Costing the new potential connectivity needs : final report.
Date: 2016-09-06
Institutions: Directorate-General for Communications Networks, Content and Technology
Subjects: EU Member State, EU programme, Internet, agricultural machinery, computer network, cost analysis, economic consequence, information society, information technology, report, social impact, technological change, virtual community

Costing the new 
potential connectivity 
needs 

FINAL REPORT  
A study prepared for the European Commission 
DG Communications Networks, Content & Technology 

Digital 
Single 
Market 

 
 
 
 
This study was carried out for the European Commission by 

Analysys Mason Limited 
Bush House, North West Wing 
Aldwych, London 
London, WC2B 4PJ, UK 
london@analysysmason.com 
www.analysysmason.com 
Tel: +44 (0)845 600 5244 
Fax: +44 (0)20 7395 9001 
Registered in England No. 5177472 

Internal identifications 
Contract number: 30-CE-0755665/00-81 
SMART 2015/0068 

DISCLAIMER 

By the European Commission, Directorate-General of Communications Networks, Content & Technology. 

The information and views set out in this publication are those of the author(s) and do not necessarily reflect the 

official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this 

study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the 

use which may be made of the information contained therein.  

ISBN 978-92-79-60897-1 

doi:10.2759/213341 

Reproduction is authorised provided the source is acknowledged. 

© European Union, 2016. All rights reserved. Certain parts are licensed under conditions to the EU 

  
 
 
 
 
 
 
 
 
Contents 

0 

1 

Abstract 

Executive summary 

Addressing the study’s objectives 

2 
2.1  Objectives of the study 
2.2  Our approach to addressing the objectives 

3 
3.1 
3.2 
3.3 
3.4 

Technology review and modelling assumptions 
Fibre to the premises (FTTP) 
Cable 
Fibre to the node (FTTN) 
Future wireless broadband technologies 

Modelling approach and other assumptions 

4 
4.1  Modelling approach 
4.2  Modelling assumptions common to all technologies 

5 
5.1 
5.2 

Results, validation and sensitivity analysis 
Cost results for the infrastructure scenarios 
Sensitivity analysis 

6 

Implications of the results and recommendations 

1 

3 

28 
28 
29 

35 
36 
39 
41 
43 

51 
51 
52 

59 
59 
68 

80 

2006427-302 

.  

  
 
 
 
 
 
Costing the new potential connectivity needs 

Confidentiality  Notice:  This  document  and  the  information  contained  herein  are  strictly 
private and confidential, and are solely for the use of DG CNECT.  

Copyright  ©  2016.  The  information  contained  herein  is  the  property  of  Analysys  Mason 
Limited  and  is  provided  on  condition  that  it  will  not  be  reproduced,  copied,  lent  or 
disclosed, directly or indirectly, nor used for any purpose other than that for which it was 
specifically furnished. 

Analysys Mason Limited 
Exchange Quay 
Manchester M5 3EF 
UK 
Tel: +44 (0)161 877 7808 
manchester@analysysmason.com 
www.analysysmason.com 
Registered in England No. 5177472 

2006427-302 

.  

 
 
 
 
0  Abstract 

Costing the new potential connectivity needs  |  1 

This study considers the cost of providing future connectivity across all EU28 member states. The 
study  estimates  the  cost  of  delivering  three  future  connectivity  aims:  providing  1Gbit/s 
connections  to  Socio-Economic  Drivers  and  Professionals  (SEDPs);  providing  future  mobile 
connectivity; and providing 1Gbit/s connections to all residential areas. In addition to a review of 
the technologies suitable for supporting such aims, the study estimates the deployment cost of six 
discrete infrastructure scenarios that combine deployments of fibre and wireless infrastructure. The 
results  of  the  scenarios  are  presented  on  a  standalone  and  incremental  basis,  and  the  extent  to 
which  costs  can  be  met  by  the  commercial  sector  is  also  considered.  The  study  found  that 
economies  of  scale  are  crucial  for  deploying  1Gbit/s  capable  fibre  connections.  There  are 
significant synergies between scenarios to connect different types of subscriber with fibre. Also, 
the  number  of  users  at  each  connection  must  be  carefully  considered.  For  example, the  cost  per 
connection of connecting only large businesses, schools and local authority buildings may be high, 
but the cost per user would be much lower (as each connection serves multiple users). Regarding 
future mobility, anticipated developments in mobile technology should ensure that average speeds 
of 50Mbit/s can be achieved. However, significant additional costs would need to be incurred to 
either a)  extend  mobile coverage  to  all  major transport links,  and/or  b) deploy  very  dense  small 
cells to realise mobile speeds of 1Gbit/s or more, across a wide area. 

2006427-302 

.  

 
 
Costing the new potential connectivity needs  | 2 

[French version of abstract] 

Cette  étude  s’attache  à  estimer  le  coût  des  futurs  besoins  en  connectivité  dans  les  28  Etats 
membres  de  l’Union  européenne,  en  considérant  trois  objectifs  principaux :  i) connexions  à 
1 Gbit/s pour les Développeurs Socio-Economiques et les Professionnels (DSEP), ii) connectivité 
mobile du futur, et iii) connexions à 1 Gbit/s pour toutes les zones résidentielles. Outre l’examen 
des  technologies  appropriées  pour  la  mise  en  œuvre  de  ces  objectifs, l'étude  évalue  les  coûts  de 
déploiement selon six scénarios associant le déploiement d’infrastructures en fibre optique et sans 
fil.  Les  résultats  de  ces  scénarios  sont  présentés  de  façon  indépendante  et  incrémentale,  et  la 
mesure dans laquelle les coûts peuvent être pris en charge par le secteur commercial est également 
prise en compte. L'étude révèle que les économies d'échelle sont cruciales pour le déploiement de 
connexions  en  fibre  optique  capables  de  fournir  des  débits  de  1 Gbit/s.  Il  existe  des  synergies 
importantes  entre  les  scénarios  pour  connecter  différents  types  d'abonnés  à  la  fibre.  Il  est 
également  important  d’examiner  avec  soin  le  nombre  d'utilisateurs  au  niveau  de  chaque 
connexion.  A  titre  d’exemple,  connecter  uniquement  de  grandes  entreprises,  des  écoles  ou  des 
collectivités locales peut générer un coût par connexion élevé, mais le coût par utilisateur est quant 
à lui beaucoup plus faible (car chaque connexion est utilisée par plusieurs utilisateurs). Concernant 
la  connectivité  mobile  du  futur,  les  évolutions  prévues  en  termes  de  technologie  devraient 
permettre  d’atteindre  des  débits  moyens  de  50 Mbit/s.  Cependant,  l’extension  de  la  couverture 
mobile  à  tous  les  principaux  réseaux  de  transport  et/ou  le  déploiement  de  petites  cellules  très 
denses pour atteindre des débits mobiles de 1 Gbit/s ou plus sur une zone étendue engendreraient 
des coûts supplémentaires conséquents. 

2006427-302 

.  

 
Costing the new potential connectivity needs  | 3 

1  Executive summary 

1.1  Aims of the study 

Analysys Mason has been tasked by the European Commission to undertake the following study: 
‘Costing  the  New  Potential  Connectivity  Needs’  SMART  2015/0068  Negotiated  Procedure  5 
Candidates (Article 137.1 RAP)’ 

The Commission published the Digital Agenda for Europe (DAE) in 2010, a vision with ambitious 
broadband  targets  to  be  met  by  2020.  It  is  now  considering  new  connectivity  ambitions  beyond 
2020  and  is  seeking  a  sound  estimate  of  how  much  investment  is  required  to  meet  hypothetical 
future needs. The study is a follow-on to the network costing work which Analysys Mason carried 
out in its 2013 study for the EC, Study on the socio-economic impact of bandwidth.1 

The study analyses three main cases, which were agreed with the EC, to explore a wide range of 
different infrastructure roll-out scenarios:  

  Case  1  –  Providing  Gigabit  connectivity  for  socioeconomic  drivers  and  professionals 

(SEDPs)2 

  Case 2 – Mobile connectivity, providing widespread service availability of 50Mbit/s to 95% of 

the population and also to important highways and railways 

  Case 3 – Gigabit connectivity for all households in the EU28 using fixed wireline technology 

across three coverage levels: 80%, 90% and 100% coverage.  

In all cases the targets should be achieved by 2025. 

1.2  Overview of the approach taken 

To examine the three cases outlined above, and explore a wide range of issues within the scope of 
the  study,  we  have  defined  six  scenarios  for  the  deployment  of  broadband  infrastructure  within 
Europe.  These  scenarios  are  incremental  to  one  another,  with  each  scenario  adding  additional 
connectivity to the previous scenario (at an additional cost). 

Scenario A: Large 
SEDPs 

Our  first  scenario  considers  1Gbit/s  wireline  connections  to  large  SEDPs. 
Our  analysis  shows  that  large  SEDPs  are  quite  evenly  distributed  across 
population  areas  (as  opposed  to  being  concentrated  in  high  density  areas) 
and  therefore  fibre  will  be  required  across  much  of  the  access  network  to 
reach them. We assume that all large SEDPs would take services (i.e. large 
SEDP take-up would be 100%).  

Scenario B: 

Our  second  scenario  considers  wireless  connections  from  a  macro-cell 

1

2

Study available at: https://ec.europa.eu/digital-single-market/en/news/study-socio-economic-impact-bandwidth-
smart-20100033 

Large SEDPs include universities, schools, research centres, business parks, innovation hubs, hospitals, libraries, 
and SMEs employing at least 50 workers, and are to be connected with fixed wireline infrastructure. Small SEDPs 
include other SMEs and professionals/freelancers/teleworkers, are to be connected either with a fixed wireline or 
wireless connection. 

2006427-302 

.  

                                                      
  
  
Costing the new potential connectivity needs  | 4 

Macro-cell 
connectivity for 
population areas 

network serving all significant population areas. The scenario considers both 
the cost of the wireless cell infrastructure and the fibre wireline connection 
back  to  the  core  network  (assumed  to  be  a  connection  back  to  a  local 
exchange). Costs are presented for 95% population coverage. 

Scenario C: Small-
cell connectivity 
for population 
areas 

Our  third  scenario  considers  a  wireless  connection  from  a  small-cell 
network  serving  population  areas.  This  scenario  would  deploy  small  cells 
‘very deep’ into the network, resulting in a very high density of small cells 
(in reality the coverage of such a network may be lower than the results of 
the modelling, but we are aiming to test the cost impact of such a network). 

This  scenario  covers  the  case  where  small  SEDPs  are  connected  via  a 
‘wireless  hotspot’. It also covers the deployment of very high capacity  5G 
services  using  high  frequency  mm-wave  spectrum.  We  assume  that  some 
cells would be connected via fibre backhaul (with the remaining connected 
by  wireless  ‘fronthaul’).  Any  fibre  deployed  in  (for  example)  Scenario  A 
could be re-used for this fibre connection.  

Costs are presented for 95% coverage, similar to the macro-cell case. 

Our  fourth  scenario  considers  1Gbit/s  wireline  connections  for  small 
SEDPs.  This  scenario  is  effectively  a  development  of  Scenario  A.  Again, 
our  analysis  assumes  that  the  SEDPs  are  evenly  spread  across  population 
areas,  but  there  are  far  more  end  users  in  Scenario  D  than  there  are  in 
Scenario  A.  Compared  to  Scenario  D  even  more  of  the  access  network 
needs to be connected to reach all the end users, though fibre deployed for 
previous  scenarios  (e.g.  Scenarios  A  and  C)  could  be  re-used.  We  assume 
that all small SEDPs would take services (100% take-up). 

Our fifth scenario considers the provision of 1Gbit/s wireline connectivity to 
residential premises. We assume that residential areas are fully covered by 
wireline infrastructure, though the ‘final drop’ (the connection between the 
secondary connection point and the end user) is only made when a customer 
takes service. The weighted average take-up across the EU28 is forecast to 
be  81%  by  2025.  We  model  the  cost  of  providing  this  coverage  to  80%, 
90%  and  100%  of  population  areas.  Similar  to  other  scenarios,  fibre 
deployed for previous scenarios (e.g. Scenarios A, C and D) can be re-used. 

Our sixth and final scenario considers the provision of wireless connectivity 
to  serve  transport  links.  We  make  assumptions  to  account  for  the  existing 
coverage  of  transport  links,  either  because  they  are  in  population  areas  or 
due  to  dedicated  transport-related  roll-outs.  We  then  cost  the  additional 
network required to cover all the transport links not currently covered. 

Scenario D: Small 
SEDPs 

Scenario E: Home 
fibre connectivity 

Scenario F: 
Transport 
connectivity 

2006427-302 

.  

Costing the new potential connectivity needs  | 5 

1.3  Results for each of the scenarios 

It  should  be  noted that the  results  below  represent  our  best  estimate  of  the  costs  based  on 
reasonable  assumptions.  Our  sensitivity  analyses  (see  section  5.2)  show  that  each  of  the 
results  could  be  subject  to  significant  variation.  If  the  effects  considered  in  the  sensitivity 
analyses can be realised (either separately or in combination), then there is potential for the 
total cost to be lower than shown here. 

Figure  1.1  shows  the  standalone  deployment  cost  for  each  scenario,  i.e.  the  cost  if  each 
infrastructure  scenario  was  built  separately  from  the  others  (with  no  sharing  of  cost  between 
scenarios).  

Figure 1.1: Summary of standalone costs, by scenario [Source: Analysys Mason, 2016] 

A summary of the assumptions that drive the standalone cost of each scenario are shown in Figure 
1.2. 

Figure 1.2: Summary of the assumptions that drive the standalone costs [Source: Analysys Mason, 2016] 

Scenario 

Basis of connections 

Basis of coverage 

Infrastructure re-used 

Scenario A: Large 
SEDPs 

Scenario B: Macro-cell 
connectivity for 
population areas 

100% of large SEDPs 
are connected to a 
1Gbit/s network 

Some SEDPs are 
connected via a leased 
line or a cable network, 
rather than the 
modelled FTTP 
network 

Mobile broadband 
users (including smart 
phone and larger 
screen users) are 

Access network fibre 
laid only to connect 
large SEDPs, resulting 
in partial coverage of 
the access network 

Existing duct 
infrastructure can be 
re-used 

c.95% coverage of 
each member state 
determined from 
coverage (cell radius) 
and capacity of each 

Existing passive site 
infrastructure can be 
re-used 

2006427-302 

.  

64 11 81 197 249 40 44 38 64 050100150200250300A, LargeSEDPsB, MacromobileC, Small cellmobileD, SmallSEDPsE, ResidentialcoverageF, TransportlinksTotal investment cost (EUR billion)Fibre infrastructureWireless infrastructure 
Scenario 

Basis of connections 

Basis of coverage 

Infrastructure re-used 

Costing the new potential connectivity needs  | 6 

Scenario C: Small-cell 
connectivity for 
population areas 

connected 

macro cell 

Small cell capacity 
assumed to be 
sufficient that all 
connection types can 
be supported 

c.95% coverage of 
each member state 
based on cell radius 
only 

Existing duct 
infrastructure can be 
re-used for fibre 
backhaul; cells can be 
mounted on existing 
infrastructure (e.g. 
telegraph poles, 
buildings) 

Existing duct 
infrastructure can be 
re-used 

Existing duct 
infrastructure can be 
re-used 

Access network fibre 
laid only to connect 
small SEDPs (though 
this requires most of 
the access network to 
be laid with fibre) 

Full coverage of the 
access network up to 
the final node before 
the home in each area 
that is covered (we 
model 80%, 90% and 
100% of areas being 
covered). The final 
connection to the home 
is made when a 
customer takes service. 

Scenario D: Small 
SEDPs 

Scenario E: Home fibre 
connectivity 

Scenario F: Transport 
connectivity 

100% of small SEDPs 
are connected to a 
1Gbit/s network 

Some SEDPs are 
connected via a cable 
network, rather than the 
modelled FTTP 
network  

On average 81% of 
households take 
broadband and 100% 
of these connect via a 
1Gbit/s network by 
2025.  

Note: some users will 
connect via a cable 
network 

Note: this scenario 
does not include the 
cost of final 
connections to SEDPs 
(e.g. businesses) 

Macro cell capacity 
assumed to be 
sufficient that all 
connection types from 
transport links can be 
supported 

The modelling 
considers the coverage 
of transport links not 
currently covered  

Existing duct 
infrastructure 
(alongside transport 
links) can be re-used 

In Figure 1.3 we show the incremental costs of deploying the scenarios in the order A to F; this 
shows the effect of infrastructure that can be re-used (shared) between the scenarios. Although not 
shown on the chart, Scenario C can re-use EUR29 billion in fibre infrastructure from previously 
deployed  scenarios,  Scenario  D  can  re-use  EUR80  billion,  and  Scenario  E  can  re-use  EUR177 
billion. There is no re-use between the wireless infrastructures.  

2006427-302 

.  

 
Figure 1.3: Summary of incremental costs between scenarios [Source: Analysys Mason, 2016] 

Costing the new potential connectivity needs  | 7 

In the charts below we have shown the incremental costs for the infrastructure scenarios that will 
support the three key objectives currently held by the European Commission: connecting SEDPs, 
supporting mobility, and providing connections in rural areas. The incremental costs for the three 
scenarios  that  will  connect  SEDPs  are  shown  in  Figure  1.4.  It  should  be  noted  that  if  fibre 
connections  to  small  SEDPs  are  deployed  instead  of  the  wireless  hotspots  (as  opposed  to  in 
addition to wireless hotspots), then the wireless-related cost from scenario C could be avoided. 

Figure 1.4: Summary of incremental costs between scenarios supporting connections to SEDPs [Source: 

Analysys Mason, 2016] 

2006427-302 

.  

64 11 52 117 72 40 44 38 64 64 120 210 327 399 502 0100200300400500600A, LargeSEDPsB, MacromobileC, Small cellmobileD, SmallSEDPsE, ResidentialcoverageF, TransportlinksTotal investment cost (EUR billion)Additional fibre infrastructureAdditional wireless infrastructure64 52 117 38 64 154 271 050100150200250300A, Large SEDPs (fibreconnection)C, Small SEDPs (hotspotconnection)D, Small SEDPs (fibreconnection)Total investment cost (EUR billion)Additional fibre infrastructureAdditional wireless infrastructure 
 
Costing the new potential connectivity needs  | 8 

The incremental costs for the three scenarios the will provide future mobility are shown in Figure 
1.5. 

Figure 1.5: Summary of incremental costs between scenarios supporting future mobility [Source: Analysys 

Mason, 2016] 

The incremental costs for the three scenarios that will provide connections to rural areas are shown 
in Figure 1.6. It should be noted that the wireless scenarios are modelled as providing connections 
to 95% of populated areas. 

Figure 1.6: Summary of incremental costs between scenarios supporting connections to rural areas [Source: 

Analysys Mason, 2016] 

2006427-302 

.  

11 81 40 44 38 64 55 175 278 050100150200250300B, Macro mobileC, Small cell mobileF, Transport links mobileTotal investment cost (EUR billion)Additional fibre infrastructureAdditional wireless infrastructure11 81 168 44 38 55 175 342 050100150200250300350400B, Macro mobileC, Small cell mobileE, Residential coverageTotal investment cost (EUR billion)Additional fibre infrastructureAdditional wireless infrastructure 
 
Costing the new potential connectivity needs  | 9 

Figure 1.7 shows our estimate of the proportion of standalone fibre-related cost that may be met by 
commercial deployments from the private sector. It should be noted that this analysis is based on a 
large number of assumptions,3 and although developed using a granular geotyping approach, this 
kind  of  modelling  cannot  replicate  the  level  of  detail  that  an  operator  would  plan;  hence,  our 
results may not truly reflect the investment decisions that an operator would make.  

Figure 1.7: Summary of proportion of costs met by commercial deployments [Source: Analysys Mason, 2016] 

It  should  be  noted  that  the  proportion  of  costs  met  by  commercial  deployments  does  not  vary 
linearly  with  the  proportion  of  population  coverage  provided  by  such  deployments:  this  is 
demonstrated in the cumulative cost curve for  selected EU28 countries for Scenario E, shown in 
Figure 1.8 and Figure 1.9.  

3

Details of the assumptions made can be found in Sections 4.2.5 and 5.1.3. 

2006427-302 

.  

23 11 26 57 77 -42 55 140 172 40 -44 38 -64 64 55 119 197 249 103 050100150200250300A, LargeSEDPsB, MacromobileC, Small cellmobileD, SmallSEDPsE, ResidentialcoverageF, TransportlinksTotal investment cost (EUR billion)Fibre commercialFibre remainderWirelessTotal 
                                                      
  
Costing the new potential connectivity needs  | 10 

Figure 1.8: Cumulative cost of covering all 

Figure 1.9: Cumulative cost of covering all 

households for selected countries in the EU28 

households for selected countries in the EU28 

(Scenario E) [Source: Analysys Mason, 2016] 

(Scenario E) [Source: Analysys Mason, 2016] 

It should be noted that in the charts above, the lines that appear quite flat appear as such due to the 
comparatively  low  total  of  providing  100%  coverage  in  the  country  (due  to  the  country  being 
smaller than the others shown). The cost per user of the selected countries is shown in Figure 1.10 
and Figure 1.11. 

2006427-302 

.  

01020304050600%50%100%Cumulative total investment cost (EUR billion)Population coverageFranceGermanyItalySpainUK02468101214160%50%100%Cumulative total investment cost (EUR billion)Population coverageBelgiumPolandRomaniaSloveniaSweden 
 
 
 
 
Costing the new potential connectivity needs  | 11 

Figure 1.10: Cost per user for selected countries in 

Figure 1.11: Cost per user for selected countries in 

the EU28 (Scenario E) [Source: Analysys Mason, 

the EU28 (Scenario E) [Source: Analysys Mason, 

2016] 

2016] 

It should further be noted that the discontinuities in the cost per user curves are being caused by 
two effects:  

  Sharp increases in the cost per user can be caused by a change in the assumed availability of 
re-usable  duct.  For  example,  if  duct  is  only  widely  available  in  urban  areas  and  rural  areas 
feature more direct buried cable, this will significantly increase the cost. 

