DARK FIBRE EUROPE II

SUMMARY

Re-visiting issues first identified in the BroadGroup report of 2005, this new report reaffirms the continued expansion of Dark Fibre in Europe, with steady growth averaging at 8% per annum, continuing through to 2012. The boom and bust approach to new network deployment has vanished, and has been replaced by an air of caution with speculative fibre build out being kept to a minimum and mainly focused on the access part of the network to the customer site.

The report does however identify a number of new drivers in the marketplace which is stimulating growth, ranging from sustained broadband demand and continued growth in cross-border peak Internet traffic to the emergence of community fibre, already a growth vector in North America. Muni-fibre appears to be taking hold in a number of European countries (now around 15% of the Dark Fibre provider market by type) and quite often these developments are financed by local government authorities. These projects are now being assessed by the European Commission whose aim is to make Dark Fibre as accessible as possible to all user groups. But it also refers to the increasing propensity of business users to "club" together and access Dark Fibre links.

Perhaps most strikingly, the report contends that evidence collected in research supports the view that Dark Fibre is becoming a service of choice for an increasingly large number of companies, and is emerging as a marketplace of opportunity, rather than its former image as an arcane and inaccessible part of the network. New players see it as a service to sell to enterprises and other operators, rather than a strategic asset to retain.

Incumbents have yet to resolve provision of access to Dark Fibre, and the regulatory theme posed by the evolution of muni-fibre, is being sustained as national regulatory authorities, particularly in the UK, France and Germany, increase their focus on accessibility.

Using case studies and trend analysis, the report reviews the status of Dark Fibre in 17 countries in western Europe, and identifies provider segmentation ranging from utility companies to cable TV providers. A summary of Dark Fibre activity by each player is provided.

Customers of Dark Fibre include an important group of academic networks, the NRENs (National Research and Education Networks). Although NREN's in Europe are the most identifiable common users of Dark Fibre (and one of the main international users) there are a number of new customer segments which are becoming active users of the service, also identified in the report. In targeting some of these segments, and capture market share, Dark Fibre providers are adopting new pricing strategies.

However it is the emergence of FTTH (the report cites 30 key developments across the region) which is most directly impacting Dark Fibre provider business models. One such example is the new need to develop fibre-to-the-kerb in tier 2 cities across Europe, and offering layered services, making it possible for other players to provide their own services.

The report also considers new trends in fibre technologies and factors impacting civil engineering costs in building out fibre networks. It also summarises the main trends in fibre deployment in Europe where less used routes are now favoured. The same approach applies to the deployment of submarine cable systems in Europe. Rather than lay new systems on the most saturated routes new cables are being laid on less developed routes.

Overall the report provides a comprehensive review of Dark Fibre markets and players in Europe, updates on developments in the past three years and looks forward to growth drivers through to 2012.

Key Benefits of the Report

• 17 Western European Markets
• Player profiles
• New Customer trends in Dark Fibre
• End User Survey
• Pricing trends in Dark Fibre and Cost Structure
• Key trends in Fibre technologies
• Future of Dark Fibre
• Growth Projections
• 14 Tables and Charts
• 100 pp

TABLE OF CONTENTS

List of Tables and Charts

Research Methodology

Acknowledgements

Executive Summary

CHAPTER ONE - A definition of Dark Fibre

• Introduction
• A definition of Dark Fibre
• What is Dark Fibre and why does it exist
• The ITU fibre specifications summarised
• Types of Dark Fibre provider
• The main Dark Fibre provider
• Key Point Summary

CHAPTER TWO - Background and current prospects for Dark Fibre

• Introduction
• The main European Dark Fibre providers in 2008
• Key changes in European Dark Fibre deployments over the last decade
• Outlook for Dark Fibre - new entrants and developments
• Changes in Dark Fibre technology
• The future for Dark Fibre
• Key Point Summary

CHAPTER THREE - Dark Fibre in Western Europe - Country review

• Introduction
• Dark Fibre provider segmentation
• Dark Fibre development drivers in Western Europe
• Western European Dark Fibre provider profiles
• Dark Fibre connectivity in Western Europe
• The main trends in the supply of Dark Fibre services
• The main in the demand of Dark Fibre services
• Dark Fibre customers
• The rise in community fibre deployments
• Key Point Summary

CHAPTER FOUR - Customer trends in Dark Fibre usage

• Introduction
• Identifying the main drivers for fibre deployments
• The main Dark Fibre customer trends
• BroadGroup Dark Fibre end user survey
• NREN usage of Dark Fibre services
• Key Point Summary

CHAPTER FIVE - New Technology trends in optical fibre

• Introduction
• The key changes in fibre optic technology taking place in context
• Technological advances in competing technology to optical fibre
• Limitations on optical fibre deployments
• Reducing the capex cost - the emergence of micro-duct technology
• Reducing the optical fibre cost - new technological challenges
• New fibre rollouts and new business models
• Submarine cable system deployment trends
• Metro fibre system deployment trends
• Key Point Summary

CHAPTER SIX - The changing cost and price structure for Dark Fibre

• Introduction
• Typical contract terms employed for Dark Fibre services
• Developments in the pricing structure of Dark Fibre
• Some recent examples of Dark Fibre pricing
• The business case for fibre deployments and cost structure developments
• Key Point Summary

CHAPTER SEVEN - Worldwide trends in optical fibre provision

• Introduction
• Worldwide deployment of optical fibre outside Europe
• Fibre deployment in Asia and Dark Fibre services
• Fibre deployment in North America and Dark Fibre services
• Key Point Summary

CHAPTER EIGHT - Conclusions - Dark Fibre services in Europe

• Introduction
• Key Point Summary - The main trends identified from this research

APPENDIX ONE - A list of Dark Fibre providers in Europe

APPENDIX TWO - A glossary of terms used in the report

List of Tables and Charts

CHARTS:

• Chart 1. Elements of the technology stack including Dark Fibre. Source: Alcatel-Lucent
• Chart 2. Types of optical fibre systems with characteristics. Source: BroadGroup
• Chart 3. Estimated Dark Fibre forecast - from 2008 to 2012 Source: BroadGroup
• Chart 4. Dark Fibre Provider Segmentation by Type Source: BroadGroup
• Chart 5. Dark Fibre customer breakdown (based on sample of 50 Dark Fibre customers) Source: BroadGroup
• Chart 6. Dante Wavelength and Dark Fibre routes in Europe Source: Dante

TABLES:

• Table 1. Summary of the ITU definitions of Single Mode optical fibre Source: ITU
• Table 2. The Largest Dark Fibre providers - measured by network length in km. Source: BroadGroup
• Table 3. Estimated Dark Fibre forecast - from 2008 to 2012 Source: BroadGroup
• Table 4. Key Dark Fibre Providers in Western Europe Source: BroadGroup
• Table 5. Next Generation Network (NGN) deployments in Europe Source: BroadGroup
• Table 6. Key Fibre to the Home (FTTH) deployments in Europe Source: BroadGroup
• Table 7. New fibre deployments announced during 2007-2008 Source: BroadGroup
• Table 8. New European submarine cable systems planned and under development Source: BroadGroup

• Case Study 1. Sohonet's use of Dark Fibre services
• Case Study 2. The Sanet academic and research network in Slovakia