Focus on High-Quality / High-Reliability Demand
In this series of articles on fiber optic business models, we examine various business models for this technology and the experiences of operators around the world. The first three models – Aggregation of Retail Demand FTTH + FTTO, Bulk Purchase Guarantee by Key Customers, and Wholesale-Only – were discussed in previous articles. Here, we explore the fourth business model.
Model 4: Focus on High-Quality / High-Reliability Demand
The “Focus on High-Quality / High-Reliability Demand” business model targets customers who prioritize high-quality, reliable fiber connections, often for critical or premium services. This model involves providing services to sectors willing to pay a premium for superior performance, reliability, and support. Quality and reliability are pivotal in this model, addressing specific needs such as FTTO, base stations, and data centers.
Facilities like factories, data centers, public buildings, and mobile backhaul facilities require high-quality and reliable networks. Operators that can guarantee these services can charge higher prices for their offerings. By meeting advanced communication needs, companies can secure long-term contracts (sometimes over 10 years for mobile backhaul), significantly mitigating risk. This allows operators to attract venture capital investments to strengthen development and acquisitions, effectively reducing the need for public support.
One company utilizing this principle is Eurofiber. Founded in 1999 by a group of venture capital entrepreneurs, Eurofiber has now installed 38,000 kilometers of fiber optic cable across Belgium, the Netherlands, Luxembourg, France, and Germany. Additionally, the company owns 10 data centers in the Netherlands and France, while also connecting several other third-party data centers.
Their business model enables wholesale and retail customers to develop their own transport networks. Today, their services are complemented by direct connections to cloud computing platforms, including AWS, Azure, and Google. All their transport products offer connectivity up to 100 Gbps, and they also provide terabit connections for customers with specific needs.
Eurofiber has worked on this model for about two decades, demonstrating its sustainability. In recent years, the company has applied its expertise in high reliability to other projects as well. They serve as the backbone and local access provider for smart cities and connected projects, including 5G small cell sites. At the same time, they have remained committed to an aggressive expansion strategy, entering the German FTTH market as well.
References:
– “FIBRE-TO-THE-HOME BROADBAND: BUSINESS MODELS AND FUTURE CONNECTIVITY,” FTTH Council Europe, [Online]. Available: [FTTH Council Europe](https://www.ftthcouncil.eu/resources/blog/guide-to-successful-ftth-business-models).
– “The business models that are attracting FTTH investment now,” Outvise, 2022. [Online]. Available: [Outvise](https://blog.outvise.com/business-models-attracting-ftth-investment/).