  Sharp decreases in cost per user can be caused the end of coverage of the cable network. With 
no cable coverage the market share assumptions means there is an increase in the number of 
users on the network which means the fixed costs are shared amongst a larger user base. 

Due to the large amount of uncertainty with the assumptions for future wireless networks, we have 
only  included  the  estimate  of  commercial  viability  for  fibre  infrastructure  in  Figure  1.7.  Our 
analysis  indicates  that  around  89%  of  the  population  of  the  EU28  could  be  viably  covered  by 
future  macro-cell  deployments,  as  modelled  in  Scenario  B.  However,  this  estimate  should  be 
treated  with  caution,  as  the  unit  costs  of  future  mobile  equipment  have  been  estimated  as  the 
technology is yet to be defined. Our forecasts indicate that in many countries, the viable coverage 
limit is below the coverage obligation issued with current generation mobile spectrum. Operators 
may be able to go further than predicted by our modelling, either by negotiating lower prices for 
their equipment, by undertaking more sophisticated radio and site planning approaches than we are 
able to in this study, or by changing the quality of service provided to end user. 

The  ability  of  operators  to  viably  deploy  either  widespread  small  cell  coverage  (Scenario  C)  or 
widespread transport link coverage (Scenario F) will also depend on a number  factors which are, 
as yet, quite uncertain, including: 

2006427-302 

.  

02,0004,0006,0008,00010,00012,00014,00016,00018,00020,0000%50%100%Investment cost per user (EUR)Population coverageFranceGermanyItalySpainUK01,0002,0003,0004,0005,0006,0007,0008,0009,0000%50%100%Investment cost per user (EUR)Population coverageBelgiumPolandRomaniaSlovenia 
 
 
 
Costing the new potential connectivity needs  | 12 

  The availability of funds from the operators populated-area macro-cell business, and whether 

the operator chooses to prioritise deploying small cells, or extending transport coverage; 

  The ability of operators to earn additional revenue from new services provided by small cells 

 

and/or extended transport link coverage; and 
[In the case of small cells] the extent to which the cost of extensive fibre coverage required to 
connect many of the small cells can be shared with other users and/or services. 

1.4  Implications of the results 

Economies of scale are crucial for 1Gbit/s fibre 

We estimate that complete fibre coverage across Europe (Scenario E) would cost EUR249 billion. 
This figure provides a useful reference point for the other scenarios, since it  represents the most 
wide-scale deployment.  This  amount is very similar to the amount  we estimated  in our previous 
study (around EUR250 billion), for three reasons. First, we have assumed lower labour rates due to 
changes  in  labour  costs;  this  effect  reduces  the  cost.  Second,  we  have  been  able  to  use  better 
quality geo-demographic data which is now available from Eurostat; this has allowed the model to 
better capture the proportion of premises in high-density (lower cost per subscriber) areas and also 
lowers the cost. The third reason increases cost: we are assuming a higher take-up rate of services 
among residential users than the previous study. 

The result for connecting small SEDPs (Scenario D) shows the effect of the economies of scale on 
fibre deployment costs. Despite connecting just 32% of the number of subscribers in Scenario E, 
79% of the cost of Scenario E is incurred. This effect is exacerbated when considering Scenario A: 
here only 0.75% of the subscribers in Scenario E are connected, but 26% of the cost is incurred. 
Therefore,  the  cost  per  connection  is  very  high.  This  behaviour  is  due  to  the  large  amount  of 
shared  costs  in  the  access  network,  and  highlights  the  strong  economies  of  scale  inherent  in 
networks of this kind. Large SEDPs are evenly distributed in relation to population (and therefore 
residential premises), and most of the network must be built regardless of which type of subscriber 
is served. It should be noted that many of the subscribers in Scenario A (e.g. businesses, schools, 
hospitals, local authority buildings) will each include a number of users. On that basis a high cost 
per connection may be justified on the basis that the cost per user is much lower. 

Economies of scale (or rather economies of scope) can also be seen across the scenarios. There are 
large synergies between scenarios, with scope for infrastructure to be re-used for more than one 
type  of  subscriber.  For  example,  if  fibre  were  to  be  deployed  to  serve  SEDPs,  this  would  also 
support a further deployment to connect residential users. 

Finally, the proportion of the standalone costs covered by the commercial sector is similar for each 
of Scenarios A, D and E. This is also because SEDPs are evenly distributed across populated areas.  

Future mobile connectivity should be able to provide at least 50Mbit/s 

Regarding the performance that future mobile connectivity networks could provide, we expect that 
by 2025, it will be possible for 1Gbit/s peak speed to be provided from the macro cell network. We 
estimate that the average  speed available  will  be  around  180Mbit/s,  which  is comfortably  above 

2006427-302 

.  

Costing the new potential connectivity needs  | 13 

the target of 50Mbit/s. This conclusion is subject to sufficient spectrum being available;4 (we note 
that the implications  of  this  requirement  are  potentially  significant  and  complex,  but  beyond the 
scope of this study). 

We have modelled the costs of providing macro-cell coverage to 95% of population areas, which 
is commensurate with the coverage obligations specified by spectrum licences in many countries. 
However this figure represents only 59% coverage of the territorial area of the EU28, so there will 
still be gaps in coverage and potentially service quality issues in remote and/or sparsely populated 
areas. 

A significant number of transport links are already covered in Europe: we assume 75% of railways 
and motorways, and 50% of state roads and provincial roads. However, providing full coverage of 
transport links would cost EUR103 billion, and operators may find it commercially challenging to 
deploy such coverage in addition to small cells (see the next point).  

The  costs  and  capabilities of  mobile  networks  in  2025  are  quite  uncertain:  2025  aligns  with  the 
timeframe  for  5G  being  introduced,  for  which  the  specifications  are  still  being  developed. 
However, our approach has been to estimate a cost which is commensurate with the goals of a 5G 
macro-layer,  including  support  for  a  continuous  user  experience,  the  Internet  of  Things  and 
mission-critical services. However, it is not  yet clear of the extent to which some aspects of 5G 
(such as sub-5ms latency) will be reliant on small cells (see the next point) 

Very dense small-cell networks covering the EU28 population will be very expensive 

We have also modelled a wide deployment of small cells covering 100% of the population, similar 
to the coverage modelled for macro cells, but with a very high density. Such a deployment would 
be commensurate with the aims of 5G to provide peak mobile speeds of 10Gbit/s or more via the 
use of mm-wave spectrum. We estimate that such a deployment would also allow home workers to 
wirelessly connect at average speeds of over 1Gbit/s.  

We  estimate  that  the  standalone  cost  of  the  modelled  small-cell  deployment  would  be  EUR119 
billion. However, this figure is subject to a number of uncertainties; our calculations assume that 
the following  conditions  will  be  met  (cost  figures  are  standalone,  not  cumulative,  and for 100% 
coverage):5   

  The unit cost of a small cell will fall to EUR1000. We expect that this will be possible due to 
the high volumes involved (around 36 million cells would be needed for 95% coverage of the 
EU28). However, if this target cost was not met, it would have a direct impact on the results 
(i.e. if the unit cost were EUR2000, it would double the required investment). 

  Around 50% of cells will be connected via a wireless fronthaul connection (i.e. only 50% will 
require connections via fibre). The precise definition of 5G small infrastructure is still being 
developed,  but  the  proportion  of  cells  using  wireless  rather  than  fibre  backhaul  connections 

4

5

Peak speeds of 1Gbit/s have been demonstrated using aggregation of multiple carriers, see: 
http://www.lightreading.com/mobile/4g-lte/lte-advanced-pro-gigabit-4g-anyone/a/d-id/721036 

For details, see our analysis in Section 5.2.3. 

2006427-302 

.  

                                                      
  
  
Costing the new potential connectivity needs  | 14 

could significantly impact costs: our analysis shows the standalone cost of Scenario C could 
vary between EUR75 billion and EUR164 billion. 

  Operators  are  able  to  share  the  small-cell  infrastructure.  Due  to  the  large  number  of  cells 
involved, and constraints arising from the deployment cost and finding sufficient locations to 
install the cells, we have assumed that in each country all operators share a single network of 
small cells. If they must each deploy their own set of cells, this would have a direct impact on 
costs (i.e. if there are three operators, then the investment cost for the wireless infrastructure 
would be multiplied by three). Without sharing, the standalone cost of Scenario C could rise to 
EUR192  billion,  i.e.  an  increase  of  EUR73  billion.  However,  the  development  of  sharing 
arrangements between operators will bring its own set of operational challenges. 

  The radius of each small cell is at least 200 metres. Due to the high capacity but very short 
range  of  mm-wave  spectrum,  we  have  assumed  that  the  deployment  is  driven  by  coverage 
performance only (i.e. this high frequency spectrum will always be able to provide sufficient 
capacity).  The  radius  of  the  small  cell  can  have  a  large  impact  on  the  results:  reducing  the 
radius  to  100m  would  increase  the  standalone  cost  for  Scenario  C  to  EUR236  billion  i.e. 
halving the radius increases costs by 98%. 

If  any  one  of  these  assumptions  is  not  achieved,  the  deployment  of  a  very  dense,  widespread 
coverage of small cells could be more expensive than wide-scale fibre. The commercial viability 
of such a network remains a major uncertainty at this stage. 

Other considerations highlighted by the scenarios 

The  three  fibre-focused  scenarios,  which  are  concerned  with  providing  1Gbit/s  wireline 
connectivity  to  large  SEDPs,  small  SEDPs  and  residential  premises,  represent  three  different 
points  on  the  same  continuum.  Although  this  study  has  considered  the  cost  of  deployment  in 
detail, the socio-economic benefit has not been within the scope of the work. It may be necessary 
to analyse the socio-economic benefit of connecting each of these different types of users, in order 
to assess which fibre-based scenario represents the ‘best value’. 

On the wireless side, our analysis forecasts that developments in macro cell technology will see 
the possibility of widespread coverage of at least 50Mbit/s services over EU28 population areas. 
However, significant additional cost would need to be incurred to go beyond this level of service; 
either to extend the coverage of 50Mbit/s to all major transport links, or to increase the available 
speed  of  service  in  population  areas  to  1Gbit/s.  Whether  operators  have  sufficient  financial 
resources to achieve these additional rollouts remains a significant uncertainty. 

Finally, within the scenarios considered by this study there is an interesting choice available for 
connecting  small  SEDPs:  this  could  be  achieved  either  via  the  small-cell  wireless  (hotspot) 
approach of Scenario C, or the wireline fibre approach of Scenario D. Both options have similar 
costs,  but  Scenario  C  has  the  advantage  of  also  offering  mobile  connectivity,  while  the  fibre 
connection  provided  in  Scenario  D  could  be  more  future  proof.  Again,  further  analysis  of  the 
benefits of these two technological approaches to deployment may be beneficial. 

2006427-302 

.  

Costing the new potential connectivity needs  |  15 

[French version of executive summary] 

1.1  Objectifs de l’étude 

La Commission européenne a confié à Analysys Mason une étude relative au calcul des coûts des 
nouveaux  besoins  potentiels  en  connectivité,  « Costing  the  New  Potential  Connectivity  Needs » 
SMART 2015/0068 Procédure négociée avec 5 Candidats (Article 137.1 RAP).  

La  Commission  a  publié  la  « Stratégie  numérique  pour  l'Europe »  en  2010,  qui  intègre  des 
objectifs  ambitieux  à  atteindre  d'ici  2020  concernant  le  haut  débit.  La  Commission  envisage 
maintenant de nouveaux objectifs allant au-delà de 2020 et souhaite obtenir des estimations fiables 
quant  aux  investissements  qui  devraient  être  consentis  pour  satisfaire  les  futurs  besoins 
hypothétiques en connectivité. Cette étude fait suite au travail de modélisation des coûts réseaux 
réalisé  par  Analysys  Mason  en  2013  pour  la  Commission  dans  le  cadre  de  l’étude  relative  à 
l’impact socio-économique du haut débit, « Study on the socio-economic impact of bandwidth »6. 

La présente étude analyse trois cas principaux, convenus avec la Commission, et visant à explorer 
un large éventail de scénarios de déploiement d’infrastructures : 

  Cas 1 : connexions à 1 Gbit/s pour les Développeurs Socio-Economiques et les Professionnels 

(DSEP)7 ; 

  Cas 2 : connectivité mobile, permettant de généraliser l’accès à des débits de 50 Mbit/s pour 
95% de la population, notamment au niveau des principaux liens autoroutiers et ferroviaires ; 
  Cas  3 :  connexions  à  1 Gbit/s  pour  tous  les  ménages  appartenant  aux  28  Etats  membres  de 
l’Union européenne à l’aide de la technologie filaire fixe selon trois niveaux de couverture : 
80%, 90% et 100%.  

Quel que soit le cas, les objectifs de couverture et de débit doivent être atteints d’ici 2025. 

1.2  Présentation de l’approche suivie 

Afin d’examiner les trois cas décrits ci-dessus et d’explorer un large éventail de questions dans le 
cadre de l'étude, nous avons défini six scénarios pour le déploiement de l'infrastructure haut débit 
en  Europe.  Ces  scénarios  sont  incrémentaux  les  uns  par  rapport  aux  autres,  chaque  scénario 
prenant  en  compte  des  besoins  en  connectivité  additionnels  par  rapport  au  scénario  précédent 
(moyennant un coût supplémentaire). 

Scénario A: 
Grands DSEP 

Le  premier  scénario  évalue  des  connexions  filaires  à  1 Gbit/s  reliant  les 
grands  DSEP.  Notre  analyse  montre  que  les  grands  DSEP  sont  assez 
équitablement répartis entre les zones de population (et non pas concentrés 
dans  des  zones  à  haute  densité)  et  que,  par  conséquent,  de  la  fibre  sera 

6

7

Etude disponible en anglais sur : https://ec.europa.eu/digital-single-market/en/news/study-socio-economic-impact-
bandwidth-smart-20100033. 

Les grands DSEP comprennent des universités, des écoles, des centres de recherche, des parcs d’entreprises, des 
pôles d’innovation, des hôpitaux, des bibliothèques et des PME comptant au moins 50 employés, et sont raccordés 
par le biais d’une infrastructure filaire fixe. Les petits DSEP comprennent des PME plus petites ainsi que des 
professionnels/travailleurs indépendants/télétravailleurs, et sont raccordés par le biais d’une connexion filaire fixe ou 
sans fil. 

2006427-302 

.  

                                                      
  
  
Costing the new potential connectivity needs  | 16 

Scénario B : 
Connectivité par 
macro-cellules 
pour les zones 
peuplées 

Scénario C : 
Connectivité par 
petites cellules 
pour les zones 
peuplées 

Scénario D : Petits 
DSEP 

nécessaire  sur  la  plus  grande  partie  du  réseau  d'accès  pour  les  raccorder. 
Nous supposons que tous les grands DSEP adopteraient ce type de service 
(c.-à-d. que le taux d’adoption par les grands DSEP serait de 100%). 

Le  deuxième  scénario  évalue  des  connexions  radio  à  travers  un  réseau  de 
macro-cellules desservant l’essentiel des zones peuplées. Le scénario prend 
en  compte  à  la  fois  le  coût  de  l'infrastructure  cellulaire  radio  et  celui  du 
raccordement  en  fibre  vers  le  cœur  de  réseau  (supposé  être  une  remontée 
vers un central téléphonique). Les coûts sont présentés pour une couverture 
de 95% de la population. 

Le troisième scénario évalue des connexions sans fil à travers un réseau de 
petites  cellules  desservant  les  zones  peuplées.  Ce  scénario  prévoit  de 
déployer de petites cellules « en profondeur » dans le réseau, ce qui entraîne 
une  très  forte  densité  de  petites  cellules  (en  réalité  la  couverture  d'un  tel 
réseau peut être plus faible que les résultats de la modélisation, mais nous 
cherchons à tester l’impact en termes de coûts d'un tel réseau). 

Ce  scénario  couvre  le  cas  où  les  petits  DSEP  sont  connectés  par 
l’intermédiaire  d’un  « point  d’accès  radio ».  Il  couvre  également  le 
déploiement  de  services  5G  à  très  grande  capacité  utilisant  des  ondes 
millimétriques,  à  extrêmement  haute  fréquence.  Nous  partons  du  principe 
que  certaines  cellules  seraient  reliées  par  l’intermédiaire  d’un  réseau  de 
collecte fibre (le reste étant relié par l’intermédiaire d’un réseau de collecte 
radio). Toute fibre déployée pour (par exemple) le Scénario A pourrait être 
réutilisée pour ce type de connexion. 

Les  coûts  sont  présentés  pour  une  couverture  de  95%  de  la  population, 
comme pour le scénario précédent. 

Le  quatrième  scénario  évalue  des  connexions  filaires  à  1 Gbit/s  pour  les 
petits DSEP. Ce scénario est en réalité une variante du Scénario A. Encore 
une  fois,  notre  analyse  suppose  que  les  DSEP  sont  uniformément  répartis 
dans  les  zones  de  population,  mais  le  scénario  D  compte  beaucoup  plus 
d'utilisateurs  finals  que  le  Scénario  A.  Dans  ce  scénario,  une  plus  grande 
partie  du  réseau  d'accès  doit  être  connectée  pour  raccorder  tous  les 
utilisateurs finals, bien que la fibre déployée pour les scénarios précédents 
(par exemple, les scénarios A et C) puisse être réutilisée. 

Nous  supposons  que  tous  les  petits  DSEP  adopteraient  ce  type  de  service 
(taux d’adoption de 100%). 

Scénario E : 
Connectivité par 
fibre pour les 
locaux résidentiels 

Le  cinquième  scénario  évalue  des  connexions  filaires  à  1 Gbit/s  pour  les 
locaux  résidentiels.  Nous  supposons  que  les  zones  résidentielles  sont 
entièrement  couvertes  par  l'infrastructure  filaire,  même  si  le  branchement 
final  (la  connexion  entre  le  point  de  connexion  secondaire  et  l'utilisateur 
final)  n’est  installé  que  lorsqu’un  client  souscrit  au  service.  Le  taux 

2006427-302 

.  

Costing the new potential connectivity needs  | 17 

Scénario F : 
Connectivité dans 
les transports 

d’adoption  moyen  pondéré  dans  les  28  Etats  membres  de  l’Union 
européenne devrait être de 81% d’ici 2025. Nous modélisons les coûts pour 
une  couverture  de  80%,  90%  et  100%  des  zones  peuplées.  Comme 
précédemment,  il  serait  possible  de  réutiliser  la  fibre  déployée  pour  les 
scénarios précédents (par exemple, les scénarios A et C). 

Le sixième et dernier scénario évalue la fourniture d’une connectivité radio 
couvrant les réseaux de transport. Nous prenons en compte des hypothèses 
pour  tenir  compte  de  la  couverture  existante  des  réseaux  de  transport,  soit 
parce  que  ceux-ci  sont  dans  des  zones  peuplées,  soit  en  raison  de 
déploiements  liés  aux  transports.  Nous  évaluons  ensuite  le  coût  engendré 
par  les  déploiements  supplémentaires  nécessaires  pour  couvrir  l'ensemble 
des réseaux de transport qui ne le sont pas actuellement. 

1.3  Résultats pour chaque scénario 

Il convient de noter que les résultats ci-dessous représentent notre meilleure estimation des 
coûts fondée sur des hypothèses raisonnables. Nos analyses de sensibilité (voir la Section 5.2) 
montrent que chacun des résultats peut être sujet à des variations importantes. Si les effets 
pris en compte dans les analyses de sensibilité peuvent  se matérialiser (individuellement ou 
de façon combinée), il est alors possible que le coût total  réel soit inférieur à celui présenté 
ici. 

La Figure 1.1 indique les coûts de déploiement intrinsèques pour chaque scénario, c.-à-d. le coût 
encouru si chaque scénario d’infrastructure est élaboré indépendamment des autres (sans partage 
des coûts entre les scénarios).  

Figure 1.12 : Résumé des coûts intrinsèques par scénario [Source : Analysys Mason, 2016]  

La  Figure  1.2  résume  les  hypothèses  sur  lesquelles  repose  le  calcul  des  coûts  intrinsèques  pour 
chaque scénario. 

2006427-302 

.  

64 11 81 197 249 40 44 38 64 050100150200250300A. Grands DSEPB. Macro-cellulesC. PetitescellulesD. Petits DSEPE. LocauxrésidentielsF. ConnectivitétransportsCoût d'investissement total (EUR milliards)Infrastructure fibreInfrastructure radio 
Costing the new potential connectivity needs  | 18 

Figure 1.13 : Résumé des hypothèses concernant les coûts intrinsèques [Source : Analysys Mason, 2016] 

Scénario 

Hypothèses de 
connexion 

Hypothèses de 
couverture 

Infrastructure 
réutilisée 

Les fourreaux existants 
peuvent être réutilisés 

L’infrastructure passive 
existante peut être 
réutilisée 

Les fourreaux existants 
peuvent être réutilisés 
pour le réseau de 
collecte en fibre optique 
; les cellules peuvent 
être installées sur les 
infrastructures 
existantes (ex. : 
poteaux, immeubles) 

Les fourreaux existants 
peuvent être réutilisés 

Les fourreaux existants 
peuvent être réutilisés 

Scénario A : Grands 
DSEP 

Scénario B : 
Connectivité par 
macro-cellules pour les 
zones peuplées 

Scénario C : 
Connectivité par petites 
cellules pour les zones 
peuplées 

Scénario D : Petits 
DSEP 

Scénario E : 
Connectivité par fibre 
pour les locaux 
résidentiels 

100% des grands 
DSEP sont connectés à 
un réseau à 1 Gbit/s 

Certains DSEP sont 
connectés par 
l’intermédiaire d’une 
liaison louée ou d’un 
réseau câblé, plutôt 
que le réseau FTTP 
modélisé 

Les utilisateurs du haut 
débit mobile 
(notamment les 
utlisateurs de 
smartphones et 
d’appareils à écran plus 
grand) sont connectés 

La capacité des petites 
cellules est suffisante 
pour prendre en charge 
tous les types de 
connexions  

100% des petits DSEP 
sont connectés à un 
réseau à 1 Gbit/s. 

