DARK FIBRE IN CENTRAL, EASTERN AND SOUTH EASTERN EUROPE

SUMMARY

This first assessment of Dark Fibre in regional emerging markets (26 country markets are included) reveals encouraging signs of growth in deployment. Demand drivers are present, new optical hardware and software is available although apparently at a higher price than in western markets, and even duct space is present, owned largely by railways and utilities. Yet to ensure that Dark Fibre enables sustained economic progress, and is adopted by enterprises, regulatory action is crucial. So far, it seems only the academic community is lobbying for changes in state policy that will open many of these markets to infrastructure competition, but lack financial firepower. Liberalisation has frequently been delayed in South Eastern Europe. Even where utilities have constructed fibre networks, sales to third parties remains under-exploited and the opportunity diminished.

Against this background of mixed market environments, Dark Fibre is niche, but nevertheless assuming a more important role. Research for the report suggests that in some instances, Dark Fibre is more prevalently perceived as a tactical deployment, as investment focuses on network upgrades to engage in future triple or quad plays. WiMAX, rather than Dark Fibre, is also recognised as a cheaper way to bypass the local loop. NRENs are driving demand for Dark Fibre across the entire region compared to enterprises.

Yet much is forecast to change, and future opportunity for Dark Fibre will emerge as more strategic. In the first instance, there is a clear need to elevate Dark Fibre from its perception as a raw unmanaged capacity to a quality longer term investment, that delivers a range of standard and premium managed services. Additionally, as the increasingly critical mobile segments approach mass maturity, the demand for Dark Fibre will amplify. Alternative operators represent a wholesale opportunity and Enterprises will become a key target segment for services.

The report casts a wide net across 26 markets, where Dark Fibre products still appear to be limited. However this could be a function of market supply and result from the drive towards optical networking evidenced in western Europe. Country markets themselves are changing: Russia is seen to change significantly in terms of its Dark Fibre infrastructure by 2010. Competition in a number of countries (particularly in South Eastern Europe) has been slow to emerge, but there is reason to believe that new forms of telecoms infrastructure will appear over the next twelve months in a number of countries in the region.

Much depends on the regulator, and changes in competition law, stimulated in part as countries who are accession states begin to change legal frameworks. In less developed markets, demand is led by NRENs ("leap-frogging" their western counterparts by adopting optical networks with optical POPs) now, but will extend to enterprises. A wider customer base and the availability of wholesale services will support this evolution. The report did not find that FTTH (fibre to the home) and FTTP (fibre to the premise) deployments were among the key drivers of growth and they remain less popular than in western Europe with the exception of Russia, Poland and Greece. New Dark Fibre routes are also emerging such as Turkey, and also cross-border Dark Fibre within the central and eastern region.

TABLE OF CONTENTS

List of tables and charts

Acknowledgements

Research Methodology and Objectives

Executive Summary

CHAPTER ONE - A definition of Dark Fibre and the importance of Dark Fibre in Emerging Markets

• Introduction
• A definition of Dark Fibre
• What is Dark Fibre and why does it exist?
• The ITU fibre specification summary
• The importance of Dark Fibre in Emerging Markets
• Types of Dark Fibre providers in Emerging Markets
• Key Point Summary

CHAPTER TWO - Background and current prospects for Dark Fibre in the Emerging Markets

• Introduction
• The main Emerging Markets Dark Fibre providers in 2008
• Key changes in the Emerging Markets Dark Fibre sector to date
• The outlook for Dark Fibre - New Entrants and New Developments
• Key changes in Dark Fibre technology
• The future for Dark Fibre in the Emerging Markets
• Key Point Summary

CHAPTER THREE- The main optical-fibre deployments in the Emerging Markets

• Introduction
• Section 1: Armenia, Albania, Azerbaijan, Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia & Slovenia
• Section 2: Telecoms providers with networks across the Emerging Markets
• Section 3: Russia, Belarus, Georgia & the Ukraine
• Section 4: The Baltic States - Latvia, Lithuania & Estonia
• Section 5: South Eastern Europe - Croatia, Bosnia-Herzegovna, Macedonia, Maldova, Montenegro, Greece & Turkey
• Section 6: Western telecoms providers with a presence in the Emerging Markets region
• Key Point Summary

CHAPTER FOUR - Emerging Markets country survey with case studies

• Introduction
• Dark Fibre usage by the NREN's in the Emerging Markets
• Key fibre or infrastructure projects in the Emerging Markets region
• Key Point Summary

CHAPTER FIVE - The major trends in Dark Fibre provision in the Emerging Markets

• Introduction
• New optical-fibre deployments
• New NGN investment in the Emerging Markets region
• Alternatives to optical-fibre deployments
• Wi-Fi deployments
• WiMAX deployments
• Bonded copper deployments
• Satellite deployments
• A brief guide to Dark Fibre Emerging Markets deployments
• Key Point Summary

CHAPTER SIX - Emerging Market Dark Fibre Survey Conclusions

• Introduction
• New optical-fibre routes in the region
• Conclusions

APPENDIX ONE - A Glossary of terms

APPENDIX TWO - A list of Emerging Markets Dark Fibre providers

List of Tables and Charts

CHARTS:

• Chart 1. The different elements of the technology stack including Dark Fibre
• Chart 2. Types of optical fibre systems with characteristics
• Chart 3. Estimated Emerging Markets Dark Fibre forecast - from 2008 to 2012

TABLES:

• Table 1. Summary of the ITU definitions of Single Mode optical fibre
• Table 2. Key Emerging Markets Dark Fibre providers - measured by network length in kilometres (KM)
• Table 3. Estimated Emerging Markets Dark Fibre forecast - from 2008 to 2012
• Table 4. Key Dark Fibre Providers in Eastern Europe
• Table 5. Anticipated NREN Dark Fibre development
• Table 6. Existing usage of Dark Fibre by Emerging Market NRENs
• Table 7. Key Fibre Projects in the Eastern European region
• Table 8. Survey of NREN Dark Fibre availability - The Baltic States and Eastern Europe
• Table 9. Emerging Market Dark Fibre usage by the NREN community
• Table 10. Key WiMAX deployments in Emerging Markets (Europe)
• Table 11. Emerging Market cross border Dark Fibre routes in place and proposed (2007-08)

• Map 1. HTCC fibre network in Central Europe
• Map 2. 4cE network in Central Europe
• Map 3. MTCAG Network Coverage in Europe (excluding HTCC routes)