[CAnet - news] Real world example of customer owned last mile

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[In a recent trip to Sweden I was pleasantly surprised to discover a very
successful community fiber project in Vasteras Sweden. The local electrical
utility Malarenergi has developed a unique and very successful solution for
deploying FTTH to over 50% of the homes with an amazing 53 take up rate.
They have over 30,000 customers and this is in despite of stiff competition
from both a local telephone and cable company.  More amazingly they have
only a staff of less tan 18 FTEs to operate and manage the network.

The Malarenergi is also a good example of how banks can play an important
role in financing customer owned last mile networks.  The banks have the
security of the home to loan against and provide low cost financing - and
they are not in the business of running networks. In Amsterdam the ING bank
is a major financier of the Amsterdam FTTH project. As well a Swedish home
can reduce 650 USD from the infrastructure cost in a tax reduction, which is
another significant incentive for homes to get connected with fiber.

For single homes Malarenergi have two kinds of customers. 
1) Those who are organized in a community or condominium. This community
makes agreements regarding cable Tv etc
2) Those who are stand alone customers. 

In the former case the network is a LAN which is purchased and owned by the
community in that area. The juridical person is the community who can take
loans and rent the networks out to the different homes. Two banks provides
financing.

For the individual home the customers usually arranges their own financing
for the fiber by loaning on their house.  The typical cost for the fiber is
$USD 2800.

For both types the Malarenergi sales pitch is 
1) Futureproof. Malarenergi does not start building unless 60% or more of
the homes in that area sign up. Most people do not want to be left behind.
The homes increases in value (ap/prox 6500 USD according to some firms. See
the sign up page http://stadsnat.malarnetcity.se/villa/

2) Freedom of choice of the services. This means competition and valuable
services. See for example internet prices
http://www.malarnetcity.se/services/services.php?category=Privatpersoner&kin
d=Internet

100 Mbps for less than $40 a month and a choice of at least 20 ISPs
including Telia - the local telephone incumbent

3) The cost for the new fiber infrastructure spread out over 10 years is
about (20-25 USD/month) plus 10 mbps internet (22 USD/month)is cheaper than
an equivalent ADSL service. 

The network technology is provided by a company called PacketFront -
www.packetfront.com which uses web services to allow customers to do their
own provisioning and selection of service providers.

Thanks to Matt Wenger of PacketFront and Robert Kelljberg of Malarenergi for
this information -- BSA]


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These news items and comments are mine alone and do not necessarily reflect
those  of the CANARIE board or management.

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