Certains DSEP sont 
connectés par 
l’intermédiaire d’un 
réseau câblé, plutôt 
que le réseau FTTP 
modélisé 

En moyenne, 81% des 
ménages souscrivent à 
une offre haut débit et 
100% de ces ménages 
se connectent via un 
réseau à 1 Gbit/s d’ici 
2025 

Note : certains 
utilisateurs peuvent se 
connecter via un 
réseau câblé 

Note : ce scénario 
n’inclut pas le coût du 
raccordement final des 
DSEP (ex.: entreprises) 

La fibre du réseau 
d’accès est installée 
uniquement pour 
connecter les grands 
DSEP, ce qui implique 
une couverture partielle 
du réseau d’accès 

Environ 95% de 
couverture pour chaque 
Etat membre, 
déterminée sur la base 
de la couverture (rayon 
de cellule) et de la 
capacité de chaque 
macro-cellule 

Environ 95% de 
couverture pour chaque 
Etat membre, 
déterminée uniquement 
sur la base du rayon 
des cellules 

La fibre du réseau 
d’accès est installée 
uniquement pour 
raccorder les petits 
DSEP (bien que ceci 
nécessite la pose de 
fibre sur la majorité du 
réseau d’accès) 

Couverture totale du 
réseau d’accès 
jusqu’au dernier point 
de branchement avant 
les foyers dans chaque 
zone desservie (le 
modèle considère une 
couverture de 80%, 
90% et 100% des 
zones). Le 
raccordement final au 
foyer s’effectue 
lorsqu’un client souscrit 
au service 

2006427-302 

.  

Costing the new potential connectivity needs  | 19 

Scénario 

Hypothèses de 
connexion 

Hypothèses de 
couverture 

Infrastructure 
réutilisée 

Scénario F : 
Connectivité dans les 
transports 

La capacité des macro-
cellules est suffisante 
pour que tous les types 
de connexion dans les 
transports puissent être 
pris en charge 

Le modèle évalue la 
couverture des réseaux 
de transports non 
encore couverts  

Les fourreaux existants 
(le long des réseaux de 
transport) peuvent être 
réutilisés 

Dans la Figure 1.3, nous montrons les coûts incrémentaux de déploiement des scénarios de A à F ; 
cela montre l'effet de l'infrastructure qui peut être réutilisée (partagée) entre les scénarios. Bien que 
non  représenté  sur  le  graphique,  le  scénario  C  peut  réutiliser  29 milliards  d’euros  dans 
l'infrastructure  de  fibre  des  scénarios  précédemment  déployés,  le  scénario  D  peut  réutiliser  80 
milliards d’euros, et le scénario E peut réutiliser 177 milliards d’euros. Il n'y a pas de réutilisation 
entre les infrastructures radio. 

Figure 1.14 : Résumé des coûts incrémentaux entre les scénarios [Source : Analysys Mason, 2016] 

Dans  les  figures  ci-dessous,  nous  montrons  les  coûts  incrémentaux  pour  les  scénarios 
d'infrastructure qui soutiendront les trois objectifs clés de la Commission européenne : connexion 
des DSEP, aide à la mobilité et connexions dans les zones rurales. Les coûts incrémentaux pour les 
trois scénarios qui permettront de raccorder les DSEP sont présentés en Figure 1.4. Il convient de 
noter que, si les connexions en fibre aux petits DSEP sont déployées à la place des points d'accès 
radio  (et  non  pas  en  plus  des  points  d'accès  radio),  il  serait  possible  d’éviter  le  coût  de  la 
couverture radio associé au scénario C. 

2006427-302 

.  

64 11 52 117 72 40 44 38 64 64 120 210 327 399 502 0100200300400500600A. Grands DSEPB. Macro-cellulesC. PetitescellulesD. Petits DSEPE. LocauxrésidentielsF. ConnectivitétransportsCoût d'investissement total (EUR milliards)Infrastructure fibre additionnelleInfrastructure radio additionnelle 
 
Costing the new potential connectivity needs  | 20 

Figure 1.15 : Résumé des coûts incrémentaux entre les scénarios considérant le raccordement des DSEP 

[Source : Analysys Mason, 2016] 

Les  coûts  incrémentaux  pour  les  trois  scénarios  intégrant  la  mobilité  future  sont  présentés  en 
Figure 1.5. 

Figure 1.16 : Résumé des coûts incrémentaux entre les scénarios intégrant la mobilité future [Source : 

Analysys Mason, 2016] 

2006427-302 

.  

64 52 117 38 64 154 271 050100150200250300A. Grands DSEP (connexionfibre)C. Petits DSEP (connexionpoint d'accès)D. Petits DSEP (connexionfibre)Coût d'investissement total (EUR milliards)Infrastructure fibre additionnelleInfrastructure radio additionnelle11 81 40 44 38 64 55 175 278 050100150200250300B. Macro-cellulesC. Petites cellulesF. Connectivité transportsCoût d'investissement total (EUR milliards))Infrastructure fibre additionnelleInfrastructure radio additionnelle 
 
Costing the new potential connectivity needs  | 21 

Les  coûts  incrémentaux  pour  les  trois  scénarios  intégrant  des  connexions  desservant  les  zones 
rurales  sont  présentés  en  Figure  1.6.  Il  convient  de  noter  que  les  scénarios  radio  sont  modélisés 
comme fournissant des connexions à 95% des zones peuplées. 

Figure 1.17: Résumé des coûts incrémentaux entre les scénarios intégrant le raccordement des zones 

rurales [Source : Analysys Mason, 2016] 

La Figure 1.7 montre notre estimation de la proportion des coûts liés uniquement à la fibre pouvant 
être pris en charge dans le cadre de déploiements commerciaux par le secteur privé. Il convient de 
noter  que  cette  analyse  repose  sur  un  grand  nombre  d'hypothèses8  et,  bien  qu’elle  ait  été 
développée à l’aide d’une approche détaillée utilisant des géotypes, ce genre de modélisation ne 
peut  pas  répliquer  le  niveau  de  détail  qu’un  opérateur  planifierait ;  par  conséquent,  les  résultats 
peuvent ne pas refléter réellement les décisions d'investissement d’un opérateur. 

8

De plus amples informations sur les hypothèses retenues sont disponibles dans les Sections 4.2.5 et 5.1.3. 

2006427-302 

.  

11 81 168 44 38 55 175 342 050100150200250300350400B. Macro-cellulesC. Petites cellulesE. Locaux résidentielsCoût d'investissement total (EUR milliards))Infrastructure fibre additionnelleInfrastructure radio additionnelle 
                                                      
  
Costing the new potential connectivity needs  | 22 

Figure 1.18 : Résumé de la proportion des coûts pouvant être pris en charge par des déploiements 

commerciaux [Source : Analysys Mason, 2016] 

Il convient de noter que la proportion des coûts pris en charge par des déploiements commerciaux 
ne  varie  pas  linéairement  avec  la  couverture  de  la  population  découlant  de  ces  déploiements, 
comme  le  montre  la  courbe  des  coûts  cumulés  pour  les  pays  européens  sélectionnés  pour  le 
scénario E (voir Figure 1.8 et Figure 1.9). 

Figure 1.19 : Coût cumulé engendré par la 

Figure 1.20 : Coût cumulé engendré par la 

couverture de tous les ménages dans certains pays 

couverture de tous les ménages dans certains pays 

de l’UE28 (Scénario E) [Source : Analysys Mason, 

de l’UE28 (Scénario E) [Source : Analysys Mason, 

2016] 

2016] 

2006427-302 

.  

23 11 26 57 77 -42 55 140 172 40 -44 38 -64 64 55 119 197 249 103 050100150200250300A. Grands DSEPB. Macro-cellulesC. PetitescellulesD. Petits DSEPE. LocauxrésidentielsF. ConnectivitétransportsCoût d'investissement total (EUR milliards)Déploiements fibre (commerciaux)Déploiements fibre (restants)Déploiements radio01020304050600%50%100%Coût d'investissement total cumulé(EUR milliards)Couverture de la populationFranceAllemagneItalieEspagneRoyaume-Uni02468101214160%50%100%Coût d'investissement total cumulé (EUR milliards)Couverture de la populationBelgiquePologneRoumanieSlovénieSuède 
 
 
 
 
Costing the new potential connectivity needs  | 23 

Il  est  également  à  noter  que,  dans  les  graphiques  ci-dessus,  certaines  courbes  semblent  plutôt 
planes  en  raison  du  coût  total  relativement  faible lié  à  une couverture  de  100%  dans  le  pays (le 
pays correspondant étant plus petit que les autres pays représentés). Le coût par utilisateur dans les 
pays sélectionnés est représenté à la Figure 1.10 et la Figure 1.11. 

Figure 1.21 : Coût par utilisateur pour certains pays de 

Figure 1.22 : Coût par utilisateur pour certains pays de 

l’UE28 (Scénario E) [Source : Analysys Mason, 2016] 

l’UE28 (Scénario E) [Source : Analysys Mason, 2016] 

Il  convient  en  outre  de  noter  que  les  discontinuités  dans  les  courbes  du  coût  par  utilisateur  sont 
causées par deux effets :  

  De fortes augmentations dans le coût par utilisateur peuvent être causées par une variation de 
la  place  disponible  supposée  dans  les  fourreaux  réutilisables.  Par  exemple,  si  les  fourreaux 
sont essentiellement disposés dans les zones urbaines alors que les zones rurales n’ont que des 
câbles enfouis en pleine terre, cela va augmenter considérablement le coût. 

  Des  diminutions  marquées  dans  le  coût  par  utilisateur  peuvent  être  dues  à  la  fin  de  la 
couverture du réseau câblé. En l'absence de couverture par câble, les hypothèses de parts de 
marché  considèrent  qu'il  y  a  une  augmentation  du  nombre  d'utilisateurs  sur  le  réseau  qui 
signifie que les coûts fixes sont partagés entre une base d'utilisateurs plus grande. 

En raison du degré d’incertitude important entourant les hypothèses concernant les futurs réseaux 
radio,  nous  avons  seulement  pris  en  compte  l'estimation  de  la  viabilité  commerciale  des 
infrastructures  en  fibre  optique  en  Figure  1.7.  Notre  analyse  indique  qu’il  pourrait  être  viable 
commercialement  de  couvrir  près  de  89%  de  la  population  de  l'UE28  à  l’aide  de  déploiements 
utilisant des macro-cellules, tel que modélisé dans le scénario B. Cependant, cette estimation doit 
être traitée avec prudence, car les coûts unitaires des futurs équipements mobiles ont été estimés 

2006427-302 

.  

02,0004,0006,0008,00010,00012,00014,00016,00018,00020,0000%50%100%Coût d'investissement par utilisateur (EUR)Couverture de la populationFranceAllemagneItalieEspagneRoyaume-Uni01,0002,0003,0004,0005,0006,0007,0008,0009,0000%50%100%Coût d'investissement par utilisateur (EUR)Couverture de la populationBelgiquePologneRoumanieSlovénie 
 
 
 
 
Costing the new potential connectivity needs  | 24 

alors  que  la  technologie  est  encore  à  définir.  Nos  prévisions  indiquent  que,  dans  de  nombreux 
pays, la limite de couverture viable est inférieure à l'obligation de couverture associée au spectre 
mobile de la génération actuelle. Il se peut que les opérateurs soient en mesure d'aller plus loin que 
prévu  par  notre  modélisation,  en  négociant  des  prix  plus  bas  pour  leurs  équipements,  en 
entreprenant des démarches de planification de sites et de couverture radio plus sophistiquées que 
ce que nous sommes en mesure de faire dans le cadre de cette étude, ou en changeant la qualité du 
service fourni à l’utilisateur final. 

La capacité des opérateurs à étendre de manière viable la connectivité à l’aide de petites cellules 
(scénario  C) ou  à améliorer  la connectivité dans les  transports  (Scénario  F)  dépendra aussi  d’un 
certain nombre de facteurs qui sont, pour l’instant, plutôt incertains, notamment : 

  La disponibilité des fonds auprès des opérateurs, et si les opérateurs choisissent de donner la 
priorité  au  déploiement  de  petites  cellules  ou  à  l’extension  de  la  connectivité  dans  les 
transports ; 

  La  capacité  des  opérateurs  à  gagner  des  revenus  supplémentaires  provenant  de  nouveaux 
services fournis par les petites cellules et/ou l’extension de la connectivité dans les transports ; 
et 

 

[Dans le  cas  des  petites  cellules]  La  mesure dans  laquelle  il  serait possible  de partager  avec 
d'autres  utilisateurs  et/ou  services  le  coût  engendré  par  un  vaste  réseau  en  fibre  optique 
nécessaire pour connecter un grand nombre de petites cellules. 

1.4  Implications des résultats 

Les  économies  d’échelle  sont  essentielles  pour  assurer  une  couverture  réseau  en  fibre  optique 
pouvant atteindre 1 Gbit/s 

Nous estimons que le coût d’un réseau en fibre couvrant toute l'Europe (scénario E) s’élèverait à 
249 milliards d'euros. Ce chiffre constitue un point de référence utile pour les autres scénarios, car 
il  représente  le  déploiement  le  plus  vaste.  Ce  montant  est  très  similaire  à  celui  que  nous  avions 
estimé dans notre étude précédente (environ 250 milliards d’euros), et ce pour trois raisons. Tout 
d'abord, nous avons utilisé des taux plus faibles pour la main d’œuvre en raison de l'évolution des 
coûts de main d'œuvre, ce qui a pour effet de réduire le coût. Deuxièmement, nous avons été en 
mesure  d'utiliser  des  données  géodémographiques  de  meilleure  qualité  disponibles  auprès 
d'Eurostat, ce qui a permis au modèle de mieux appréhender la proportion de locaux situés dans 
des zones à forte densité (coût plus faible par abonné) et a également permis de réduire le coût. La 
troisième raison est, quant à elle, à l’origine d’une augmentation du coût : nous avons retenu un 
taux  d’adoption  des  services  plus  élevé  chez  les  utilisateurs  résidentiels  par  rapport  à  l'étude 
précédente. 

Le résultat concernant le raccordement des petits DSEP (scénario D) montre l'effet des économies 
d'échelle  sur  les  coûts  de  déploiement  de  la  fibre.  Avec  à  peine  32%  du  nombre  d'abonnés 

2006427-302 

.  

Costing the new potential connectivity needs  | 25 

raccordés  dans  le  scénario  E,  79%  du  coût  du  scénario  E  est  malgré  tout  engagé.  Cet  effet  est 
accentué lorsque l'on considère le scénario A : seulement 0,75% des abonnés dans le scénario E 
sont connectés, mais 26% du coût est engagé. Par conséquent, le coût par connexion est très élevé. 
Ce comportement est dû à la quantité  élevée  de coûts partagés dans le réseau d'accès, et met en 
évidence  les  fortes  économies  d'échelle  inhérentes  à  ce  type  de  réseaux.  Les  grands  DSEP  sont 
répartis uniformément par rapport à la population (et donc aux locaux d'habitation), et la majorité 
du  réseau  doit  être  construite,  quel  que  soit  le  type  d'abonné  desservi.  Il  convient  de  noter  que 
nombre  d’abonnés  dans le  scénario  A  (par  exemple, entreprises,  écoles,  hôpitaux,  bâtiments  des 
collectivités  locales)  concentreront  chacun  un  grand  nombre  d'utilisateurs.  Ceci  peut  justifier  un 
coût élevé par connexion en raison du coût par utilisateur beaucoup plus faible. 

On observe également des économies d'échelle (ou plutôt des économies de gamme) d’un scénario 
à  l’autre.  Il  existe  des  synergies  importantes  entre  les  scénarios,  avec  la  possibilité  de  réutiliser 
l’infrastructure pour plus d'un type d'abonné. Par exemple, si la fibre venait à être déployée pour 
desservir  les  DSEP,  cela  permettrait  également  de  prendre  en  charge  un  déploiement 
supplémentaire pour connecter les utilisateurs résidentiels. 

Enfin,  la  proportion  des  coûts  couverts  par  le  secteur  commercial  est  similaire  pour  chacun  des 
scénarios  A,  D  et  E.  Cela  s’explique  également  par  le  fait  que  les  DSEP  sont  répartis  de  façon 
uniforme entre les zones peuplées. 

La  future  connectivité  mobile  devrait  être  en  mesure  de  fournir  des  débits  atteignant  au  moins 
50 Mbit/s 

En  ce  qui  concerne  les  performances  que  les  futurs  réseaux  de  connectivité  mobile  pourraient 
fournir, nous pensons que, d'ici 2025, il sera possible d’atteindre des vitesses de pointe de 1 Gbit/s 
à  partir  d’un  réseau  de  cellules  macro.  Nous  estimons  que  la  vitesse  moyenne  disponible  sera 
d’environ 180 Mbit/s, ce qui est largement au-dessus de l’objectif de 50 Mbit/s. Il faudra pour cela 
qu’une quantité de spectre suffisante soit disponible9 (nous notons que les implications de ce point 
sont potentiellement importantes et complexes, mais au-delà de la portée de la présente étude). 

Nous  avons  modélisé  le  coût  lié  à  la  couverture  de  95%  des  zones  peuplées  à  l’aide  de  macro-
cellules, ce qui correspond aux obligations de couverture prévues par les licences de spectre dans 
de  nombreux  pays.  Toutefois,  ce  chiffre  représente  une  couverture  de  seulement  59%  de  la 
superficie  des  pays  de  l’UE28.  Il  y  aura  donc  encore  des  lacunes  dans  la  couverture  et 
potentiellement  des  problèmes  de  qualité  de  service  dans  les  régions  isolées  et/ou  faiblement 
peuplées. 

Un  nombre  important  de liaisons  de transport  sont  déjà  couvertes  en  Europe:  nous  avons  retenu 
75%  des  réseaux  ferroviaires  et  autoroutiers,  et  50%  des  routes  nationales  et  des  routes 
secondaires. La couverture complète des réseaux de transport coûterait 103 milliards d’euros, et les 

9

La possibilité de vitesses de pointe à 1 Gbit/s a été démontrée en agrégeant des canaux multiples. Voir : 
http://www.lightreading.com/mobile/4g-lte/lte-advanced-pro-gigabit-4g-anyone/a/d-id/721036 

2006427-302 

.  

                                                      
  
Costing the new potential connectivity needs  | 26 

opérateurs pourraient trouver difficile commercialement de déployer une telle couverture en plus 
des petites cellules (voir point suivant). 

Les coûts et les capacités des réseaux mobiles en 2025 sont extrêmement incertains : 2025 s’aligne 
sur le calendrier de lancement de la 5G, dont les spécifications sont encore en cours d'élaboration. 
Cependant,  notre  approche  a  été  d'estimer  un  coût  qui  est  en  rapport  avec  les  objectifs  d'une 
macro-couche  5G,  avec  une  expérience  utilisateur  continue,  l’Internet  des  objets  et  les  services 
essentiels.  Cependant,  la  mesure  dans  laquelle  certains  aspects  de  la  5G  (comme  une  latence 
inférieure à 5 ms) seront tributaires des petites cellules n’est pas encore claire (voir point suivant). 

L’utilisation  de  réseaux  à  petite  cellules  très  denses  pour  couvrir  la  population  des  pays  de 
l’UE28 sera très coûteuse 

Nous  avons  également  modélisé  un  déploiement  à  grande  échelle  de  petites  cellules,  couvrant 
100%  de  la  population,  semblable  à  la  couverture  modélisée  pour  les  macro-cellules,  mais  avec 
une très forte densité. Un tel déploiement correspondrait aux  objectifs de la 5G pour fournir des 
vitesses mobiles de pointe de l’ordre de 10 Gbit/s ou plus via l'utilisation d'ondes millimétriques. 
Nous  estimons  qu'un  tel  déploiement  permettrait  également  aux  travailleurs  à  domicile  de  se 
connecter sans fil à des vitesses moyennes de plus de 1 Gbit/s. 

Nous  estimons  que  le  coût  du  déploiement  de  petites  cellules  selon  notre  modèle  serait  de 
119 milliards  d’euros.  Cependant,  ce  chiffre  est  sujet  à  un  certain  nombre  d'incertitudes ;  nos 
calculs  supposent  que  les  conditions  suivantes  seront  remplies  (les  coûts  sont  évalués  pour  un 
déploiement autonome, ne sont pas cumulatifs, et portent sur une couverture de 100%)10 :  

  Le coût unitaire d'une petite cellule tombera à 1000 euros. Nous nous attendons à ce que cela 
soit possible en raison des volumes élevés impliqués (environ 36 millions de cellules seraient 
nécessaires  pour  une  couverture  de  95%  de  l'UE28).  Toutefois,  si  ce  coût  cible  n'était  pas 
atteint,  il  aurait  un  impact  direct  sur  les  résultats  (à  savoir,  si  le  coût  unitaire  était  de 
2000 euros, l'investissement requis serait deux fois plus important). 

  Environ  50%  des  cellules  seront  connectées  via  une  connexion  radio  au  réseau  de 
transmission (c.-à-d. 50% seulement des cellules seront connectées via la fibre). La définition 
précise  de  la  partie  de  l’infrastructure  5G  portant  sur  les  petites  cellules  est  encore  en 
développement,  mais  la  proportion  de  cellules  utilisant  des  connexions  radio  plutôt  que  des 
connexions  au  réseau  de  collecte  fibre  pourrait  avoir  un  impact  considérable  sur  les  coûts : 
Notre analyse indique que le coût de déploiement autonome du scénario C pourrait varier entre 
75 milliards et 164 milliards d’euros. 

