Greek National Broadband Strategy: Some Initial Concerns

The national broadband investment plan recently announced by the minister of communications has brought optimism to the market and society:

• The project shall influx a substantial amount of money to the telecommunications industry (constructions, vendors etc).
• The introduction of an independent intermediate managing entity of the network can solve some of the employment issues of the anticipated downturn of the industry (layoffs, bankruptcies, mergers).
• For the citizens this project, when materialized will provide high quality access to the information society.
• For the ISPs it gives some excellent prospects to boost their market shares.

However, it brought also some skepticism sincethere is a series of practical issues that need to be carefully addressed for the project to come off. Here are some of my concerns:

1. Project’s execution period & financing: If all things go as planned the project will not start before the end of 2009. This means that the project will not have completed before 2017. So, EU FP7 funds will not suffice to finance the entire execution of the project and other source of finance will not only be required, rather become mandatory. Also, the lengthy period of the execution makes the project highly susceptible to many unaccounted risks (i.e. political and/or financial developments)
2. Investment Incentives: Attracting private money to invest in PPPs will be another tough issue since the (rightful) inclusion of smaller cities will take ROIs well into the future (20-30 years)
3. Industry’s capacity to perform: Very recently, “Call 93” (public infrastructure projects for 75 municipal metro fiber networks) issued 54M euros worth of construction work which eventually have had to be done within roughly 2 years. The industry found it extremely difficult to cope with this excess of work and many projects delayed partly due to industry’s limited capacity. Ministry’s project will issue 300M euros per year for 7 consecutive years, or 25M euros per month (almost 1M euros per working day). Assuming a cost of 80 euros/meter based on “Call 93” estimations (all included, i.e. collocation facilities, constructions, active & passive equipment), brings the requirements for ducts construction up to 12.5Km/day. Judging from the past, is this figure feasible?
4. Inclusion of smaller cities: The funding of (only) 50 smaller cities seem to me to deviate from the previous strategic choice to include 75 cities in Call 93. How will many of the MANs built under Call 93 develop when they are restricted from the national broadband care? Shouldn’t a set of actions be coordinated for these cities too?
5. Universal Service Obligation: When funding a national infrastructure with public (taxpayers) money universal service obligation have to be taken into account. Therefore, a longer-term plan for USO (coverage expansion and/or minimum service levels) must be negotiated with the soon to be formed PPPs

I’d most certainly welcome any comments and discussion on this. Join me or flame me freely!

Related posts:

1. Greek National Strategy for Fiber Access Networks
2. National Strategy for Electronic Communications industry in Greece – Open Consultation
3. The Greek FTTH Plan Cools-off for a Year
4. Update on Greek FTTH Endeavours – and yes, OTE is interested…
5. Announcement: Legislation Guidelines for the Greek FTTH Project

Tagged as: FTTH, Greek Telecoms, National Broadband Strategy