A few weeks ago, Benoît Felten of Yankee Group and Fiberevolution gave a speech at a New Zealand Commerce Commission event which included a fascinating argument.
He points out that receiving a return on the substantial capital investments that a fiber to the home (FTTH) project requires is much more dependent on takeup rates than on the average revenue per user.
Single player large scale deployments usually achive only 20%-25% initial adoption after which growth is exceedly slow. On the other hand, systems which are open to competitors, i.e. with viable wholesale services, attract many more players who market, sell and deliver new services thus dramatically increasing adoption and accelerating the wholesaler's return on investment.
In short, obtaining a regulatory holiday so you can run your new fiber network as a monopoly is actually bad for your shareholders!
Benoît's speech was filmed. For the full presentation (in four segments of < 10 minutes each on YouTube) see Benoît's post.If you want just the essence, listen to the first three minutes of this:
Here is an enlarged version of the chart that Benoît is using while he speaks:
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