  Les  opérateurs  sont  en  mesure  de  partager  l'infrastructure  à  petites  cellules.  En  raison  du 
grand nombre de cellules impliquées et des contraintes découlant du coût de déploiement et de 
la localisation d’emplacements suffisants pour installer les cellules, nous avons supposé que, 
dans chaque pays, tous les opérateurs partagent un seul réseau de petites cellules. S’ils doivent 
chacun déployer leur propre ensemble de cellules, cela aurait un impact direct sur les coûts (si 

10

Pour de plus amples informations, veuillez consulter notre analyse à la Section 5.2.3. 

2006427-302 

.  

                                                      
  
Costing the new potential connectivity needs  | 27 

par  exemple  il  y  a  trois  opérateurs,  alors  le  coût  d'investissement  pour  l'infrastructure  radio 
serait  multiplié  par  trois).  Sans  partage,  le  coût  de  déploiement  autonome  du  scénario  C 
pourrait  atteindre  192 milliards  d’euros,  soit  une  augmentation  de  73  milliards  d’euros. 
Cependant, le développement d’accords de partage entre opérateurs générera ses propres défis 
opérationnels. 

  Le rayon de chaque petite cellule est d'au moins 200 mètres. En raison de la grande capacité, 
mais de la très courte portée des ondes millimétriques, nous avons supposé que le déploiement 
est  motivé  seulement  par  des  considérations  de  couverture  (c.-à-d.  que  ce  spectre  à 
extrêmement haute fréquence sera toujours en mesure de fournir une capacité suffisante). Le 
rayon  de  la  petite  cellule  peut  avoir  un  impact  important  sur  les  résultats :  si  le  rayon  était 
réduit  de  moitié  (100 m)  le  coût  de  déploiement  autonome  pour  le  scénario  C  s’élèverait  à 
236 milliards d’euros, soit une augmentation de 98%. 

Si l'une de ces hypothèses ne se matérialisait pas, le déploiement généralisé d'une couverture très 
dense de petites cellules pourrait être plus onéreux que le déploiement de la fibre à grande échelle. 
La viabilité commerciale d'un tel réseau demeure une incertitude majeure à ce stade. 

Autres considérations mises en évidence par les scénarios 

Les  trois  scénarios  axés  sur  la  fibre,  correspondant  à  la  fourniture  d’une  connectivité  filaire  à 
1 Gbit/s pour les grands DSEP, les petits DSEP et les locaux d'habitation, représentent trois points 
différents sur  le  même  continuum.  Bien  que cette  étude  se  soit  attachée à  examiner les  coûts  de 
déploiement en détail, les bénéfices socio-économiques ne faisaient pas partie du cadre de l’étude. 
Il serait peut être nécessaire d'analyser les avantages socio-économiques liés au raccordement de 
chacun  de  ces  différents  types  d'utilisateurs,  afin  d'identifier  le  scénario  fibre  représentant  le 
« meilleur rapport qualité-prix ». 

Concernant la couverture radio, notre analyse prévoit que l'évolution de la technologie des macro-
cellules permettra de fournir des services atteignant 50 Mbit/s aux zones de population de l’UE28. 
Cependant, un coût supplémentaire important devrait être engagé pour aller au-delà de ce niveau 
de service ; soit pour étendre la couverture de 50 Mbit/s à tous les grands réseaux de transport, ou 
pour  augmenter  la  vitesse  disponible  du  service  dans  les  zones  peuplées  à  1 Gbit/s.  Que  les 
opérateurs  disposent  de  ressources  financières  suffisantes  pour  réaliser  ces  déploiements 
supplémentaires reste une incertitude majeure. 

Enfin,  dans  les  scénarios  envisagés  par  la  présente  étude,  il  existe  un  choix  intéressant  pour 
connecter  les  petits  DSEP :  soit  par  l'approche  radio  à  petites  cellules  (point  d’accès)  du 
scénario C,  soit  par  l'approche  filaire  en  fibre  du  scénario  D.  Les  deux  options  engendrent  des 
coûts similaires, mais le scénario C a l'avantage d'offrir également une connectivité mobile, tandis 
que la connexion en fibre prévue dans le scénario D pourrait mieux résister à l’épreuve du temps. 
Encore  une  fois,  une  analyse  plus  approfondie  des  avantages  de  ces  deux  approches 
technologiques concernant le déploiement pourrait être bénéfique. 

2006427-302 

.  

 
Costing the new potential connectivity needs  | 28 

2  Addressing the study’s objectives 

The European Commission published the Digital Agenda for Europe (DAE) in 2010, a vision with 
ambitious broadband targets to be met by 2020. It is now considering new connectivity ambitions 
beyond  2020  and  is  seeking  a  sound  estimate  of  how  much  investment  is  required  to  meet 
hypothetical future needs. This study provides an estimate of the cost of meeting the EU’s future 
connectivity needs. 

In  this  section  we  first  summarise  the  study’s  objectives  as  defined  by  DG  CNECT,  and  then 
present our approach to addressing these objectives. Subsequent sections are laid out as follows:  

  Section 3 describes the technologies that are capable of delivering broadband access at 1Gbit/s 
or more by 2025, and discusses their performance and the economics of their deployment. 

  Section 4 provides an overview of our modelling approach and documents our assumptions. 

  Section 5 presents the results of our modelling, and discusses a number of sensitivities that we 

have also analysed. 

  Section  6  discusses  the  implications  of  the  results  for  policy  and  recommends  a  number  of 

next steps for the Commission. 

2.1  Objectives of the study 

In  defining  the  scope  for  this  study,  DG  CNECT  laid  out  three  ‘cases’  for  the  availability  of 
broadband connectivity within EU28 countries, which the study was to examine by developing a 
number of infrastructure scenarios and modelling the associated costs. In the following, we present 
the scope as specified. 

Case 1 – Gigabit connectivity for socioeconomic drivers and professionals 

Users  should  be  able  to  receive  a  target  download  speed  of  1Gbit/s,  to  be  complemented  by 
upload, latency and other parameters according to Analysys Mason’s own assumptions concerning 
the future of the industry and in line with points 1 to 3 below. On this basis, Analysys Mason was 
requested to present 3 to 5 scenarios that are based on different approaches to the definition of a 
socioeconomic driver and how it can be connected: 

1.  All the most important socioeconomic enablers are connected: universities, schools, research 
centres,  business  parks,  innovation  hubs,  hospitals,  libraries,  SMEs  employing  at  least  50 
workers. All the connections are fixed. 

2.  As in point 1. plus other SMEs and professionals/freelancers/teleworkers, who are connected 

with fixed lines. 

3.  As in point 2. but the entities mentioned are connected with mobile microcells/hotspots. 

2006427-302 

.  

Costing the new potential connectivity needs  | 29 

Case 2 – Mobile connectivity 

Analysys Mason was requested to propose target mobile connection speeds (speed limit should be 
least 30 Mbit/s, but preferably higher). Further parameters other than speed  could be included if 
deemed relevant and based on the industry analysis. At least three scenarios should be developed, 
depending on the quality of experience, speed and the size/proximity of the cell. Scenarios should 
including  machine-to-machine  (M2M) 
be  built  based  on  possible  demand  projections, 
communications. 

Coverage should be close to 100% of the population, in line with current 2G (or higher) coverage. 
Coverage  of  the  important  highways  and  railways  should  also  be  taken  into  consideration.  This 
task is concerned with mobile coverage only, taking into consideration the necessary high capacity 
connection  to  the  base  stations.  The  impact  of  spectrum  auctions  resulting  in  operators  having 
obligations to cover a certain percentage of the population should be taken into consideration. 

Case 3 – Gigabit connectivity for households 

This target should include a connection to all households using fixed technology providing 1Gbit/s 
(e.g. FTTH or DOCSIS 3.1), across three scenarios: 80%, 90% and 100% coverage. 

Timeframes 

All the targets should be considered as targets for 2025. 

2.2  Our approach to addressing the objectives 

We  have  developed  a  methodology  that  considers  all  of  the  elements  in the  three  cases  laid  out 
above, using a holistic approach. The principles of our approach are as follows: 

  The cases can be considered via a ‘menu’ of infrastructure scenarios which are incremental to 
one  another,  in  that  each  scenario  in  the  sequence  adds  additional  connectivity,  at  an 
associated additional cost, to the previous scenario. (We also consider the cost of each scenario 
on a standalone basis). 

  All of the infrastructure scenarios include a fixed wireline element, which is used to provide 
either end-user connectivity or backhaul for (some) wireless nodes. Some of the scenarios also 
include a wireless infrastructure layer, which  may rely on backhaul provided by the wireline 
layer 

  The wireline infrastructure  built in the initial scenarios  can be re-used as more scenarios  are 
added:  for  example,  the  fibre  backhaul  for  small-cell  wireless  nodes  could  be  re-used  to 
provide part of the connection between the local exchange and homes for FTTH coverage. 

  Currently  existing  infrastructure  can  also  be  re-used,  including  existing  fibre  networks  and 

telecoms (and potentially utility) duct networks. 

2006427-302 

.  

Costing the new potential connectivity needs  | 30 

Our approach only considers the access network in each Member State, and does not consider the 
backhaul or core networks. We would expect any costs incurred in the backhaul and core networks 
will  be  relatively  low  compared  to  the  investment  required  in  the  access  network.  Indeed,  the 
widespread availability of ADSL will mean that the majority of local exchanges in most Member 
States  will  already  have  fibre  links  for  their  backhaul,  and  therefore  the  upgrade  costs  to  carry 
future  increases  in  bandwidth  will  be  small  when  compared  to  the  investment  required  in  the 
access network. 

We  have  developed  six  incremental  infrastructure  scenarios,  which  together  cover  the 
requirements of all the three cases defined by the Commission. These scenarios are summarised in 
Figure  2.1  overleaf,  which  provides  details  of  the type  of  users  served,  the  associated  fixed  and 
mobile connectivity, and the expected level of re-use of infrastructure. We also provide some notes 
on the issues that need to be considered when modelling these scenarios. 

Following the summary table, schematics of each infrastructure scenario are given in Figure 2.1.  

2006427-302 

.  

Costing the new potential connectivity needs  |  31 

Figure 2.1: Summary of infrastructure scenarios [Source: Analysys Mason, 2016] 

ID 

A 

B 

C 

11

12

Name 

Network users 

Fixed connectivity 

Mobile connectivity 

Infrastructure re-use 

Large SEDPs 

  Local authority buildings 

  Large SEDPs receive 

1Gbit/s fixed uncontended 
(PTP) 

  Hospitals 

  Primary schools 

  Secondary schools 

  Universities 

  Doctor's surgeries 

  Research centres 

  Business parks 

  Airports  

  Existing commercial and 

public fibre access 
infrastructure 

Macro-cell mobile 
connectivity for 
population areas11 

  Medium enterprises (50-249) 

  Stadiums 

  Future mobile connectivity  

  Associated backhaul of the macro 

layer 

  1Gbit/s fixed, uncontended 
(PTP) connectivity required 
for backhaul 

  Mobile connectivity 

  Existing base station sites 

(speed to be checked – 
see Section 5.1.5) 

(electronics upgrade 
needed) 

Small-cell mobile 
connectivity for 
population areas 
and small SEDP 
wireless connectivity 

  Future mobile connectivity 

  Small SEDPs via wireless 

connection (see details in next 
scenario) 

  Associated backhaul of the small-

cell layer 

  Small SEDPs would receive 
1Gbit/s contended wireless 
connections via future mobile 
(see right) 

  1Gbit/s fixed uncontended 
(PTP) connectivity required 
for backhaul 

  c.1Gbit/s mobile 
connectivity12 

  Existing fibre backhaul links 

  Infrastructure sharing (at the 
passive and active layers) 
will be considered 

  Existing commercial and 

public fibre access 
infrastructure 

  Fibre laid for Scenario A 

‘Population areas’ are those areas including homes and businesses. 

1Gbit/s mobile connectivity will likely require 5G technology, with high uncertainty on spectrum availability and capacities; likely to be c.1Gbit/s due to use of very high frequency spectrum. 5G 
spectrum is due to be decided at WRC 2019. Spectrum is unlikely to be available for use until 2021. 5G estimated to be implemented in the EU during 2020-2025. 

2006427-302 

 
 
 
 
                                                      
  
  
Name 

Network users 

Fixed connectivity 

Mobile connectivity 

Infrastructure re-use 

Costing the new potential connectivity needs  | 32 

  Small SEDPs would receive 
1Gbit/s contended fibre 
connections (PON) 

  Existing commercial and 

public fibre access 
infrastructure 

  Fibre laid for Scenarios A 

and C  

ID 

D 

Small SEDPs fibre 
connectivity 

  Micro enterprises (1-9) 

  Small enterprises (10-49) 

  Post offices 

  Police stations 

  Libraries 

  Community centres 

  Home workers 

  Farmers markets 

  Museums 

  Galleries 

  Residential users 

E 

Home fibre 
connectivity 

  Homes would receive 

1Gbit/s contended fibre 
connections (PON) 

  Potentially includes 
femtocell for indoor 
coverage, though voice-
over-Wi-Fi technology 
could mean indoor 
coverage costs met by 
the end user 

  Existing commercial and 

public fibre access 
infrastructure 

  Existing DOCSIS3.1 

infrastructure, including 
know expansions 

  Fibre laid for Scenarios A, C 

and D 

  Similar to Scenario B  

  Existing transport related 

macro-sites 

  Existing fibre backhaul links 

F 

Transport 
connectivity 

  Connected cars 

  Connected trains 

  1Gbit/s fixed uncontended 
(PTP) connectivity required 
for backhaul 

2006427-302 

 
 
Costing the new potential connectivity needs  |  33 

Schematics for the access networks deployed in the six scenarios  

Figure 2.2: Scenario A: Large SEDPs – access network schematic [Source: Analysys Mason, 2016] 

Figure 2.3: Scenario B: Macro-cell connectivity for population areas – access network schematic [Source: 

Analysys Mason, 2016] 

Figure 2.4: Scenario C: Small-cell connectivity for population areas – access network schematic [Source: 

Analysys Mason, 2016] 

Figure 2.5: Scenario D: Small SEDPs  – access network schematic [Source: Analysys Mason, 2016] 

2006427-302 

Primary connection point (e.g. first splitter or major fibre junction; similar to cabinet location)Local exchangeIndividual end userSecondary connection point (e.g. second splitter or major fibre junction; similar to distribution point location)Incremental fibre for this optionOther access cables<1% of total premisesc.1000-10,000 premises coveredc.100-500 premises coveredc.5-20 premises coveredMacro sitec.500-1000 premises per siteMacro site costs mainly limited to upgrade of existing sites (assume further capacity added via small cell sites in next option)Primary connection point (e.g. first splitter or major fibre junction; similar to cabinet location)Local exchangeIndividual end userSecondary connection point (e.g. second splitter or major fibre junction; similar to distribution point location)Incremental fibre for this optionOther access cablesc.1000-10,000 premises coveredc.100-500 premises coveredc.5-20 premises coveredSmall cell sitec.10-20 premises per siteNumber of cell sites driven by cell radius (assume capacity from high freqspectrum)Primary connection point (e.g. first splitter or major fibre junction; similar to cabinet location)Local exchangeIndividual end userSecondary connection point (e.g. second splitter or major fibre junction; similar to distribution point location)Incremental fibre for this optionOther access cablesc.1000-10,000 premises coveredc.100-500 premises coveredPrimary connection point (e.g. first splitter or major fibre junction; similar to cabinet location)Local exchangeIndividual end userSecondary connection point (e.g. second splitter or major fibre junction; similar to distribution point location)Incremental fibre for this optionOther access cablesc.20% of total premisesCould also include a femtocell to ensure indoor mobile coverage in rural areasc.1000-10,000 premises coveredc.100-500 premises coveredc.5-20 premises covered 
 
 
 
 
Figure 2.6: Scenario E: Home fibre connectivity – access network schematic [Source: Analysys Mason, 2016] 

Costing the new potential connectivity needs  | 34 

Figure 2.7: Scenario F: Transport connectivity – access network schematic [Source: Analysys Mason, 2016] 

2006427-302 

.  

Primary connection point (e.g. first splitter or major fibre junction; similar to cabinet location)Local exchangeIndividual end userSecondary connection point (e.g. second splitter or major fibre junction; similar to distribution point location)Incremental fibre for this optionOther access cablesc.1000-10,000 premises coveredc.100-500 premises coveredc.5-20 premises coveredCould also include a femtocell to ensure indoor mobile coverage in rural areasConnections driven by coverage and take-up rate 
 
 
 
 
3  Technology review and modelling assumptions  

Costing the new potential connectivity needs  | 35 

This section includes a discussion of the broadband technologies that will be capable of delivering 
download speeds of at least  1Gbit/s to subscribers by 2025. We review the performance of each 
technology and the economics of deploying it. We also present the technology-related assumptions 
that we have made in our cost modelling.  

We believe that four access technologies will be capable of delivering speeds of 1Gbit/s or more 
by 2025: 

 

 

 

fibre  to  the  premises  (FTTP)  based  on  point-to-point  (PTP)  or  passive  optical  networking 
(PON) architectures 

cable (hybrid fibre-coax) systems running the latest DOCSIS13 standard 

future wireless broadband technologies 

  high-capacity satellite systems. 

High-capacity  satellite  systems  are  expected  to  continue  to  play  a  role  connecting  sites  that  are 
outside  the  footprint  of  terrestrial  networks,  or  where  there  are  specialist  user  requirements  that 
cannot be met by terrestrial networks. However, this study focuses on the technologies likely to be 
used for mass deployment, and therefore satellite is not discussed further in this report. 

For  completeness,  we  have  also  included  a  description  of  fibre  to  the  node  (FTTN),  which 
includes  fibre  to  the  cabinet  (FTTC)  and  fibre  to  the  distribution  point  (FTTdp).  These 
architectures allow the use of very-high-bandwidth technologies such as G.FAST over very short 
copper  loop  lengths.  The  technology  is  still  being  trialled  and  an  ability  to  deliver  speeds  of 
1Gbit/s  on  a  large  scale  has  not  yet  been  developed14.  However,  it  is  expected  to  be  widely 
deployed by operators, and therefore we consider it to be relevant to this study. 

We  discuss  the  key  technical  and  economic  features  of  each  technology  in  a  consistent  way, 
highlighting the factors that may affect their attractiveness and usability. For each technology we 
have produced a summary with the following elements: 

Overview 

Each  technology  is  introduced,  including  an  overview  of  its  capabilities  and 
deployment characteristics. 

Connectivity 
performance 

The  connectivity  performance 
the  expected 
improvements  due  to  standards  development  in  the  future.  The  evolution  of 
speeds  is  also  considered,  including  the  actual  speeds  received  by  end  users 
(e.g. peak vs. average speeds).  

is  discussed, 

including 

13

14

Data Over Cable Service Interface Specification. 

Over connections less than 100 metres, G.FAST can currently provide 600Mbit/s of aggregate capacity (downlink 
plus uplink). 

2006427-302 

.  

                                                      
  
  
Costing the new potential connectivity needs  | 36 

Economics of 
deployment 

We have outlined any relevant issues relating to the economics of deployment, 
including  relative  deployment  costs  and  the  factors  that  affect  the  cost  of 
deployment. 

3.1  Fibre to the premises (FTTP) 

3.1.1 Overview 

An overview of FTTP architecture is shown in Figure 3.1. 

Figure 3.1: Overview of 

FTTP architecture 

[Source: Analysys 

Mason, 2016] 

FTTP is a term used to define fibre deployments to individual premises. These ‘full’ fibre network 
architectures may be broadly divided into: 

  PTP  active  networks  (usually  Ethernet-based),  in  which  separate  fibres  run  from  the  local 

exchange to each customer. 

  PON,  which  allows  a  single  fibre  from  the  exchange  to  supply  a  passive  splitter  to  which 

multiple end users are connected by their own individual fibre. 

FTTP is regarded as a future-proof solution for high-bandwidth services, including video. Besides 
its  high  speed,  its  strengths  include  lower  maintenance  costs  than  copper  networks  and 
connectivity performance which is unaffected by distance from the exchange. 

3.1.2 Connectivity performance 

PTP 

Fibre-based  PTP  technology  is  already  able  to  provide  1Gbit/s  broadband  services  and  has  the 
potential  to  provide  up  to  100Gbit/s  (symmetrical)  broadband  services  in  the  future,  making  it 
future-proof. We expect that by 2025, PTP fibre architectures will comfortably be able to deliver 
10Gbit/s to each end user, provided each end user has a dedicated fibre connected to the exchange. 
This  architecture  provides an  uncontended  connection  in  the  access  network,  and  we  consider  it 
most  likely  to  be  required  to  connect  locations  at  which  multiple  individual  users  require 
connectivity  (e.g.  schools,  medium-sized  businesses  or  wireless  base  stations),  thus  providing  a 
natural aggregation of demand. 

2006427-302 

.  

LocalexchangeStreetcabinetFibreFibreFibreDistributionpoint 
 
 
Costing the new potential connectivity needs  | 37 

PON 

PON  technology  is  based  on  the  sharing  of  capacity  between  multiple  end  users.  The  current 
standard  (GPON15)    allows  2.5Gbit/s  to  be  shared  on  a  frequent  basis  between  64  users,  which 
gives  a  download  speed  in  the  10–100Mbit/s  range,  depending  on  the  activity  of  other  users. 
Future variants of the technology have the potential to offer much higher capacities, and PON has 
a  strong  evolutionary  path through  the  use  of  new  variants  of  the  PON  specifications.  Although 
bandwidth is often shared by up to 64 users (or maybe more), these potential improvements make 
the technology quite future-proof.  

