Monthly Archives: October 2011

Colombia’s ICT Ministry announced that four firms have submitted bid proposals for the country’s National Fiber Optic Project. The Temporary Union Colombian Fiber Optic (which comprises the firms total play and TV Azteca), Telmex Colombia SA, Temporary Union Connectivity for All (Media Commerce Partners, ZTE Corp. Colombia branch, EXICOM INC, and ANDITEL SA) and Temporary Union Telefonica (Colombia Telecommunications SA and Telefonica Mobiles) will compete to win a place on the project, which will aim to expand Colombia’s fiber footprint to at least 400 new municipalities.

The ICT Ministry expects to award contracts for the project beginning November 4.

The Colombian Government plans to allocate $415,837 million COP (US $218 million) for the public-private partnership. The fiber-optic network expansion project aims to expand the number of broadband connections from the present 2.2 million to 8.8 million by 2014. Fiber-based broadband currently is available in 325 municipalities, according to the ministry.

The National Fiber Optic Project, managed by the Social Program Compartel of the ICT Ministry, is expected to take 30 months to complete, with an initial goal that at least 120 municipalities will receive new fiber-optic service by the end of next year.

Fitch Ratings is applying some reality to European Commission targets for fiber deployment, claiming the goal of 50% penetration of 100Mbps services by 2020 is simply unviable.

The ratings agency states fiber access will likely only be feasible for private firms setting up in densely populated areas, due to lower cost-per-user and predicted higher take-up of high-speed services in those areas. It notes several incumbent telcos are already spending €1 billion to €2 billion each to deploy fiber in heavy population centers to combat growing competition from cable operators, but claims the EC’s goals will require at least three times the investment.

Fitch estimates the total cost of deploying fiber to the home throughout France and Germany at €30 billion and €40 billion respectively. In addition, it believes the EU is being optimistic in expecting an injection of €6.4 billion of public cash to generate up to €100 billion of investment from the private sector, given current market conditions.

“It implies a leverage of over 15-times in a sector where there remain serious doubts about take-up rates and whether customers will pay substantially more for a faster broadband service,” a statement reveals.

Heaping more misery on European plans, Fitch notes that even if the €100 billion figure is achieved, it will still fall short of the total required investment.

The ratings agency also notes that consultations into cutting copper access prices, which were opened by Digital Agenda commissioner Neelie Kroes on Monday, fail to look at the bigger picture of increased pressure on telco’s top lines. The firm predicts operator’s revenues will fall in 2012 and then remain flat in 2013, and continued pressure on operating margins.