Speaking at the IQPC Next Generation Fixed Networks Summit Eastern Europe that took place on 2nd and 3rd December in Budapest, I stressed the importance of regulation not only giving way to NGA investment and competition but also providing clear incentives to replace copper with fibre.
These must not be reduced to regulatory holidays, as often wrongfully implied by some politicians: the migration to fibre prior to the end of copper actual asset life will only take place if that happens to be the way for telcos to make money or save it, by either being able to charge more for the last mile, reduce the churn due to technologically superior competitors, or reduce maintenance costs. If copper is not being replaced on a commercial basis, the regulators should step in.
Part of the story is lately much discussed structural separation that would put infrastructure at the core of the telco business, aimed at reducing market distortions that stem from attempts to use wholesale network power as a leverage in the retail broadband market. However, pricing incentives might be even more important. Instead of fixing the price for copper at €8-10, the European Commission and national regulatory authorities could provide for a glidepath that would make it increasingly unprofitable to continue providing services via copper, without immediately starving the telco industry of the investment money. Re-investment obligations fo regulated operators could also be considered.