The expected evolutionary path of PON has recently been revised. Previously, WDM16 PON was 
previously being considered for residential use, and would have allowed each end user to receive a 
dedicated  wavelength.  However,  this  has  been  discounted  by  the  FSAN  standards  organisation17 
for  large-scale  (i.e.  residential)  use  due  to the  high  costs  involved.18  Accordingly,  at  present the 
evolutionary path for PON is expected to be: 

  GPON: 2.5Gbit/s of total shared download capacity 

  Medium-term  upgrades,  referred  to  as  next-generation  PON  or  NG-PON1:  10Gbit/s  total 

shared download capacity 

  Longer-term upgrades, referred to as NG-PON2 (also known as TWDM19 PON): 4 × 10Gbit/s 

of total shared download capacity.20 

With a TWDM PON access architecture, and assuming a 64-way split, each user could receive a 
minimum  of  625Mbit/s,  with  peak  speeds  well  above  1Gbit/s.  This  variation  between  peak  and 
guaranteed speed is due to the shared nature of the connection that PON provides, and therefore 
we consider PON most likely to be used to connect locations at which a small number of end users 
require connectivity (e.g. home workers, small businesses and residential users). 

3.1.3 Economics of deployment 

Cost of passive assets 

The cost of deploying FTTP is higher than for FTTC due to the need to lay much more fibre, and 
the fact that the final connection into the premises is frequently not ducted in the copper networks 
that are being replaced by fibre. The cost per user is lower for multi-tenanted premises (providing 

15

The ITU-T’s G.984 Gigabit-capable Passive Optical Networks (GPON) standard. 

16

   WDM = Wavelength Division Multiplexing. 

17

FSAN = Full Service Access Network group; see https://www.fsan.org/ 

18

   WDM PON requires the existing PON splitters to be upgraded to wavelength multiplexors and more expensive 
lasers in the active electronics, which would affect the cost of customer premises equipment in particular. 

19

20

TWDM = Time Wavelength Division Multiplexing. 

TWDM PON uses only four wavelengths on the PON (compared to 64 for WDM PON if there were 64 users). These 
wavelengths are used to increase the total capacity of the PON but are shared by all users, and can be applied as 
an overlay to existing GPON or NG-PON1 services. Crucially, TWDM PON can be deployed without needing to 
upgrade the splitter deployed out in the field. 

2006427-302 

.  

                                                      
  
  
  
  
Costing the new potential connectivity needs  | 38 

there  is  an  adequate  internal  distribution  network)  and  can  also  be  reduced  through  the  use  of 
aerial fibre and self-installation techniques. 

In its 2013 study for the Commission,21 Analysys Mason estimated the cost of deploying new duct 
for  FTTP  by  taking  a  reference  cost of  duct deployment  for the  UK,  and  then  adjusting  this for 
other Member States based on the relative labour rates in each country. For the present study, we 
have  updated  the  relative  labour  rates  and  the  base  cost  for  the  UK,  based  on  inflation.  A 
comparison  of  the  assumed  duct  deployment  costs  between  this  study  and  the  previous  study  is 
shown in Figure 3.2 (for selected countries only). 

Figure 3.2: Duct deployment costs per metre for selected countries (EUR per metre)  

[Source: Analysys Mason, 2016] 
Country 
Belgium 
France 
Germany 
Italy 
Poland 
Romania 
Slovenia 
Spain 
Sweden 
UK 

Cost of active equipment 

Previous study 
127 
111 
97 
87 
23 
14 
47 
67 
126 
65 

Current study 
108 
96 
87 
79 
23 
13 
43 
59 
104 
62 

Our  monitoring  of  the  evolution  of  the  cost  of  PON  equipment  shows  that  every  five  year,  the 
active  components  can  be  upgraded  with  four  times  the  capacity  but  at  the  same  cost  as  the 
previous  generation.  This  is  broadly  in  line  with the current  trend  in  bandwidth  capacity,  which 
quadruples every five years (CAGR 30%). The unit cost assumptions for active equipment for the 
fibre deployments is shown in  

Figure 3.3: Unit cost assumptions for fibre active electronics [Source: Analysys Mason, 2016] 

Technology 

Unit cost (EUR) 

Notes 

PON 

17,765   Cost per OLT at each generation of technology; each supporting 8 

fibres with up to 64 users on each (512 users) 

PtP at 1Gbit/s 

4,788   Cost per Ethernet switch supporting 48 users 

21

See footnote 1. 

2006427-302 

.  

 
                                                      
  
Costing the new potential connectivity needs  | 39 

3.2  Cable 

3.2.1 Overview 

An overview of cable (hybrid fibre coax, or HFC) architecture is shown in Figure 3.4.  

Figure 3.4: Overview of 

cable (HFC) 

architecture [Source: 

Analysys Mason, 2016] 

Cable infrastructure provides broadband services using a standard known as DOCSIS, which was 
developed  by  CableLabs. The  ITU-T  has  approved  various  versions  of  DOCSIS  as international 
standards.  Modern  cable  networks  are  based  on  an  HFC  architecture,  with  the  premises  on  a 
coaxial  bus  which  may  incorporate  line  amplifiers  to  maintain  adequate  signal  levels  along  its 
length. 

The depth to which fibre penetrates the cable network varies between operators, but for high-speed 
broadband each coaxial tree will typically pass 500–2000 homes (only a minority of which may 
subscribe), located within around 500m of the optical node which forms the interface between the 
fibre  and  coaxial  media.  Cable  operators  can  typically  increase  the  depth  of  fibre  penetration  at 
relatively  low  cost  if  take-up  of  high-speed  broadband  services  is  leading  to  congestion  on  the 
coaxial portion of the network. 

As with FTTC and FTTP, the deployment of cable-based broadband is driven by the desire to offer 
triple-play services. 

Cable service is not currently available in Greece or Italy. 

3.2.2 Connectivity performance 

Many  cable  operators  already  offer  more  than  100Mbit/s  (downlink)  broadband  services  using 
DOCSIS3.0,  and  the  bonding  of  additional  channels  is  able  to  push  this  capacity  towards 
500Mbit/s.  The  introduction  of  DOCSIS3.1  will  provide  downlink  speeds  of  up  to  10Gbit/s  per 

2006427-302 

.  

Distribution nodeHead endDistribution nodeFibreFibre transport ringDistribution nodeOptical node(typically 500–2000homes served)CoaxTrunk amplifierLine amplifierLine amplifier 
 
Costing the new potential connectivity needs  | 40 

segment  for  all  cable  services,  a  significant  proportion  of  which  is  likely  to  be  available  for 
broadband. 

The options for upgrading HFC networks fall into three categories, namely technology, spectrum 
and the network, as summarised in Figure 3.5. 

Figure 3.5: Summary of upgrade options available to HFC operators [Source: Analysys Mason for Ofcom, 201422] 

It should be noted that each segment of the network typically serves hundreds of households, so a 
number  of  users  are  likely  to  be  sharing  the  same  bandwidth.  The  introduction  of  DOCSIS3.1 
technology (which provides more bandwidth) and other measures such as reducing the number of 
homes per segment by adding additional optical nodes (‘node splitting’), moving the cable modem 

22

Source: http://stakeholders.ofcom.org.uk/binaries/research/technology-research/2014/cable-sfbb.pdf 

2006427-302 

.  

▪Upgrade CMTS equipment▪Upgrade CM▪Upgrade head-end equipment▪Upgrade STB(if not caught in MPEG-4 upgrade)DOCSIS 3.0▪Upgrade CMTS▪Upgrade CM▪Replace amplifiers▪Upgrade CMTS and CM▪Replace access network items (such as taps)▪Re-plan amplifier separation (unless addressed in N+0)▪Costs of moving subs to digital TV▪Upgrade head-end equipment▪Upgrade/expand CMTS equipment▪Upgrade CM▪Adjust diplex filtersIncrease channel bondingExtend spectrum (862MHz)Extend spectrum (1794MHz)OFDM to SC-QAM bondingReallocate existing spectrum Switched digital videoAnalogue switch-offExtend spectrum (1214MHz)Add OFDM channelsOFDM-to-OFDM bondingDOCSIS 3.1TechnologyNetworkSpectrum▪Remove amplifiers▪Replace coaxial cable with fibre▪Install D-CMTS or M-CMTS EQAM) at fibre nodes▪Upgrade head-end equipment▪Add optical nodes (node splitting)▪Expand CMTS (further ports)Reducing homes per nodeMove to distributed networkDeep fibre (N+0) architecture▪Upgrade CMTS equipment▪Upgrade CM▪Upgrade head-end equipment▪Upgrade STB (selected)Implement DOCSIS 3.1 MACUpgrade PHY to DOCSIS 3.1Move to MPEG-4 / HVECMove to DVB-C2Increasing cost, improved service (speed / capacity / quality)▪Supporting requirementsKey:Options for cable capability upgrades Now / short termNow /short termShort to medium termMedium termMedium termLong termShort to medium termLong termVariable (depending on network situation) 
                                                      
  
Costing the new potential connectivity needs  | 41 

termination system to all optical nodes and the further extension of fibre closer to users could all 
be expected to increase the bandwidth and hence the speed per end user. 

There is a clear evolutionary path for HFC to provide increased speeds, and therefore it is future-
proofed. We expect that by 2025, cable networks will be able to deliver peak speeds of 10Gbit/s. 
Similar to a PON network, the shared nature of the connection in the access network will create a 
variation between this peak speed and guaranteed speed provided to each end user.  

3.2.3 Economics of deployment 

The cost of upgrading an existing digital cable network footprint to higher DOCSIS standards is 
relatively low since the amount of fibre involved is typically similar to, or less than the amount of, 
fibre required for FTTC, while the cabinet electronics are less expensive on a per-subscriber basis 
because the cost is shared between all of the users on the bus. Nevertheless, the cable operator will 
have to overcome challenges across each of the three upgrade areas: technology, spectrum and the 
network. 

The cost of expanding the coverage of cable networks is, however, high since it typically requires 
new  ducts  to  be  installed.  In  countries  that  already  have  high  cable  coverage  we  would  expect 
cable to be laid to new housing developments. In countries with low or medium cable coverage, 
there  may  be  limited  expansion  to  peripheral  areas,  but  expansion  to  near-universal  coverage 
seems unlikely. In the countries that have no cable networks at present, we think it highly unlikely 
that cable networks will be installed. 

3.3  Fibre to the node (FTTN) 

3.3.1 Overview 

An overview of FTTN architectures is shown in Figure 3.6.  

Figure 3.6: Overview of 

FTTN architectures 

[Source: Analysys 

Mason, 2016] 

FTTN refers to fibre deployments to a street cabinet or distribution point with short copper sub-
loops for the final drop to the subscribers’ premises; these final connections usually run a variant 

2006427-302 

.  

LocalexchangeStreetcabinetFibreFibreCopperDistributionpointLocalexchangeStreetcabinetFibreCopperCopperDistributionpointFibre to the cabinet(FTTC)Fibre to the distribution point (FTTdp) 
Costing the new potential connectivity needs  | 42 

of DSL technology such as VDSL.23 FTTC combined with VDSL2 is being deployed widely, and 
offers  significantly  higher  maximum  speeds  than  ADSL2+  over  short  distances  (up  to  around 
1000m), and equivalent performance over distances in excess of around 1500m. In practice, most 
commercial  FTTC/VDSL  deployments  are  aiming  for  maximum  length  of  around  500m  for  the 
copper  sub-loops,  which  means  that  the  vast  majority  of  end  users  can  benefit  from  next-
generation broadband speeds. 

A further development of FTTC is fibre to the distribution point, or FTTdp. This pushes fibre even 
closer  to  the  end  user  and  allows  the  use  of  G.FAST,  a  DSL  technology  offering  even  higher 
bandwidths  over  short  sub-loops.  G.FAST  can  also  be  deployed  in  cabinets  that  are  close  to 
customers’ premises. 

3.3.2 Connectivity performance 

The speed of broadband connectivity provided over copper networks is limited by the length of the 
copper  line.  This  means  that  in  an  area  covered  by  FTTN,  there  will  be  a  (potentially  wide) 
variation in the speeds received by users. In recent years, operators have reduced the length of the 
copper  line  by  installing  FTTC  and  operating  VDSL  over  the  shorter  copper  line.  Operators  are 
further  upgrading  the  capabilities  of  FTTC/VDSL  networks  by  using  a  noise  cancellation 
technique known as vectoring. 

Beyond vectoring, there are further options for increasing the speed available over copper access 
lines.  One  is  to  deploy  G.FAST  technology  (discussed  above),  while  another  is  the  use  of 
additional  bonded  pairs  (either  in  straightforward  combination  of  the  separate  pairs  or  using 
‘phantom  mode’).24  The  use  of  additional  pairs  is  difficult  in  many  countries  due  to  a  lack  of 
existing spare pairs in the copper network and the additional operational complexity that such an 
approach introduces. The deployment of G.FAST is therefore attracting interest among incumbent 
operators, with combined upstream and downstream speeds of 600Mbit/s being quoted. However, 
these speeds are likely only achievable if fibre can be brought to within 100m of the end user.  

While copper-based technologies are not currently suitable for providing 1Gbit/s connectivity, we 
consider  FTTN  relevant  to  the  present  study  because  (a)  research  and  development  activity  is 
continuously  pushing  the  capability  of  copper-based  technology;  and  (b)  the  fibre  deployed  by 
commercial operators to support FTTN could be re-used for providing ‘full’ fibre connections, and 
should be considered when calculating the total cost for each connectivity option. 

3.3.3 Economics of deployment 

FTTN can be much less expensive to deploy than FTTP if equipment is installed at the cabinet, but 
costs increases when equipment is deployed closer to the customer, e.g. at the  distribution point. 

23

VDSL = Very-high-bit-rate DSL. 

24

   When two pairs are bonded there are two signal wires and two ground wires, whereas in phantom mode there is 

one ground wire and three signal wires, which provides additional capacity. 

2006427-302 

.  

                                                      
  
Costing the new potential connectivity needs  | 43 

It should also be noted that the economics of sub-loop unbundling at the cabinet are considerably 
less attractive than for local loop unbundling (LLU) at the exchange: the distribution of lines per 
cabinet  can  be  much  flatter  than  the  distribution  of  lines  per  exchange,  and  therefore  an 
unbundling  operator  is  no  longer  able  to  address  a  large  proportion  of  the  population  with  a 
relatively small number of unbundling locations. 

3.4  Future wireless broadband technologies 

3.4.1 Overview 

An overview of a future wireless architecture is shown in Figure 3.7.  

Figure 3.7: Overview of future wireless architecture [Source: 5GPP (Vision document)25 and European 

Commission, 2016] 

In this study we are considering the evolution of 4G and introduction of 5G networks together as 
being  representative  of  how  mobile  networks  will  evolve  to  provide  faster  speeds,  greater 
availability and connectivity. In practice, until the detailed standards for 5G are defined, it is not 
possible to define more precisely what the capabilities of 5G networks will be.  

This  technology  evolution  is  considered  along  with  the  evolving  nature  of  key  infrastructure 
elements:  macro  cells  and  small  cells.  A  summary  of  the  expected  evolution  is  shown  in  
Figure 3.8.  

25

Full document available at: https://5g-ppp.eu/wp-content/uploads/2015/02/5G-Vision-Brochure-v1.pdf. 

2006427-302 

.  

 
                                                      
  
Figure 3.8: Summary of future wireless evolution [Source: Analysys Mason, 2016] 

Costing the new potential connectivity needs  | 44 

Overall,  we  expect  a  gradual  evolution  of  deployment  from  4G  to  5G,  with  an  accompanying 
evolution of the role of different network elements (macro cells vs. small cells), spectrum needs 
and  the  associated  speeds  delivered  to  users.  In  the  following  sections  we  provide  more 
commentary on the characteristics of 4G and 5G technologies. 

4G wireless networks 

Long term evolution (LTE) represents the current version of the GSM family of mobile technology 
standards from the UMTS standards body, 3GPP. LTE represents a shift from the wideband code 
division multiple access (WCDMA) technology used in UMTS and HSPA networks to a downlink 
based on orthogonal frequency division multiple access (OFDMA) and an uplink based on single 
carrier  frequency  division  multiple  access  (SC-FDMA).  It  is  an  all-Internet  protocol  (all-IP) 
technology  in  both  the  core  and  access  sub-networks  and  offers  significant  performance 
improvements compared with legacy networks. 

The designation LTE refers to Release 8 and Release 9 of the 3GPP standards, which are already 
implemented  in  commercial  networks,  while  LTE-Advanced  (LTE-A)  refers  to  Release  10  and 
beyond,  which  is  currently  being  rolled  out  by  many  operators  worldwide.  The  reason  for  the 
change in designation is that Release 10 meets the requirements set by ITU-R for IMT-Advanced, 
while Release 8 and Release 9 do not. 

A large number of spectrum bands have been specified for LTE use, but in the short to medium 
term  in  Europe  the  technology  is  predominantly  being  deployed  in  the  800MHz,  1800MHz  and 
2.6GHz bands. The 800MHz band is ideal for both rural LTE deployments and providing indoor 

2006427-302 

.  

202020252015Role of macro cellsRole of small cellsGeneration4G4.5G5GSpectrumPeak speedsAverage speedsCoverage and primary capacity layerWide area coverage, small cell backhaul and controlSelective capacity increase in dense areasPrimary capacity layer via high frequency spectrumSub-6GHz, especially around 1-3GHzWide range from c.700Mhz to c.90GHz300Mbit/s1-3Gbit/s10Gbit/sMinimum speeds4-25Mbit/s32-200Mbit/s1Gbit/s2-5Mbit/s50Mbit/s10-20Mbit/s 
Costing the new potential connectivity needs  | 45 

coverage in dense urban areas because of its superior propagation characteristics, compared to the 
higher  bands.  The  higher  bands,  by  contrast,  offer  better  capacity  by  virtue  of  the  increased 
bandwidth that is available, and so provide the bandwidth necessary for operators to increase the 
peak  download  speeds  from  their  networks  towards  the  upper  end  of  the  speeds  shown  in  
Figure 3.8 above. 

Because  of  the  change  in  access  technology,  considerable  investment  has  been  made  by  mobile 
operators to upgrade UMTS or HSPA networks to LTE. Some further investment in hardware and 
software is required to achieve the full benefits of LTE-A, over initial LTE services. 

The continued growth in use of mobile data services and strong competition in the 4G market has 
resulted  in  a  rapid  acceleration  from  LTE  to  LTE-A,  such  that  most  operators  in  Europe  are 
already  deploying  carrier-aggregated  LTE-A  services  (and  initial  Release  8/9  LTE  networks  are 
already becoming obsolete). Hence, despite the associated costs, it is apparent that operators value 
the benefits of LTE-A in terms of being able to offer higher peak speeds. LTE-A typically involves 
upgrading networks to enable carrier aggregation (CA) to occur between either contiguous or non-
contiguous carriers, which is feasible for most network operators, providing they have sufficient 
spectrum available. Operators are marketing these high-speed LTE-A services by using terms like 
4G+, 4G++, 4.5G, or double speed, evoking notions of speed and advanced technology. 

5G wireless networks 

The standard for 5G mobile technologies has not been defined yet, but there is strong debate and 
discussion in the industry on what the specifications should be. Technology trials are focusing on 
using advanced antenna techniques to increase downlink capacity and speeds, and using extremely 
high  frequency  ‘mm-wave’  spectrum  bands,26  much  higher  than  those  currently  used  by  mobile 
services, in order to ensure that wide contiguous channels are available.  However, it is clear that 
the  spectrum  needs for 5G  will extend  beyond  mm-wave,  and  a  range  of  other  frequency  bands 
(both  existing  mobile  bands,  and  possibly  new  ones)  will  be  needed  to  provide  the  necessary 
coverage and reach for 5G networks, as is the case for 3G/4G today. 

There are a number of goals for 5G that go far beyond improved download speed27. These include: 

  more capacity 
 
lower latency 
  more mobility (i.e. connectivity on transport routes and at high speed) 
  more accuracy of terminal location 
 

increased reliability and availability. 

5G  networks  are  being  proposed  to  provide  very  high  peak  downlink  speeds  in  ultra-dense 
environments,  but  also  to  provide  mobile  broadband  services  to  a  range  of  vertical  network 
industries  including  automotive,  energy,  food  and  agriculture,  city  management,  government, 

26

27

These bands fall in the range of so-called millimetre-wave frequencies – see page 51 below. 

5G PPP (Heidelberg, Germany, 2015). The 5G Infrastructure Public Private Partnership: the next generation of 
communication networks and services. Available at http://5g-ppp.eu/wp-content/uploads/2015/02/5G-Vision-
Brochure-v1.pdf. 

2006427-302 

.  

                                                      
  
  
Costing the new potential connectivity needs  | 46 

healthcare, manufacturing and public transport. These vertical industries do not necessarily require 
the highest peak downlink speeds to meet their requirements, but will require networks to provide 
sufficiency capacity, reliability and availability to meet robust performance requirements.  

We expect that any 5G network deployment will happen after 202028 with commercial availability 
between 2020 and 2025. 

3.4.2 Connectivity performance 

4G wireless networks 

LTE-A can provide 300Mbit/s (downlink) broadband services, depending on the category of user 
equipment  and  the  amount  of  spectrum  used.  LTE  has  a  strong  evolution  path  supported  by  all 
industry players, as it has been or is being adopted by the largest wireless network operators. The 
technology  roadmap  for  LTE  is  shown  in  Figure  3.9;  this  is  focused  on  increasing  the  carrier 
bandwidth and the use of multiple antenna arrays (MIMO) to increase speeds.  

28

http://www.analysysmason.com/About-Us/News/Newsletter/5G-spectrum-Oct2014/#13%20October%202014 

2006427-302 

.  

