as a necessary investment in your property similar to electricity, water and sewage installations (which are much more expensive). The latter are investments that will have a significant positive effect on the property value (or in fact, the lack of which, will negatively affect the value).

Screenshot 2014-07-06 21.39.08

From EY:s report for Almega, IT&Telekomföretagen etc

An interesting report by Ernest&Young (EY) estimates the cost of the FTTH-investments in Sweden.  The ballpark figures show that about 60 BSEK has been invested already to reach the current 56% of households and companies.  Another 40 BSEK  are needed to reach the government target of 90% (in 2020), and finally another 15-20 BSEK to reach “allmost everyone” (i.e. the last 10%).  Looking at the cost per household (there are 4,5M of them) this means that we have spent about 25 KSEK/ household so far, we will spend about the same amount, give or take a few 1000,  per household to reach the 90%. The last households will cost 35-40KSEK to connect.  Expensive for luxury consumption, but hardly out of reach seen as an investment in a multimillion-kronor house..

About Jens Zander

Professor Jens Zander is professor in Radio Communication Systems at the Royal Institute of Technology, Stockholm, Sweden. He has been among the few in Swedens Ny Teknik magazine's annual list of influential people in ICT that have been given the epithet “Mobile Guru”. He is one of the leading researchers in mobile communication and is the Scientific director of the industry/academia collaboration center Wireless@KTH. His research group focuses on three main areas – the efficient and scalable use of the radio frequency spectrum, economic aspects of mobile systems and application and energy efficiency in future wireless infrastructures.
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