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Gigabit communities face several challenges to developing successful business models, but a number of factors are driving increased interest in deploying gigabit fibre infrastructure.

A ‘gigabit community’ can be defined as the roll-out of FTTH infrastructure that can provide broadband subscribers with access to gigabit speeds. A number of innovative gigabit community business models have been developed to stimulate demand and reduce the costs of fibre roll-out. This report analyses the key aspects of gigabit community roll-outs and the lessons that can be learned from existing deployments.

This report provides:
the background to the growing interest in deploying gigabit communities and gigabit speeds
an examination of the different business models for gigabit roll-outs
analysis of measures to stimulate demand and reduce costs for gigabit roll-outs
an assessment of the value proposition for customers of 1Gbps speeds
key recommendations and implications
Analysys Mason’s model of the business case for a new FTTH wholesale service
case studies on four gigabit deployments:
CityFibre in the UK: a phased fibre deployment model in Tier 2 UK cities
EPB Fiber Optics in Chattanooga, USA: a public-owned electric utility roll-out
Gig.U: a consortium of US research universities aiming for fibre roll-out in surrounding communities
Gigatown in New Zealand: a contest run by Chorus to develop the first gigabit community in the southern hemisphere.

COMPANY COVERAGE
The following companies and projects are mentioned in this report.
AT&T
BSkyB
CenturyLink
Chorus
CityFibre
EPB Fiber Optics
Gig.U
Gigabit Squared
Google Fiber
Israel Electric
North Carolina Next Generation Network
TalkTalk

Table Of Contents

The Gigabit communities: an assessment of market developments

Table of contents


andnbsp;


About this report


Executive summary


Recommendations and implications


Commercial competition and speeds offered by cable in particular are the main drivers of gigabit community roll-outs


A variety of business models and technologies have been used for gigabit community roll-outs


Operators have focused on several ways to reduce the cost of gigabit deployments, such as demand aggregation and ‘dig once' policies


Demand aggregation minimises risks and is a key feature of many gigabit community roll-outs


A service-based use case for gigabit access is not plausible in the next decade, but gigabit access is still relevant


New Zealand will soon be home to the southern hemisphere's first gigabit community, thanks to Chorus's Gigatown competition


The Gigatown contest reflects desires for community engagement common among many gigabit community projects


CityFibre is focusing on building fibre infrastructure in Tier 2 UK cities


CityFibre is adopting a staged approach to its gigabit roll-outs


EPB Fiber Optics' FTTH roll-out in Chattanooga demonstrates that public utilities can develop gigabit communities


EPB's presence as an electricity company gives it several advantages in its business case for FTTH roll-out


EPB has enjoyed strong take-up on its FTTH network, but demand for 1Gbps speeds is limited


Gig.U believes that university communities are the most promising targets for gigabit network deployments, but results have been mixed


Analysys Mason has modelled the business case for a new FTTH wholesale service with mid-range wholesale tariffs


The wholesale-based operator would have a ROI timeframe of well over 10andnbsp;years


About the author and Analysys Mason


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List of figures


Figure 1: Summary of report coverage


Figure 2: Business model and technology for selected gigabit community deployments


Figure 3: Cost reduction factors for gigabit deployments


Figure 4: Demand aggregation thresholds for selected FTTH operators


Figure 5: Peak-hour bandwidth requirements for a top-1% user by application, worldwide, 2012-2020


Figure 6: Chorus's wholesale FTTH prices by download/upload speed, Newandnbsp;Zealand, June 2014


Figure 7: Chorus's FTTH subscribers and penetration rate, New Zealand, 2Qandnbsp;2013-1Qandnbsp;2014


Figure 8: CityFibre's business model for rolling out fibre infrastructure in the UK


Figure 9: CityFibre's network roll-out plan and business model


Figure 10: EPB Fiber Optics' FTTH service prices by access speed and bundle, Chattanooga, USA, June 2014


Figure 11: Business case advantages for EPB Fiber Optics in Chattanooga, USA


Figure 12: EPB Fibre Optics' FTTH broadband subscribers and penetration rate, Chattanooga, USA, 2011-2013


Figure 13: Examples of Gig.U initiatives


Figure 14: Assumptions used for Analysys Mason's model of the business case for a new FTTH wholesale service


Figure 15: Discounted annual cashflow and net present value for a hypothetical wholesale-based operator FTTH roll-out, 2014-2030


andnbsp;


Company coverage


The following companies and projects are mentioned in this report.


CityFibre


TalkTalk


BSkyB


Chorus


Israel Electric


EPB Fiber Optics


Gig.U


Google Fiber


Gigabit Squared


ATandamp;T


CenturyLink


North Carolina Next Generation Network

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