 
                                                      
  
Figure 3.9: Roadmap for LTE technology [Source: Analysys Mason, 2016]  

Costing the new potential connectivity needs  |  47 

2006427-302 

202020352005201020202025Rel.8 –LTE (20MHz bandwidth with 4x4MIMO and 64-QAM)Rel.9 –LTE (20MHz bandwidth with 2x2MIMO and 64-QAM, SAE)Rel.10 –LTE-A (intra-band carrier aggregation, 20MHz bandwidth with 4x4MIMO and 64-QAM)Rel.11 –LTE-A (same as Rel.10, advanced IP interconnection)2015Rel.12 –LTE-A (same as Rel.11 and 64-QAM, enhanced IMS)150                                     300                    3000                 4000     ~ 5000Rel.8 –LTE (20MHz bandwidth with 2x2MIMO and 64-QAM)Rel.9 –LTE (20MHz bandwidth with 4x4MIMO and 64-QAM, SAE)Rel.10 –LTE-A (40MHz bandwidth with 8x8 MIMO and 64-QAM)Rel.10 –LTE-A (100MHz bandwidth with 8x8 MIMO and 64-QAM)2–12                                   4–25                  32-200             42-270        ~ 53-333Time of standards ratificationRepresents peak downlink speed per sector (Mbit/s)Represents range of average user downlink speed (Mbit/s)Rel.13 –LTE-A (unlicensed bands, enhanced M2M comms, elevation beamforming / full-dimension MIMO)Rel.14 –LTE-A (Multimedia Broadcast Supplement, enhanced user location, multiple access point names)Actual/forecasted commercial roll-out 
 
Costing the new potential connectivity needs  |  48 

5G wireless networks 

There are a large number of use cases being considered for 5G, but there are three main aspects of 
service that we may note here:29 

  Continuous user experience: users  will be able to access the network anywhere (urban/rural, 
indoors/outdoors, stationary in-motion), and the 5G system will select the best access method 
from a range of different technologies (e.g. 4G, Wi-Fi, new technologies). 

 

Internet of Things: 5G will provide a platform to connect a massive number of objects to the 
Internet. 

  Mission-critical services: public safety services (which were previously operated on separate 
networks) can be carried on 5G due to the high performance available. Vehicle-to-vehicle and 
vehicle-to-road services will also be possible. 

5G technology is being developed to meet a stringent set of quantitative technical capabilities, as 
shown in Figure 3.10. 

Figure 3.10: Summary of 5G target technical capabilities [Source: 5GPP and European Commission, 2016] 

Capability 

Peak data rate 

Guaranteed data rate 

Mobility 

Number of devices 

Energy efficiency 

Service deployment time 

Reliability 

E2E latency 

Mobile data volume 

Accuracy of outdoor terminal location 

Target value 

10Gbit/s 

50Mbit/s 

500km/h 
1million/km2 

10% of current consumption 

90 minutes 

99.999% 

5ms  
10Tbit/s/km2 

1m 

A  number  of  the  capabilities  shown  are  not  necessary  for  us  to  consider  further  in  the  present 
study. However, the data rate targets for 5G are directly relevant; these are subject to certain cell 
spectrum and size requirements, as discussed below. 

29

5G PPP (Heidelberg, Germany, 2015). The 5G Infrastructure Public Private Partnership: the next generation of 
communication networks and services. Available at http://5g-ppp.eu/wp-content/uploads/2015/02/5G-Vision-
Brochure-v1.pdf 

2006427-302 

.  

 
                                                      
  
Costing the new potential connectivity needs  | 49 

3.4.3 Economics of deployment 

Macro-cell equipment costs 

Macro cells will continue to be an important element of future wireless networks, to provide wide 
area  coverage  and  to  provide  a  supporting  layer  for  small  cells,  for  control  and  backhaul. 
A summary of the parameters affecting the economics of macro-cell deployment is shown below. 

Figure 3.11: Summary of parameters affecting the economics of macro-cell deployment through to 2025 

[Source: Analysys Mason, 2016] 

Parameter 

Cell radius 

Value 

4.0km 

Comment 

Average value across a country; only affects coverage-limited 
cells in the model 

Taken from previous study, and assumes sub-1Ghz spectrum is 
used for coverage 

Cell capacity 

425Mbit/s per 
sector average 
throughput  
(3 sectors) 

Based on the 1Gbit/s peak speeds being discussed for LTE-A 
Pro30 
We estimate that average throughput will be around 35-50% of 
peak speeds based on analysis of current technologies. 

Base station 
electronics 
upgrade costs 

EUR20 000 per 
site for interim 
upgrade 

EUR40 000 per 
site for full 
upgrade 

Note: we assume that 5G-type peak speeds beyond 1Gbit/s 
(e.g. 10Gbit/s) will require small cells and large amounts of 
higher frequency spectrum 

Note: excludes passive infrastructure 

Includes fully installed/commissioned cost for base station 
electronics and antenna upgrade to existing sites 

We assume that two upgrades will be required: one between 
now and c.2020, and one between c.2020 and c.2025: 

  The first (interim) upgrade will include increased processing 

power and support for additional spectrum bands 

  The second (full) upgrade will include a full hardware refresh 

Cost is in 2016 terms 

We assume that each upgrade costs a similar amount, We 
assume that the upgrades increase capacity/functionality 
towards the 2025 5G requirements (mobile broadband, machine 
to machine (e.g. LPWA) and mission-critical applications) 

Small-cell equipment costs 

A development that is critical to estimating the access network cost of future connectivity is the 
increased prevalence of small cells, leading to ultra-dense networks (UDNs). The very high data 
and  bandwidth  requirements  of  5G  will  require  large  amounts  of  contiguous  spectrum.  This 
requirement will push 5G to use increasing amounts of spectrum at higher frequencies to that used 
by mobile networks today, including in the 24–86GHz range. This lies in the range often referred 

30

Peak speeds of 1Gbit/s have been demonstrated using aggregation of multiple carriers, see: 
http://www.lightreading.com/mobile/4g-lte/lte-advanced-pro-gigabit-4g-anyone/a/d-id/721036 

2006427-302 

.  

                                                      
  
Costing the new potential connectivity needs  | 50 

to as millimetre wave  (mm-wave) spectrum,31 and will be used in addition to spectrum at lower 
frequencies (including both licensed and unlicensed spectrum bands). 

High-frequency spectrum is characterised by a high capacity for data transfer but a low ability to 
penetrate  the  atmosphere  and  physical  objects  (such  as  the  walls  of  buildings).  This  leads  to  a 
lower range than lower-frequency spectrum, which has the drawback that cell size is reduced, but 
the benefit that frequency re-use can be increased. 

Small cells are already being deployed for 4G services to increase the capacity of networks. The 
higher  data  demands  being  designed  for  on  5G  and  the  use  of  much  higher  frequency  spectrum 
will see small cells become much more prevalent for 5G services. The key parameters for future 
wireless small cells are presented in Figure 3.12. 

Figure 3.12: Summary of parameters affecting small-cell deployment economics through to 2025 [Source: 

Analysys Mason, 2016] 

Parameter 

Value 

Comment 

Cell radius 

200m 

Estimated value appropriate for mm-wave spectrum associated with 
5G services 

Cell 
capacity 

Very high 
(coverage 
limited only) 

For modelling purposes, we assume that the small-cell deployment will 
be limited by coverage (as use of mm-wave spectrum gives very high 
capacity) 

Base station 
costs 

EUR1000 per 
site 

Note: excludes passive infrastructure 

Includes fully installed/commissioned cost for base station electronics 
upgrade to existing sites 

Cost is in 2016 terms; we assume that each upgrade costs a similar 
amount, but increases capacity/functionality towards the 2025 5G 
requirements (mobile broadband, machine to machine (e.g. LPWA) 
and mission-critical applications). 

Cost also includes option for wireless ‘front haul’ on some base 
stations 

Backhaul costs 

Backhaul will be a key consideration. Ideally, a fibre connection will be provided to each small 
cell, but where this is not possible, a wireless fronthaul solution may be used. We test the impact 
of different proportions of cells using wireless fronthaul in a sensitivity analysis in Section 5.2.3. 

Spectrum costs 

Spectrum costs are not considered within the scope of this study. 

31

Technically, mm-Wave frequencies extend from 30GHz to 300GHz, though 5G will not utilise the full range. 

2006427-302 

.  

 
                                                      
  
Costing the new potential connectivity needs  | 51 

4  Modelling approach and other assumptions 

In this section we first describe how we have updated the model framework that Analysys Mason 
developed  for  a  previous  study  for  the  EC,  Study  on  the  socio-economic  impact  of  bandwidth, 
published  in  March  2013.32  We  then  describe  the  major  assumptions  we  have  made  in  our 
modelling which are common to all technologies; this supplements the discussion of technology-
specific assumptions in the previous section.   

4.1  Modelling approach 

The  existing  Analysys  Mason  model  framework  was  developed  to  consider  the  socio-economic 
impact  of  bandwidth.  The  framework  integrates  all  aspects  of  NGA  network  deployment  and 
commercial viability. The framework is highly flexible, and is based around a core model module 
that considers the deployment costs and viability for a specific technology in a specific country at 
a specific population density. The model framework is summarised in Figure 4.1. 

Figure 4.1: Summary of existing model framework [Source: Analysys Mason, 2013] 

32

Available at: https://ec.europa.eu/digital-single-market/en/news/study-socio-economic-impact-bandwidth-smart-
20100033 

2006427-302 

.  

Penetration forecast by speed-by technology-by countryIndividual subscriber demand forecastsExtrapolatepenetration historyARPUforecasts-by country-wholesale vsretail-by technologyAMresearch data on consumer spendMarketshare/ concentration-by countryTechnologyunit-cost base-capex, opex-by technology-by countryCost datafrom AMproject experienceCountry level cost adjustmentsRevenuefor given pop densityNetworkcost for given pop densityCapexOpexCapexMin.economic pop. density (NPV=0)-by technology-by country-by technology-by countryCoverage history and forecasts-starting point = current-by technology-by country-by technology-by countrySpeed availability forecasts-by technology-by countryExpected speed evolution-by technologyResidential, Business, Public Sector-by technology-by countryTotal deploymentcostPopulation density curves-by country-by technology mix (assuming parallel deployment)-by country...to total socio-economic impact calculation-by technology-by demand scenario-by technology-by technology-by technology-by technology-by countryCore model: deployment business case by population densityFinancial assumptionsCommercialcoverageforecast-by technology-by countryResidential (busy hour)Local-areatake-up of broadband-by country 
                                                      
  
Costing the new potential connectivity needs  | 52 

The technology-specific modules work on the following principles: 

Wireline 
technologies 

Wireless 
technologies 

Wireline network calculations convert user density and area into line length 
based  on  the  number  of  users  per  network  node.  At  high  densities,  the 
calculations create short line lengths, while at low densities the calculations 
create longer line lengths. 

Wireless network calculations are based on the number of users covered by 
a  single  base  station  at  a  particular  density.  In  dense  (urban)  areas,  the 
network is limited by the finite capacity of the base station. In sparse (rural) 
areas, the network is limited by the finite coverage of the base station.  

For  coverage  of  transport  links  (e.g.  in  Scenario  F),  we  consider  how  the 
diameter of a cell will cover a certain length of road or railway. 

The  model  framework  is  able  to  produce  results  at  granular  increments  of  population  density, 
which will provide the Commission with a large amount of flexibility in terms of the definition of 
urban  and  rural  areas  in  each  Member  State.  Also,  because  the  core  of  the  model  considers  the 
overall business case, and not just the cost, it can determine the extent of commercially viable roll-
out of networks. 

In the following subsections, we discuss the assumptions required to apply the model framework 
to the issues being considered by the present study, namely: 

 
 
 

the location of different types of users 
the passive network elements required to reach those users 
the  active  elements  (i.e.  electronics)  required  to  deliver  the  required  speed  and  quality  of 
services. 

4.2  Modelling assumptions common to all technologies  

As noted above, many of the assumptions regarding the costs and capabilities of the technologies 
being  modelled  have  already  been  discussed  in  Section  3;  this  section  concentrates  on the  other 
major assumptions in our modelling. 

4.2.1 Population distribution data 

We  have  updated  our  population  distribution  data  from  the  previous  study  and  have  used  the 
highly granular NUTS5 (Local Administrative Unit Level 2) data made available from Eurostat.33 
This allows us to map how the population is distributed with across each of the EU28 countries. It 
should  be  noted  that  the  data  made  available  for  Denmark,  Ireland  and  the  UK  appeared  to  be 
incomplete, and therefore we have used the data from the previous study.  

33

Source:: http://ec.europa.eu/eurostat/web/nuts/local-administrative-units 

2006427-302 

.  

                                                      
 
Costing the new potential connectivity needs  | 53 

4.2.2 Numbers of SEDPs 

We have used a range of data sources and assumptions to estimate the number of SEDPs in each 
country; these are listed in Figure 4.2 (for Scenario A) and Figure 4.3 (Scenario D).  

Figure 4.2: Sources for the number of large SEDPs for Scenario A [Source: Analysys Mason, 2016] 

User type 

Data source 

Medium 
enterprises 

Eurostat, Number of enterprises, From 50 to 249 persons employed 

Each enterprise is multiplied by an assumed number of sites per enterprise. Data for 
each country was derived from data gathered by Analysys Mason research. Data for 
the following countries was not available for the following countries: 

  Finland, Germany, Luxembourg and Malta used the average of other Western 

European countries 

  Croatia, Cyprus and Greece used the average of other Eastern European countries 

Hospitals 

OECD (hospitals) and Eurostat (beds) 

Numbers for some countries estimated from average beds per hospital: Bulgaria, 
Croatia, Cyprus, Denmark, Malta, Romania, Sweden, UK. The average beds per 
hospital was taken from all other countries for which the number of hospitals is 
available from OECD. 

OECD defines hospitals as follows: Hospitals (HP .1) comprise licensed 
establishments primarily engaged in providing medical, diagnostic and treatment 
services that include physician, nursing, and other health services to inpatients and 
the specialised accommodation services required by inpatients. Hospitals provide 
inpatient health services, many of which can be delivered only by using specialised 
facilities and professional knowledge as well as advanced medical technology and 
equipment, which form a significant and integral part of the provision process. 
Although the principal activity is the provision of inpatient medical care they may also 
provide day care, outpatient and home health care services as secondary activities. 
The tasks of hospitals may vary by country and are usually defined by legal 
requirements. In some countries, health care facilities need in addition a minimum size 
(such as number of beds and medical staff to guarantee 24-hour  access) in order to 
be registered as a hospital (see A System of Health Accounts, 2011 Edition). 

Data on the number of local authority buildings was identified for France, Italy, Spain 
and the UK. The data for all other countries was estimated by scaling the data from 
these four countries in proportion to the number of NUTS5 areas. 

Data available for most countries from UNESCO. Data for Belgium and Portugal was 
not available or incomplete. The number of schools for these countries is estimated 
from the number of pupils, which is available from Eurostat, taking the average 
number of pupils per school from all other countries for which the actual number of 
schools is available from UNESCO. 

Data available for most countries from UNESCO. Data for Belgium, Luxembourg, 
Malta and Portugal was not available or incomplete. The number of schools for these 
countries is estimated from the number of pupils, which is available from Eurostat, 
taking the average number of pupils per school from all other countries for which the 
actual number of schools is available from UNESCO. 

Scaled from UK in proportion to the number of doctors 

We assume that the businesses located in research centres and business parks are 
captured in the businesses modelled as part of the various sizes of enterprise (see 
above and in Figure 4.3 below). In the event that a fibre connection can be laid only to 
the entrance of the centre or park, the cost of providing the final connection could be 
avoided. On this basis, our modelling approach provides a slight overestimate (and is 

Local authority 
buildings 

Primary schools 

Secondary 
schools 

Doctor’s 
surgeries 

Research 
centres and 
business parks 

2006427-302 

.  

Costing the new potential connectivity needs  | 54 

User type 

Data source 

therefore conservative), though the relatively small number of research centres and 
business parks (compared to the total number of businesses) is very small so this 
effect is considered to be immaterial. 

Airports 

CIA World Factbook 

Note  that  we  assume  that  all  universities  will  be  served  by  leased  lines,  and  50%  of  medium 
enterprises, hospitals, secondary schools, research centres and business parks. These assumptions 
are  made  in  the  absence  of  publicly  available  data,  and  we  have  therefore  tested  them  via  a 
sensitivity  analysis  (see  Section  5.2.1)34.  Other  large  SEDPs  such  as  stadiums  were  assumed  to 
have an immaterial effect on cost due to  their  small numbers, and were not  explicitly modelled. 
Note that consideration of the number of users per connection (e.g. pupils per school) is not within 
the scope of this analysis  

Figure 4.3: Sources for the number of smaller SEDPs for Scenario D [Source: Analysys Mason, 2016] 

User type 

Data source 

Micro 
enterprises 

Small 
enterprises 

Eurostat, Number of enterprises, From 0 to 9 persons employed 

Each enterprise is multiplied by an assumed number of sites per enterprise. Data for 
each country was derived from data gathered by Analysys Mason research. Data for 
the following countries was not available: 

  Finland, Germany, Luxembourg and Malta used the average of other Western 

European countries 

  Croatia, Cyprus and Greece used the average of other Eastern European 

countries 

Eurostat, Number of enterprises, From 10 to 49 persons employed 

Each enterprise is multiplied by an assumed number of sites per enterprise. Data for 
each country was derived from data gathered by Analysys Mason research. Data for 
the following countries was not available: 

  Finland, Germany, Luxembourg and Malta used the average of other Western 

European countries 

  Croatia, Cyprus and Greece used the average of other Eastern European 

countries 

Teleworkers and 
freelancers 

Eurostat, Number of Employed persons that usually work from home 

Post offices 

UPU and Eurostat (for Belgium) 

Police stations 

Scaled from UK in proportion to the number of police officers 

Libraries 

Museums and 
sites of cultural 
interest 

European Bureau of Library Information and Documentation Associations and the 
Gates Foundation 

Data on the total number of museums and sites of cultural interest was identified for 
France, Portugal, Spain and the UK. Data on the number of museums-only available 
for all countries except Slovenia. France appears to have many more museums and 

34

There is very limited public data on the total number of leased lines in each country, and the types of users that take 
leased lines. ACM in the Netherlands and Ofcom in the UK have previously published data on the total number of 
leased lines. However, we are unable to precisely determine what proportion of the above SEDPs take leased lines, 
especially in the context of large businesses also taking leased lines (which may have multiple sites, and are not in 
the scope of this study). In any case, we understand that the use of leased lines may be more prevalent in some 
member states than others, and it is not clear whether the data that is available includes end-to-end connections, or 
partial connections. Therefore, we consider that a base case assumption of 50% use of leased lines, which is tested 
via a sensitivity analysis, is the best approach. The sensitivity analysis can be found in Section 5.2.1. 

2006427-302 

.  

 
                                                      
  
Costing the new potential connectivity needs  | 55 

User type 

Data source 

sites of cultural interest than Portugal, Spain and UK. Total museums and sites of 
cultural interest are estimated for most countries based on the average for Portugal, 
Spain and the UK and scaled according to the number of museums (as a proxy for 
the total number of tourist attractions). The estimate for Italy and Greece is based on 
France, which is informed by these countries having a large number of UNESCO 
world heritage sites. 

Other small SEDPs such as farmers markets, museums and galleries, and other third-sector entities 
(e.g. citizens advice bureaux) are assumed to have an immaterial effect on cost due to their small 
numbers, and were not explicitly modelled. 

4.2.3 Distribution of SEDPs in relation to population 

We  have  also  conducted  an  analysis  of  the  distribution  of  SEDPs  in  relation  to  population  in 
several countries, as shown in the charts below (Figure 4.4 to Figure 4.9). 

Figure 4.4: SEDP distribution in UK (across 2640 

Figure 4.5: SEDP distribution in Cyprus (across 781 

postal districts) [Source: Analysys Mason, 2016] 

postcodes) [Source: Analysys Mason, 2016] 

2006427-302 

.  

0%25%50%75%100%0%25%50%75%100%% of populationBusinesses 20-99Businesses 100-500GPsHospitalsPrimary schoolsSecondary schoolsLibraries0%25%50%75%100%0%25%50%75%100%% of populationTotal businesses 
 
 
 
 
 
Costing the new potential connectivity needs  | 56 

Figure 4.6: SEDP distribution in Italy (across 107 

Figure 4.7: SEDP distribution in Spain (across 52 

territories) [Source: Analysys Mason, 2016] 

provinces) [Source: Analysys Mason, 2016] 

Figure 4.8: SEDP distribution in France (across 

36,664 communes)  

Figure 4.9: SEDP distribution in Estonia (across 216 
cities and rural communities)35  

[Source: Analysys Mason, 2016] 

[Source: Analysys Mason, 2016] 

35

The raw data showed an initial spike (not shown in the chart) which could be accounted for by Tallinn being a unit of 
analysis.  

2006427-302 

.  

0%25%50%75%100%0%25%50%75%100%% of populationBusinesses 10-49Businesses 50+0%25%50%75%100%0%25%50%75%100%% of populationBusinesses 20-49Businesses 50-99Businesses 100+Primary schools0%25%50%75%100%0%25%50%75%100%% of populationBusinesses 1-9Businesses 20-49Businesses 50+Primary schoolsSecondary schoolsHospitals0%25%50%75%100%0%25%50%75%100%% of populationBusinesses 10-49Businesses 50-249Businesses 250+Primary schoolsSecondary schoolsLibraries 
 
 
 
 
 
 
 
 
 
                                                      
  
Costing the new potential connectivity needs  | 57 

The charts show that in general, SEDPs tend to follow the distribution of  the population, and we 
have therefore assumed that SEDPs are distributed evenly across population areas. It is true that in 
some  Member  States  businesses  are  slightly  more  concentrated  in  denser  areas,  but  we  do  not 
consider the relationship to be strong enough to warrant an adjustment to our assumption of even 
distribution. Similarly, primary schools and libraries are slightly more concentrated in less dense 
areas,  but  since  these  SEDPs  have  lower  numbers  compared  to  businesses,  we  again  do  not 
consider an adjustment to our even distribution assumption to be necessary. 

4.2.4 Infrastructure assumptions 

To  avoid  double-counting  of  costs,  we  have  made  a  number  of  assumptions  associated  with 
infrastructure, presented in Figure 4.10.  

