Key Findings in Donegal
Jukka-Pekka Joensuu
February 12, 2013
Background and ways of building HSB in rural areas
1. Traditional telco building the network on market basis
1. This can be achieved in areas with Rate of Return above 15 % or there is a strong market
incentive to build a next generation networks. This is achieved with vast financial resources
provided by traditional telco and with minimum public intervention. Not likely to happen in
rural areas without significant political pressure..
2. There is a Newco (new company) set up initiated by the local community and structured as
cooperative and local municipality or region providing financial support by means of guarantees,
loans or other financial support
3. There is a Newco set up started and initiated by the municipality or municipalities. This can be
seen as a regional development fund to initiate ICT investments in local areas
4. There is a public –private partnership model which can be a combination with models 1+3 or 2+3
or 1+2
5. For a pure network company the aim for rate of return is between 5-8 %
1. The incentive of building such network by means of non profit corporation is the idea of
boosting development and innovations with building HSB and the profits come via
employment and development in the region
8. kesäkuuta 2012
PwC
Four critical factors in successful rural broadband roll-out
1.
Make a viable investment plan
1.
HSB business model is a investment-driven business model with vast sunk costs. This makes
investment planning crucial part of business plans and the roll out has to be planned in controlled
manner
2.
Regional planning of broandband investments has to be user driven and also network topology
planning has to follow different users, such as households, masts for the mobile operators,
community buildings and corporate areas
2.
Pricing of connection fees
1.
Pricing of set up fees and monthly recurring charges is basis for investment payback times, interest
rates, penetration rates and risk allocation with the previous factors
2.
Penetration schemes related with pricing are crucial
3.
Business-like planning
1.
Revenue allocations and cost structure together with streamlined organisational structure for basis
for profitable investment schemes and help in preparing for viable business plan and investment
structure
2.
Even for the municipalities run networks in a non-profit organisations business planning is a key
factor
4.
Strategic view on tomorrow´s society and digital needs justify the necessary investments
1.
PwC
1.
There are direct implications to the overall competitiveness in rural areas and strategic thinking in
relation to the decision-making process; in tomorrows society HSB is a key strategic choice and
regional development factor
8. kesäkuuta 2012
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