European superfast broadband rollout cost cheaper than thought
Editor | 22-05-2013

IPTV providers preparing to ramp up services across Europe have been given a boost by research finding that providing superfast broadband to the whole of the EU could be much less expensive than previously estimated.

According to “Europe’s broadband investment needs” from broadband specialist Point Topic, estimates that the cost could be as high as €270 billion are wide of the mark and could instead only be in the region of €80 billion. Nearly two-thirds of that total will be needed to service the lowest density areas.

The analyst suggests that several factors combine to make its estimate lower than previous ones: its approach takes full account of existing superfast networks, which already covered about 50% of European homes at the end of 2011. Most importantly it recognises that superfast broadband does not have to be provided by optical fibre-to-the-home (FTTH) technology but can also be delivered by cable TV networks using the DOCSIS 3 standard or over telephone lines using VDSL, the very high speed version of DSL, and much cheaper to provide than FTTH where a good telephone network is already in place. Point Topic chose to use VDSL as the benchmark for modelling the cost of superfast rollout in more densely populated areas. Some other estimates assume much wider use of FTTH.

“80 billion euros is still a lot of money,” said Tim Johnson, lead author of the report, “but we think our figure is more accurate than earlier ones. It’s more realistic and should be more acceptable.”

Johnson also believes that the €52 billion estimate in low density areas also assumes that superfast investment will be capped at an average of €2,000 per home. “Most of that amount will have to be funded by the taxpayer in one way or another,” says Johnson, “and we think that’s about as much as they will stand for. But we think that a large proportion of rural Europe will get wired up on that basis.”