Figure 4.10: Assumptions made to avoid double-counting of cost [Source: Analysys Mason, 2016] 

Aspect of network 
infrastructure 

Re-use of existing 
ducts 

Sharing of 
infrastructure between 
scenarios 

Assumption 

Applied to fibre costs in all scenarios. Assumptions carried over from previous 
study 

Infrastructure scenarios are incremental to one another (though standalone 
costs are currently calculated) 

Impact of commercial 
deployment 

Commercially viable coverage of FTTP, Cable and wireless networks assumed 
to provide service for all types of users in relevant scenarios 

Existing macro cell 
sites 

We have considered the number of existing macro sites in each country, based 
on data made public by operators 

Wireless site sharing 

Macro-cell base 
stations with existing 
fibre backhaul 

Small-cell base 
stations that will use 
wireless fronthaul 

Transport links already 
covered by wireless 
networks 

Our results indicate that the majority of existing passive site infrastructure can 
be re-used. We expect active sharing only between 3rd and 4th operators, which 
the model accounts for by dividing the single operator costs by the lead operator 
market share (usually around 30-40%) 

We have assumed that 50% of macro cell base stations already have fibre 
backhaul. This is an assumption due to lack of data, and is tested with a 
sensitivity in Section 5.2.2. 

We have assumed that 50% of small-cell base stations will use wireless 
fronthaul and therefore do not need a fibre connection. This is an assumption 
due to lack of data, and is tested with a sensitivity in Section 5.2.3. 

We have gathered data on the length of motorways, state roads and provincial 
roads from Eurostat, and the length of railways from Eurostat and CIA world fact 
book. 

We have assumed that 75% of railways and motorways, and 50% of other 
roads, are already covered by wireless networks, guided by data from Ofcom. 
We understand that these coverage levels may be even higher in some 
European countries, and these assumptions are tested with a sensitivity in 
Section 5.2.2. 

We have assumed that the fibre needed to connect the new macro cells 
covering transport links can achieve a 90% re-use rate of existing duct running 
alongside the road or railway. 

Limit of wireless 
coverage 

Where coverage obligations exist, these are used, otherwise coverage is 
estimated 

2006427-302 

.  

Costing the new potential connectivity needs  | 58 

4.2.5 Commercial business case assumptions 

We  have  revised and  updated  our  commercial  business  case  assumptions  from  the  earlier  study. 
Specifically, we have updated our forecasts of residential take-up and ARPU, shown for selected 
countries in Figure 4.11 and Figure 4.12 respectively. Note that for SEDPs, we assume 100% take-
up. 

Figure 4.11: Selected updated forecasts of take-up 

Figure 4.12: Selected updated forecasts of fixed 

in covered areas [Source: Analysys Mason, 2016] 

broadband ARPU [Source: Analysys Mason, 2016] 

We have preserved certain other functionality from the earlier study, notably: 

  commercial  viability  of  coverage  is  assessed  through  NPV  analysis,  and  the  cut-off  for 

viability is defined as the point at which NPV per subscribers becomes negative 

  market share is based on current values, and assumed to stay constant over the forecast period 

  opex is calculated as an assumed proportion of deployment capex36  

 

 

36

the business case for fibre spans 15 years, while that for wireless is 10 years 

the weighted average cost of capital (WACC) for all Member States  is set at 9.5% for fixed 
networks and 10.5% for mobile networks. 

Annual opex is assumed to be 1% of cumulative capex for fibre-related deployments, and 15% of cumulative capex 
for the deployment of wireless infrastructure. 

2006427-302 

.  

0%20%40%60%80%100%2016201720182019202020212022202320242025% of homes passedBelgiumFranceGermanyItalyPolandRomaniaSloveniaSpainSwedenUK05101520252016201720182019202020212022202320242025EUR/user/monthBelgiumFranceGermanyItalyPolandRomaniaSloveniaSpainSwedenUK 
 
 
 
 
 
                                                      
  
Costing the new potential connectivity needs  | 59 

5  Results, validation and sensitivity analysis 

In this section we present the results of the analysis. We first discuss the main cost results for each 
of the scenarios considered on a standalone basis, and then consider the incremental cost of each 
scenario compared to its predecessor. We also present an analysis of commercial viability, selected 
country-specific results, and a discussion on mobile connectivity. Finally we present a number of 
sensitivity analyses to test key assumptions.  

5.1  Cost results for the infrastructure scenarios 

5.1.1 Results for each scenario on a standalone basis 

Our modelling yields standalone results for each scenario and these costs are shown in Figure 5.1. 

Figure 5.1: Summary of standalone costs, by scenario [Source: Analysys Mason, 2016] 

There are number of interesting comparisons to be made between the scenarios: 

  Scenario  E  (shown  here  for  100%  coverage  of  residential  premises)  provides  a  useful 
reference point, since it would be the most wide-scale deployment. This amount is very similar 
to the amount we estimated in our previous study (around EUR250 billion), for three reasons. 
First, we have assumed lower labour rates due to changes in labour costs. This effect reduces 
the cost. Second, we have been able to use better quality geo-demographic data which is now 
available  from  Eurostat.  This  second  effect  has  allowed  the  model  to  better  capture  the 
proportion  of  premises  in high-density  (lower  cost  per  subscriber)  areas  and  also  lowers  the 

2006427-302 

.  

64 11 81 197 249 40 44 38 64 050100150200250300A, LargeSEDPsB, MacromobileC, Small cellmobileD, SmallSEDPsE, ResidentialcoverageF, TransportlinksTotal investment cost (EUR billion)Fibre infrastructureWireless infrastructure 
 
Costing the new potential connectivity needs  | 60 

cost.  The  third  reason  drives  the  cost  back  up:  we  are  assuming  a  higher  take-up  rate  of 
services among residential users than the previous study. 

  The  results  for  Scenario  A  show  that  connecting  only  larger  SEDPs  would  have  a  much 
smaller total cost than serving residential premises. However, the  cost per subscriber is very 
high: Scenario A represents around 26% of the cost of Scenario E, but connects just 0.75% of 
the  number  of  users.  This  is  because  large  SEDPs  are  evenly  distributed  in  relation  to 
population  (and  therefore  residential  premises),  and  most  of  the  network  must  be  built 
regardless of which type of user is served. It should be noted that many of the subscribers in 
Scenario A (e.g. businesses, schools, hospitals, local authority buildings) will each include a 
number of users. On that basis a high cost per subscriber may be justified on the basis that the 
cost per user is much lower. 

  Under Scenario B wireless coverage is assumed to provide around 95% population coverage 
in each country (see Section 5.1.5). In order to provide an option for connecting small SEDPs, 
Scenario C is shown for 100% population coverage. However, there is a very large difference 
between the cost of providing macro-cell coverage (Scenario B) and the cost of also providing 
small-cell coverage (Scenario C). The difference in connectivity provided by the two scenarios 
is also considered in Section 5.1.5. 

  Under Scenario D, connecting small enterprises and home works is almost as costly as the full 
coverage achieved in Scenario E, despite the much smaller number of users (around 32% of 
the  users  in  Scenario  E).  This  is  again  because  small  SEDPs  are  evenly  distributed  with 
residential premises, and most of the network must be built regardless of which type of user is 
served. 

  Under Scenario F significant additional expenditure must be incurred on wireless equipment 

in order to provide coverage of transport links beyond the current levels.  

Cost of Scenario E at different coverage levels 

Figure  5.2  shows  the  total  standalone  cost  for  Scenario  E  at  80%,  90%  and  100%  coverage  of 
residential premises. 

2006427-302 

.  

Figure 5.2: Standalone costs for Scenario E at different coverage levels [Source: Analysys Mason, 2016] 

Costing the new potential connectivity needs  | 61 

The results show that increasing coverage to include the last 10% of premises increases the cost by 
50%. This is because the remaining proportion of the population is very sparsely distributed and 
the cost to reach these areas is high, with limited opportunity to share infrastructure costs between 
users.  

5.1.2 Incremental costs between scenarios 

As noted in Section 2.2, we designed the infrastructure scenarios to be incremental to one another, 
in that each scenario in the sequence adds further connectivity, at additional cost, to the previous 
scenario. Figure 5.3 shows the incremental costs if the scenarios were deployed in sequence.  

2006427-302 

.  

123 170 249 05010015020025030080% coverage90% coverage100% coverageTotal Investment Cost (EUR billion)  
 
Figure 5.3: Summary of incremental costs between scenarios [Source: Analysys Mason, 2016] 

Costing the new potential connectivity needs  | 62 

The incremental nature of the scenarios is driven by the following factors: 

  Fibre-related costs incurred in the first two sections of the access network (up to the primary 
connection  point,  and  then  on  to  the  secondary  connection  point37)  are  re-useable  between 
scenarios. 

  However, the costs of the final drop, customer premises equipment (CPE) and exchange-based 
assets are specific to the users in each scenario. Therefore they cannot be re-used, and instead 
accumulate  as  the  scenarios  are  added  up  –  which  is  why  the  total  cumulative  cost  for 
Scenario E  is  higher  than  its  standalone:  it  includes  the  cost  of  connecting  the  users  of 
Scenarios A and D (large and small SEDPs), as well as residential users. 

 

 

It should be noted that we assume that fibre laid for the PTP links in Scenarios A and C can be 
re-used for the GPON links in Scenarios D and E. 

It is assumed that the fibre laid for Scenario B to connect macro cell base stations cannot be re-
used as it follows a different route from the fibre required to connect end users. However, the 
PTP fibre to connect small cells in Scenario C can be re-used for GPON links in Scenarios D 
and E (see previous point) as it needs to run deeply into residential areas. 

  The  investment  required  for  Scenario  F  (transport  links)  is  always  additional,  since  this 
investment relates to transport links lying outside population areas, and therefore not covered 
by the population-driven macro-cell deployments of Scenario B. 

Overall,  the  results  show  that  if  Europe  was  to  aim  for  total  coverage  of  fibre  to  large  SEDPs, 
small  SEDPs  and  residential  premises,  plus  macro-  and  small-cell  future  mobile  connectivity  in 

37

See the schematics on page 34. 

2006427-302 

.  

64 11 52 117 72 40 44 38 64 64 120 210 327 399 502 0100200300400500600A, LargeSEDPsB, MacromobileC, Small cellmobileD, SmallSEDPsE, ResidentialcoverageF, TransportlinksTotal investment cost (EUR billion)Additional fibre infrastructureAdditional wireless infrastructure  
 
                                                      
  
Costing the new potential connectivity needs  | 63 

population  areas,  plus  future  mobile  connectivity  of  transport  links,  the  total  cost  would  be 
EUR502 billion. 

5.1.3 Impact of commercial deployment 

We  have  also  assessed  how  some  of  the  aforementioned  costs  may  be  met  by  commercial 
deployment,  though  due  to  the  additional  assumptions  involved,  there  is  more  uncertainty  with 
these estimates than the costing results. We have assumed that commercially viable deployments 
of FTTC, FTTP or cable could be used to cover the fibre-related passive infrastructure costs in the 
first  section  of  the  access  network  (exchange  to  the  PCP/street  cabinet),  while  FTTP  and  cable 
could be used to cover the fibre-related passive infrastructure costs in the remaining sections of the 
access network.  

Mobile Network Operators are under significant pressure with respect to both costs and revenues. 
In  addition  to  meeting  any  coverage  obligations,  it  is  not  clear  whether  they  would  prioritise  a 
wide area deployment of small cells, nor an extension of the macro-cell estate to cover transport 
links. Due to the large amount of uncertainty with the assumptions for future wireless networks, 
we have only estimated the commercial viability for fibre infrastructure 

The split between the commercially covered and the remainder of cost is shown in Figure 5.4.  

Figure 5.4: Summary of proportion of cost met by commercial deployments [Source: Analysys Mason, 2016] 

It should be noted that due to the way that the cost per user increases in lower-density areas, the 
proportion of cost covered by the commercial sector is different from the proportion of premises 
covered.  This  is  demonstrated  in  the  cumulative  cost  curve  for  selected  EU28  countries  for 
Scenario E, shown in Figure 5.5 and Figure 5.6.  

2006427-302 

.  

23 11 26 57 77 -42 55 140 172 40 -44 38 -64 64 55 119 197 249 103 050100150200250300A, LargeSEDPsB, MacromobileC, Small cellmobileD, SmallSEDPsE, ResidentialcoverageF, TransportlinksTotal investment cost (EUR billion)Fibre commercialFibre remainderWirelessTotal  
 
Costing the new potential connectivity needs  | 64 

Figure 5.5: Cumulative cost of covering all 

Figure 5.6: Cumulative cost of covering all 

households for selected countries in the EU28 

households for selected countries in the EU28 

(Scenario E) [Source: Analysys Mason, 2016] 

(Scenario E) [Source: Analysys Mason, 2016] 

It should be noted that in the charts above, the lines that appear quite flat appear as such due to the 
comparatively  low  total  of  providing  100%  coverage  in  the  country  (due  to  the  country  being 
smaller than the others shown). The cost per user of the selected countries is shown in Figure 5.7 
and Figure 5.8. 

Figure 5.7: Cost per user for selected countries in 

Figure 5.8: Cost per user for selected countries in 

the EU28 (Scenario E) [Source: Analysys Mason, 

the EU28 (Scenario E) [Source: Analysys Mason, 

2016] 

2016] 

2006427-302 

.  

01020304050600%50%100%Cumulative total investment cost (EUR billion)Population coverageFranceGermanyItalySpainUK02468101214160%50%100%Cumulative total investment cost (EUR billion)Population coverageBelgiumPolandRomaniaSloveniaSweden02,0004,0006,0008,00010,00012,00014,00016,00018,00020,0000%50%100%Investment cost per user (EUR)Population coverageFranceGermanyItalySpainUK01,0002,0003,0004,0005,0006,0007,0008,0009,0000%50%100%Investment cost per user (EUR)Population coverageBelgiumPolandRomaniaSlovenia 
  
 
  
 
 
 
 
Costing the new potential connectivity needs  | 65 

It  should  further  be  noted  that  the  jumps  in  the  cost  per  user  curves  are  being  caused  by  two 
effects:  

  Sharp increases in the cost per user can be caused by a change in the assumed availability of 
re-usable  duct.  For  example,  if  duct  is  only  widely  available  in  urban  areas  and  rural  areas 
feature more direct buried cable, this will significantly increase the cost. 

  Sharp decreases in cost per user can be caused the end of coverage of the cable network. With 
no cable coverage the market share assumptions means there is an increase in the number of 
users on the network which means the fixed costs are shared amongst a larger user base. 

5.1.4 Per-country results 

The model produces cost results for each Member State. As an illustration, Figure 5.9 shows the 
costs of Scenario E for ten selected Member States, split by geotype.  

Figure 5.9: Deployment cost per subscriber for selected countries, Scenario E [Source: Analysys Mason, 

2016] 

As  could  be expected, in  all countries  the  short line lengths  in  urban areas  produce  much  lower 
costs to  connect a  subscriber than  the long  line lengths  in  rural areas.  Regarding  the  differences 
between  countries,  these  are  driven  by  a  number  of  factors,  including  local  labour  rates,  the 
availability of duct infrastructure, the take-up of broadband and the market share of the modelled 
operator (e.g. vs. the market share held by the cable network operator). 

Analysys  Mason’s  proprietary  costing  tool  (which  is  provided  to  the  Commission  separately) 
would allow the visualisation of more granular results for each scenario and each country, such as 
the cumulative total cost of deployment, cost per home connected and cost per home passed. The 
tool can also present aggregated outputs for Western and Eastern Europe.  

2006427-302 

.  

024681012BelgiumFranceGermanyItalyPolandRomaniaSloveniaSpainSwedenUKEUR thousandUrbanSuburbanRural  
 
Costing the new potential connectivity needs  | 66 

5.1.5 Mobile connectivity results 

Calibration of site counts 

We  have  calibrated  our  wireless  modelling  based  on  available  data  on  the  number  of  existing 
macro-sites for each Member State. Demand and capacity assumptions were calibrated to yield site 
counts  similar  to  the  current  numbers.  Our  expectation  is  that  there  would  be  limited  further 
macro-site deployment in many markets (and rather, further capacity driven deployments will be 
mainly fulfilled with small sites). A comparison between actual and modelled numbers of sites can 
be seen in Figure 5.10. The analysis shows that our model produces a similar number of sites to 
the existing site counts. For some countries, the model forecasts a larger number of sites than are 
currently deployed. 

Figure 5.10: Comparison of actual and modelled site numbers for selected Member States [Source: Analysys 

Mason, 2016] 

Population vs. territorial coverage 

We have summarised in Figure 5.11 the population coverage and territorial coverage for selected 
countries and the EU28 in aggregate. The results show that territorial coverage is much lower than 
population coverage. 

Figure 5.11: Comparison of population and territorial coverage for macro-cell mobile networks in 2025 for 

selected Member States [Source: Analysys Mason, 2016] 

Country 

Belgium 

France 

Germany 

Population coverage 

Territorial coverage 

95% 

95% 

98% 

69% 

50% 

82% 

2006427-302 

.  

020406080100BelgiumFranceGermanyItalyPolandRomaniaSloveniaSpainSwedenUKTotal number of sites, thousnadEstimated total sitesModel  
 
Costing the new potential connectivity needs  | 67 

Population coverage 

Territorial coverage 

95% 

95% 

95% 

95% 

95% 

95% 

98% 

96% 

61% 

75% 

72% 

77% 

41% 

42% 

72% 

59% 

Country 

Italy 

Poland 

Romania 

Slovenia 

Spain 

Sweden 

UK 

EU28 

Small-cell results 

We have summarised the total number of small cells and premises covered by each small cell for 
selected countries and the EU28 in Figure 5.11. 

Figure 5.12: Summary of total number of small cells and premises covered by each small cell in 2025 for 

selected countries [Source: Analysys Mason, 2016] 

Country 

Belgium 

France 

Germany 

Italy 

Poland 

Romania 

Slovenia 

Spain 

Sweden 

UK 

EU28 

Total small cells (million) 

Premises covered per small cell 

0.3  

4.1  

3.8  

2.4  

3.0  

2.2  

0.2  

2.7  

2.2  

2.2  

35.5  

19.3  

7.7  

11.3  

12.3  

4.5  

3.0  

4.6  

7.4  

2.1  

12.9  

6.5  

The results that the deployment of small cells being considered is on a far more localised scale that 
current mobile networks: on average 6.5 premises would be covered by a small cell. It should be 
noted that these results are for 95% coverage of the population. 

Mobile connectivity performance 

We have considered mobile connectivity performance across the following three dimensions. 

Download speed 

There  are  two  key  download  speed  requirements  for  the  present  study:  a 
50Mbit/s for  mobile  connectivity  provided  from  macro  cells  and  a  1Gbit/s 
“hotspot” requirement from small cells for small SEDPs. 

To consider both of these requirements, we have used a rule to convert from 

2006427-302 

.  

 
Costing the new potential connectivity needs  | 68 

the peak speeds available from a technology to the average speed that a user 
could  achieve.  Based  on  our  project  experience,  and  analysis  of  the 
development of existing technologies, we estimate that around 1/5 to 1/6 of 
the  peak  speed  gives  a  good  indication  of  the  average  speed  a  user  may 
achieve within the cell. 

Our expectation is that macro cell technology in 2025 will be able to deliver 
peak  speeds  of  1Gbit/s  (subject  to  sufficient  spectrum  being  available). 
Based  on  our  rule,  this  means  that  a  user  could  expect  to  receive  around 
180Mbit/s  on  average,  well  above  the  50Mbit/s  target.  Similarly,  a  small 
cell deployment using large amounts of mm-wave spectrum is (according to 
the targets  of  5G)  expected  to  provide  10Gbit/s peak  speeds.  On  the  same 
basis as the estimate for the macro-cells, we would expect average speeds of 
over 1Gbit/s to be available from the small cell network.  

Other performance 
parameters 

Other  performance  parameters  may  also  be  of  importance  to  future 
connectivity needs; including latency and the ability to connect to users in 
rapid motion as the use various transport links. 

The 5G initiative has various targets beyond download speed, including 5ms 
latency, and being able to connect to a user moving at 500km/h (see Figure 
3.10 for more details). Our approach has been to  estimate equipment costs 
that are commensurate with these aims, to ensure that the cost results of this 
study align with the future connectivity needs of the EU28. 

Impact of machine 
to machine (M2M) 
communications 

Machine to  machine  communications  are  expected  to  be  a  key  user  of  5G 
networks around 2025. Similar to the previous point, we have tried to ensure 
that our forecast costs are sufficient to include the functionality required to 
support large scale M2M communications. 

5.2  Sensitivity analysis 

We  have  conducted  a  number  of  analyses  to  test  the  sensitivity  of  the  model  results  to  crucial 
assumptions.  These  analyses  fall  under  three  headings:  fibre-focused  sensitivities,  macro-cell 
wireless sensitivities, and small-cell wireless sensitivities.  

5.2.1 Fibre-focused sensitivities 

Duct re-use and the impact if the cost reduction directive 

We have tested the impact of a ±10% adjustment to the amount of underground duct which can be 
re-used, compared to our base-case assumption. The results for Scenario E are shown below. 

2006427-302 

.  

Figure 5.13: Sensitivity analysis of duct re-use for Scenario E [Source: Analysys Mason, 2016] 

Costing the new potential connectivity needs  | 69 

The analysis shows the total deployment cost for fibre is strongly affected by the level of duct re-
use. The proportion of the deployment cost met by the commercial sector is also affected, but the 
effect is small. 

Weighted average cost of capital 

We have tested the impact of a ±3% adjustment to the WACCs used. A variation in WACC could be 
achieved through alternative financing approaches to deploying the infrastructure.  

We have also tested the impact of having a WACC of 0%. This could be achieved through a financing 
model whereby any profits from densely populated areas could be used to extend the rollout into more 
sparsely populated areas. 

The results for Scenario E are shown in Figure 5.14, and demonstrate that the deployment cost is quite 
insensitive to a +/-3% variation in WACC. However, if the required WACC could be reduced to zero, 
it would have a large impact on the results. 

2006427-302 

.  

