An investment in the long term
Superfast network rollouts are moving forward, and operators are now having to decide the fate of their legacy copper networks. Networks that are increasingly costly to maintain, especially as operators are having to contend with customers’ growing demands for better network performance and quality of service, which are influenced by national superfast rollout schemes. Over the past several years, incumbent carriers in Europe and around the world have begun the process of dismantling these older networks. What issues are involved in switching off copper access, and what do pioneer initiatives reveal?
The copper switch-off process: a cross-cutting operation…
As FTTP and wireless superfast access networks become increasingly widespread, the question of dismantling legacy copper networks has arisen. These networks are very expensive to maintain and to operate, generating costs that are far from commensurate with their dwindling performance. There are four stages to the switch-off process: NGA network deployment, customer migration, shutting down the service and dismantling the components. Dismantling the copper network is therefore a process that touches every part of an operator’s business, as much technical and operational as financial. In addition to network issues, the customer migration process is a vital step, especially for B2B customers whose bespoke contracts need to be revisited. So the sheer scale of this undertaking involves an array of pressures.
The copper switch-off will have a both commercial and technical impact
Stages in a legacy copper network switch-off
… whose scale reveals both internal and external conflicts…
The migration and dismantling process also requires sizeable commercial resources and technical know-how to be mobilised over a lengthy period of time. Operators need to find the right trade-off between accelerating customer migration to cut down on spending, and avoiding rushing their customers which could drive them away. Plus outside obstacles, such as regulatory reticence and mandatory advance notice periods, can slow down the process. Regulatory authorities, meanwhile, need to strike a balance between the desire to accelerate the transition to fibre access and the need to ensure healthy competition before the copper switch-off, to avoid creating monopolies over superfast access. The transition thus needs to proceed at a measured pace, to reconcile these competing forces and to ensure the utmost payoff down the road.
Copper network switch-off a reality in a number of countries
Copper switch-off announcements (non exhaustive)
… but which will pay off in the long run for incumbent carriers
Shutting down legacy copper networks also requires substantial technical and operational resources, until the very last customer is migrated to the new system – making it a costly process, especially in the early stages. If not every customer has been migrated, the service cannot be fully switched off, which postpones the projects’ profitability outlook (around five to seven years from when the migration process begins). Once the transition is complete, however, operators begin to reap considerable benefits since switching off the copper system will generate massive savings at several levels: reducing operating expenses by up to 60%, thanks to the lower cost of network maintenance and a more streamlined product line. Added to which, upgrading customers to superfast access can mean higher ARPU and the ability to market bundled products (including content packages in particular).