89 77 68 194 172 147 050100150200250300-10% duct re-useBase case+10% duct re-useTotal deployment cost (EUR billion)Fibre remainderFibre commercial  
 
Figure 5.14: WACC sensitivity analysis for Scenario E [Source: Analysys Mason, 2016] 

Costing the new potential connectivity needs  | 70 

The WACC only affects the extent to which a commercial operator can viably deploy; it does not 
affect the total cost. The insensitivity of the results to  the +/-3% changes in the WACC is due to 
some  of  the  viable  coverage  of  fibre  being  provided  by  the  existing  cable  networks,  which  are 
assumed to remain at current coverage levels. By splitting out the commercial coverage between 
cable  and  FTTP,  the  impact  of  the  WACC  can  be  seen  on  the  FTTP  result,  as  shown  in  Figure 
5.15. 

Figure 5.15: Comparison of WACC-adjusted FTTP commercial coverage to cable for the EU28 [Source: 

Analysys Mason, 2016] 

2006427-302 

.  

173 85 77 75 76 164 172 174 050100150200250300Zero WACC-3% WACCadjustmentBase case+3% WACCadjustmentTotal deployment cost (EUR billion)Fibre remainderFibre commercial40%77%48%43%36%0%10%20%30%40%50%60%70%80%90%100%CableZero WACCFTTP (-3%WACC)FTTP (Base)FTTP (+3%WACC)Population coverage  
 
  
 
Costing the new potential connectivity needs  | 71 

Proportion of large SEDPs using broadband instead of leased lines 

We have tested the sensitivity of the results for Scenario A to the proportion of large SEDPs using 
broadband rather than leased lines (leased lines are not in the scope of this study). In the base case 
we  assume  that  50%  of  medium  enterprises,  hospitals,  secondary  schools,  research  centres  and 
business parks will be served by broadband; in this sensitivity, we test the impact of varying that 
assumption between 20% and 80%. The results are shown in Figure 5.16. 

Figure 5.16: Sensitivity analysis of the assumed proportion of certain large SEDPs that use broadband for 

Scenario A [Source: Analysys Mason, 2016] 

The results are relatively insensitive to the proportion of large SEDPs that use leased lines, given 
the changes being tested. This is due to the even spread of SEDPs across population areas, and the 
fact that much of the access network must be built regardless of the number of connections being 
made. Furthermore, primary schools and doctors’ surgeries (which make up a large proportion of 
the total number of large SEDPs) are assumed to always be served by broadband.  

The  results  of  this  sensitivity  analysis  should  also  help  to  bound  the  uncertainty  regarding  the 
proportion of large SEDPs that may be connected with government-owned networks (and  which 
therefore would also not be served by the broadband network). 

A ‘utility’ view of investment 

We have considered the impact of a ‘utility’ view of investment. 

The first aspect of a utility view we have modelled is a fully overhead network, assuming the use 
of electricity poles to carry the fibre. The results are shown in Figure 5.17. 

2006427-302 

.  

17 23 26 34 42 49 0102030405060708020% use of broadbandBase case80% use of broadbandTotal deployment cost (EUR billion)Fibre remainderFibre commercial  
 
Costing the new potential connectivity needs  | 72 

Figure 5.17: Results of fully overhead deployment as a proxy for a ‘utility’ view of deployment for Scenario E 

[Source: Analysys Mason, 2016] 

The  results  show  a  large  drop  in  deployment  costs,  due  to  the  total  avoidance  of  the  cost  of 
deploying  any  duct.  It  should  be  noted  that  all  other  assumptions  have  been  kept  the  same, 
including for revenue: the utility is effectively assumed to be vertically integrated with a telecoms 
operator. It should be noted that under full aerial deployment, the proportion of viable  cost rises 
from 31% of cost to 56% of cost. The viable coverage of FTTP deployments rises from  43% to 
60%. 

The  second  aspect  of  a  utility  type  investment  is  to  consider  the  recovery  of  investment  over  a 
longer  timeframe.  In  Figure  5.18  we  have  shown  the  impact  of  using  a  30  year  business  case, 
instead of a 15 year business case in the base case. 

2006427-302 

.  

77 65 172 51 050100150200250300Base caseFull aerial deploymentTotal deployment cost (EUR billion)Fibre remainderFibre commercial  
 
Costing the new potential connectivity needs  | 73 

Figure 5.18: Results of extending business case timeframe from 15 years to 30 years for Scenario E [Source: 

Analysys Mason, 2016] 

Extending  the  business  case  time  frame  has  almost  no  effect.  This  is  because  the  base  case 
viability calculation already includes a terminal value which approximates the cash flow beyond 
15  years.  Extending  the  business  case  timeframe  does  have  a  small  effect  on  the  viability, 
extending the commercially viable coverage from 43% to 44%. 

Take-up of NGA broadband 

Within our forecasts for the take-up of broadband services, we have also created forecasts for the 
proportion  of  broadband  users  that  will  take  next  generation  access  (NGA)  services,  instead  of 
continuing  with  current  generation  services.  In  the  base  case,  we  assume  that  by  2025,  all 
broadband users will be connected via NGA services (noting that by 2025, 81% of all households 
will take broadband). We also consider a high and low variant of the take-up of NGA services. The 
forecasts are shown in Figure 5.19. 

2006427-302 

.  

77 77 172 172 050100150200250300Base case30 year business caseTotal deployment cost (EUR billion)Fibre remainderFibre commercial 
Figure 5.19: Forecasts of the proportion of broadband users taking NGA services [Source: Analysys Mason, 2016] 

Costing the new potential connectivity needs  | 74 

The impact of the varying the take-up of NGA services is shown in Figure 5.20. 

Figure 5.20: Results of sensitivity analysis to test the impact of varying the take-up of NGA services [Source: 

Analysys Mason, 2016] 

The  results  show  two  effects.  Regarding  the  total  cost,  a  higher  take-up  incurs  higher  cost. 
Regarding the proportion of the cost that is viable, again a higher take-up allows a slightly higher 
proportion of the total cost to be able to be covered by the commercial sector.  

2006427-302 

.  

0%10%20%30%40%50%60%70%80%90%100%2016201720182019202020212022202320242025Proportion of broadband users taking NGA servicesHighBaseLow66 77 79 159 172 172 050100150200250300Low caseBase caseHigh CaseTotal deployment cost (EUR billion)Fibre remainderFibre commercial 
  
 
Costing the new potential connectivity needs  | 75 

It should be noted that if ARPUs turn out to be higher than those assumed in our modelling, then 
the viability would also increase. 

5.2.2 Macro-cell wireless sensitivities 

Proportion of cells with existing fibre backhaul 

We  have  tested  the  sensitivity  of  the  results  of  Scenario  B  to  the  proportion  of  sites  that  have 
existing fibre backhaul. In the base case, we assume that the first 50% of sites (i.e. the sites serving 
the  densest 50%  of the  population)  already  have  fibre  backhaul38.  In  this sensitivity,  we  test  the 
impact of varying that result between 20% and 80%. The results are shown in Figure 5.21. 

Figure 5.21: Sensitivity analysis of the results of Scenario B to the proportion of sites with existing fibre 

backhaul [Source: Analysys Mason, 2016] 

Although the cost of the fibre infrastructure needed to serve the base station sites is quite sensitive 
to  the  assumption,  it  only  makes  up  a  small  proportion  of  the  total  cost  for  Scenario  B,  and 
therefore does not affect the overall result very strongly. 

Proportion of transport network already covered by existing wireless networks 

We have tested the sensitivity of the results in Scenario F to the assumption regarding the current 
proportion  of  transport  links  already  covered  by  mobile  wireless  networks.  In  the  base  case  we 
assume  that  75%  of  railways  and  motorways,  and  50%  of  other  roads,  are  already  covered  by 

38

   We estimate the length of fibre needed for each site by assuming that the base station is never more than one 

radius away from the local exchange (or other connection into the core network). The radius is adjusted depending 
on the density of the local population. 

2006427-302 

.  

13 11 7 44 44 44 010203040506020% of sites haveexisting backhaulBase case80% of sites haveexisting backhaulTotal deployment cost (EUR billion)Wireless infrastructureFibre infrastructure  
  
                                                      
Costing the new potential connectivity needs  | 76 

wireless networks. In this sensitivity analysis, we vary the two assumptions between 55% and 95% 
and 30% and 70% respectively. The results are shown in Figure 5.22. 

Figure 5.22: Sensitivity analysis of results of Scenario F to the assumed proportion of transport links already 

covered by mobile wireless networks [Source: Analysys Mason, 2016] 

Unlike many of the other sensitivity analyses, the results for Scenario F are highly sensitive to the 
amount  of  existing  coverage  of  transport networks. The  extent  of  the  existing  coverage  strongly 
affects the cost of ensuring coverage of all transport links,39 and highlights the need for more data 
on the existing coverage of transport networks in EU28 countries. 

5.2.3 Small-cell wireless sensitivities 

Proportion of cells using fibre connections instead of wireless fronthaul 

In the base case we assumed that 50% of small cells would be connected to the network via fibre, 
with the remained connected via wireless fronthaul. In this sensitivity analysis, we test the impact 
of  varying  that  assumption  between  20%  and  80%  of  cells  connected  via  fibre.  The  results  are 
shown in Figure 5.23. 

39

   We have costed the provision of coverage on railways, motorways, state roads and provincial roads. Communal 

roads are assumed to only be covered through coverage of population areas. 

2006427-302 

.  

56 40 23 91 64 37 020406080100120140160Low existingcoverageBase caseHigh existingcoverageTotal deployment cost (EUR billion)Wireless infrastructureFibre infrastructure  
 
                                                      
Costing the new potential connectivity needs  | 77 

Figure 5.23: Sensitivity analysis of the results of Scenario C to the proportion of cells that are wirelessly 

backhauled [Source: Analysys Mason, 2016] 

The results for Scenario C are highly sensitive to the proportion of cells that need to be connected 
via fibre (as opposed to wireless fronthaul). If 80% of cells must be fibre-connected (and therefore 
only  20%  via  wireless)  then  the  total  standalone  cost  becomes  a  large  proportion  of  the  cost  of 
deploying  fibre  coverage  to  all  homes.  It  should  be  noted,  however,  that  in  such  a  scenario  the 
fibre  laid  for  the  residential  deployment  could  be  significantly  re-used  for  the  small-cell 
connections (and vice versa). Nevertheless, the results show the importance of the development of 
the wireless fronthaul technique for small-cell deployments. 

Radius of small cells 

The  radius  of  the  small  cells  modelled  in  Scenario  C  is  a  key  modelling  assumption,  since  the 
expected  use  of  mm-wave  spectrum  is  expected  to  give  very  high  capacity  but  very  small  cell 
radii. In the base case, we have assumed that the  average cell radius is 200m.  In this sensitivity 
analysis,  we  have  tested  the  impact  of  varying  that  cell  radius  between  100m  and  300m.  The 
results are shown in Figure 5.24. 

2006427-302 

.  

37 81 126 38 38 38 02040608010012014016018020% of cells areconnected via fibreBase case80% of cells areconnected via fibreTotal deployment cost (EUR billion)Wireless infrastructureFibre infrastructure  
 
Costing the new potential connectivity needs  | 78 

Figure 5.24: Sensitivity analysis of the results of Scenario C to the assumed radius of small cells [Source: 

Analysys Mason, 2016] 

The analysis shows that the radius of the small cells has a dramatic impact on the number of cells 
required to provide coverage using very high-capacity (and high-frequency) spectrum. If the cell 
radius were to drop from 200m to 100m, the total deployment cost would be much more than the 
cost of deploying fibre to cover every home. However, if the radius were to increase from 200m to 
300m, then the cost of the wireless infrastructure would reduce to around half. 

In  contrast,  the  associated  fibre  infrastructure  (assumed  here  to  connect  50%  of  the  cells)  is 
relatively  insensitive.  This  exhibits  a  similar  behaviour  to  Scenario  A,  whereby  there  is  a  lot  of 
shared cost in the network, and changing the number of end ‘connections’ does not have a strong 
effect on the results. 

Sharing of small cells 

Finally, we have tested the sensitivity of the results of Scenario C to the assumption that there will 
be  full  sharing  of  the  small-cell  network.  Due  to  the  large  number  of  small  cells,  our  base  case 
assumes that operators will share the national estate of small cells, to minimise cost. The effect of 
no sharing (i.e. each operators has their own network of small cells) is shown in Figure 5.25. This 
demonstrates  that  if  operators  cannot  find  a  way  to  share  small-cell  infrastructure,  then  the 
deployment costs could be very large indeed. 

2006427-302 

.  

91 81 71 144 38 18 050100150200250100m cell radiusBase case300m cell radiusTotal deployment cost (EUR billion)Wireless infrastructureFibre infrastructure  
 
Costing the new potential connectivity needs  | 79 

Figure 5.25: Sensitivity analysis of the results of Scenario C to assumption of small-cell sharing [Source: 

Analysys Mason, 2016] 

2006427-302 

.  

81 89 38 103 050100150200250Base caseNo sharingTotal deployment cost (EUR billion)Wireless infrastructureFibre infrastructure  
 
 
6  Implications of the results and recommendations 

Costing the new potential connectivity needs  | 80 

Economies of scale are crucial for 1Gbit/s fibre 

We estimate that complete fibre coverage across Europe (Scenario E) would cost EUR249 billion. 
This figure provides a useful reference point for the other scenarios, since it  represents the most 
wide-scale deployment.  This  amount is very similar to the amount we estimated  in our previous 
study (around EUR250 billion), for three reasons. First, we have assumed lower labour rates due to 
changes  in  labour  costs;  this  effect  reduces  the  cost.  Second,  we  have  been  able  to  use  better 
quality geo-demographic data which is now available from Eurostat; this has allowed the model to 
better capture the proportion of premises in high-density (lower cost per subscriber) areas and also 
lowers the cost. The third reason increases cost: we are assuming a higher take-up rate of services 
among residential users than the previous study. 

The result for connecting small SEDPs (Scenario D) shows the effect of the economies of scale on 
fibre deployment costs. Despite connecting just 32% of the number of subscribers in Scenario E, 
79% of the cost of Scenario E is incurred. This effect is exacerbated when considering Scenario A: 
here only 0.75% of the subscribers in Scenario E are connected, but 26% of the cost is incurred. 
Therefore,  the  cost  per  connection  is  very  high.  This  behaviour  is  due  to  the  large  amount  of 
shared  costs  in  the  access  network,  and  highlights  the  strong  economies  of  scale  inherent  in 
networks of this kind. Large SEDPs are evenly distributed in relation to population (and therefore 
residential premises), and most of the network must be built regardless of which type of subscriber 
is served. It should be noted that many of the subscribers in Scenario A (e.g. businesses, schools, 
hospitals, local authority buildings) will each include a number of users. On that basis a high cost 
per connection may be justified on the basis that the cost per user is much lower. 

Economies of scale (or rather economies of scope) can also be seen across the scenarios. There are 
large synergies between scenarios, with scope for infrastructure to be re-used for more than one 
type  of  subscriber.  For  example,  if  fibre  were  to  be  deployed  to  serve  SEDPs,  this  would  also 
support a further deployment to connect residential users. 

Finally, the proportion of the standalone costs covered by the commercial sector is similar for each 
of Scenarios A, D and E. This is also because SEDPs are evenly distributed across populated areas.  

Future mobile connectivity should be able to provide at least 50Mbit/s 

Regarding the performance that future mobile connectivity networks could provide, we expect that 
by 2025, it will be possible for 1Gbit/s peak speed to be provided from the macro cell network. We 
estimate that the average  speed available  will  be  around  180Mbit/s,  which  is comfortably  above 
the target of 50Mbit/s. This conclusion is subject to sufficient spectrum being available;40 (we note 
that the implications  of  this  requirement are  potentially  significant  and  complex,  but  beyond the 
scope of this study). 

40

Peak speeds of 1Gbit/s have been demonstrated using aggregation of multiple carriers, see: 
http://www.lightreading.com/mobile/4g-lte/lte-advanced-pro-gigabit-4g-anyone/a/d-id/721036 

2006427-302 

.  

                                                      
  
Costing the new potential connectivity needs  | 81 

We have modelled the costs of providing macro-cell coverage to 95% of population areas, which 
is commensurate with the coverage obligations specified by spectrum licences in many countries. 
However this figure represents only 59% coverage of the territorial area of the EU28, so there will 
still be gaps in coverage and potentially service quality issues in remote and/or sparsely populated 
areas. 

A significant number of transport links are already covered in Europe: we assume 75% of railways 
and motorways, and 50% of state roads and provincial roads. However, providing full coverage of 
transport links would cost EUR103 billion, and operators may find it commercially challenging to 
deploy such coverage in addition to small cells (see the next point).  

The  costs  and  capabilities of  mobile  networks  in  2025  are  quite  uncertain:  2025  aligns  with  the 
timeframe  for  5G  being  introduced,  for  which  the  specifications  are  still  being  developed. 
However, our approach has been to estimate a cost which is commensurate with the goals of a 5G 
macro-layer,  including  support  for  a  continuous  user  experience,  the  Internet  of  Things  and 
mission-critical services. However, it is not yet clear of the extent to  which some aspects of 5G 
(such as sub-5ms latency) will be reliant on small cells (see the next point) 

Very dense small-cell networks covering the EU28 population will be very expensive 

We have also modelled a wide deployment of small cells covering 100% of the population, similar 
to the coverage modelled for macro cells, but with a very high density. Such a deployment would 
be commensurate with the aims of 5G to provide peak mobile speeds of 10Gbit/s or more via the 
use of mm-wave spectrum. We estimate that such a deployment would also allow home workers to 
wirelessly connect at average speeds of over 1Gbit/s.  

We  estimate  that  the  standalone  cost  of  the  modelled  small-cell  deployment  would  be  EUR119 
billion. However, this figure is subject to a number of uncertainties; our calculations assume that 
the following  conditions  will  be  met  (cost  figures  are  standalone,  not  cumulative,  and for 100% 
coverage):41   

  The unit cost of a small cell will fall to EUR1000. We expect that this will be possible due to 
the high volumes involved (around 36 million cells would be needed for 95% coverage of the 
EU28). However, if this target cost was not met, it would have a direct impact on the results 
(i.e. if the unit cost were EUR2000, it would double the required investment). 

  Around 50% of cells will be connected via a wireless fronthaul connection (i.e. only 50% will 
require connections via fibre). The precise definition of 5G small infrastructure is still being 
developed,  but  the  proportion  of  cells  using  wireless  rather  than  fibre  backhaul  connections 
could significantly impact costs: our analysis shows the standalone cost of Scenario C could 
vary between EUR75 billion and EUR164 billion. 

  Operators  are  able  to  share  the  small-cell  infrastructure.  Due  to  the  large  number  of  cells 
involved, and constraints arising from the deployment cost and finding sufficient locations to 
install the cells, we have assumed that in each country all operators share a single network of 
small cells. If they must each deploy their own set of cells, this would have a direct impact on 

41

For details, see our analysis in Section 5.2.3. 

2006427-302 

.  

                                                      
  
Costing the new potential connectivity needs  | 82 

costs (i.e. if there are three operators, then the investment cost for the wireless infrastructure 
would be multiplied by three). Without sharing, the standalone cost of Scenario C could rise to 
EUR192  billion,  i.e.  an  increase  of  EUR73  billion.  However,  the  development  of  sharing 
arrangements between operators will bring its own set of operational challenges. 

  The radius of each small cell is at least 200 metres. Due to the high capacity but very short 
range  of  mm-wave  spectrum,  we  have  assumed  that  the  deployment  is  driven  by  coverage 
performance only (i.e. this high frequency spectrum will always be able to provide sufficient 
capacity).  The  radius  of  the  small  cell  can  have  a  large  impact  on  the  results:  reducing  the 
radius  to  100m  would  increase  the  standalone  cost  for  Scenario  C  to  EUR236  billion  i.e. 
halving the radius increases costs by 98%. 

If  any  one  of  these  assumptions  is  not  achieved,  the  deployment  of  a  very  dense,  widespread 
coverage of small cells could be more expensive than wide-scale fibre. The commercial viability 
of such a network remains a major uncertainty at this stage. 

Other considerations highlighted by the scenarios 

The  three  fibre-focused  scenarios,  which  are  concerned  with  providing  1Gbit/s  wireline 
connectivity  to  large  SEDPs,  small  SEDPs  and  residential  premises,  represent  three  different 
points  on  the  same  continuum.  Although  this  study  has  considered  the  cost  of  deployment  in 
detail, the socio-economic benefit has not been within the scope of the work. It may be necessary 
to analyse the socio-economic benefit of connecting each of these different types of users, in order 
to assess which fibre-based scenario represents the ‘best value’. 

On the wireless side, our analysis forecasts that  developments in macro cell technology will see 
the possibility of widespread coverage of at least 50Mbit/s services over EU28 population areas. 
However, significant additional cost would need to be incurred to go beyond this level of service; 
either to extend the coverage of 50Mbit/s to all major transport links, or to increase the available 
speed  of  service  in  population  areas  to  1Gbit/s.  Whether  operators  have  sufficient  financial 
resources to achieve these additional rollouts remains a significant uncertainty. 

Finally, within the scenarios considered by this study there is an interesting choice available for 
connecting  small  SEDPs:  this  could  be  achieved  either  via  the  small-cell  wireless  (hotspot) 
approach of Scenario C, or the wireline fibre approach of Scenario D. Both options have similar 
costs,  but  Scenario  C  has  the  advantage  of  also  offering  mobile  connectivity,  while  the  fibre 
connection  provided  in  Scenario  D  could  be  more  future  proof.  Again,  further  analysis  of  the 
benefits of these two technological approaches to deployment may be beneficial. 

2006427-302 

.  

 
 
European Commission 

Costing the new potential connectivity needs  
Luxembourg, Publications Office of the European Union 

2016 – Pages: 82 

ISBN 978-92-79-60897-1 
doi:10.2759/213341 

 
 
 
 
 
 
 
 
 
  
 
 
K
K
-
0
1
-
1
6
-
7
4
4
-
E
N
N

-

C

C

C

C

C

C

C

E

K

K

-

9

-

1

2

-

5

3

8

-

F

R

-

C

doi:10.2759/213341            ISBN 978-92-79-60897-1 

Digital 
Single 
Market