“Hot Discussion”
At the beginning of the meeting, Mohammad Keshvari, the head of the Scientific Analytical Group “Teyf,” reviewed the status of fiber optics in Iran and various other countries. He provided an analysis of the different factors and issues related to the development of this network, emphasizing the stimulation of demand and the importance of increasing the connection rate. He stated that the low connection rate compared to the established coverage is a significant challenge in the country, with the current connection rate for the developed FTTx network being about 4%, while the average connection rate in a country like Turkey is around 30%. However, the difference in time since the project’s inception must also be considered. He cited France as an example regarding the fiber service and the migration from ADSL to fiber at the same price, and in Singapore, the IT network where operators are also responsible for indoor coverage.
He then addressed the challenges of stimulating demand, saying: “Stimulating demand for fiber optic coverage requires policies from both the regulator and the operators. Creating a revenue stream provides good motivation for network coverage, and without it, the coverage work will not come to fruition.”
Stimulating demand for fixed or home services through differentiating services, such as adding parental control software and child internet on the home network, as well as the possibility of unblocking some platforms on this network compared to the mobile network, can provide a competitive advantage for fiber demand.
In conclusion, Keshvari pointed to the continuation of these meetings in the form of a forum called the Iran FTTx Forum and said, “We intend to continue topics and common concerns among all operators and matters of public interest in this field through this forum, such as publishing continuous and useful reports to bridge the interaction between different stakeholders.”
Dr. Abbasi Shahkooh: Achieving Three Million Fiber Optic Network Connections is a Difficult but Possible Goal!
Dr. Abbasi Shahkooh, advisor to the Minister and director of the fiber optic home connection project, stated that achieving 3 million connections this year is a challenging and significant goal but possible. He mentioned that a large portion of the planned connections could be made by the Iran Telecommunication Company due to the investments it has made so far. Also, the main market for fiber optics initially will come from the migration of ADSL subscribers. Therefore, achieving this significant goal is not out of reach. He emphasized the importance and effectiveness of producing suitable content, and if possible, providing it competitively only on fiber. He stressed that some types of content, such as VoD and computer games, have much better quality on fiber, which can create a good advantage for these services. He also considered the effective and meaningful difference between mobile and fixed tariffs an important issue for stimulating demand towards new networks.
Engineer Shanesazadeh: Implementing Installment Plans with the Help of Banks Helps Increase Fiber Optic Connections
Engineer Shanesazadeh, Chairman of the Board of Directors of Shatel, identified modem-related issues as one of the most important problems in the development of fiber optics. He stated that the Iranian market, having missed out on intermediate technologies like VDSL and G.Fast in fixed broadband services, is thirstier than other markets. However, the current coverage, given the approach of municipalities, has mostly been in small and medium-sized cities and not in metropolises, which are the primary and main market for fiber optics. In these large cities where we have initially developed, at least 10% of initial attraction among interested and technology-savvy individuals has occurred without specific advertising. This rate happened merely by observing network development activities and their own visits. Therefore, the take-up rate in metropolises can be higher, and achieving connection goals depends on development in metropolises. However, increasing the take-up rate for small cities will be difficult.
He highlighted the issue of equipment and modems as crucial for achieving network goals, stating that an AC modem cannot deliver the pleasure of fiber to people. The necessity for domestic supply in this sector distances us from achieving connection goals. There is a serious problem in modem production in the country, with both low production quantity and poor equipment quality. For fiber optics, WiFi 6 & 7 modems should be used.
Regarding the issue of demand and content that can attract customers to fiber optics, Shanesazadeh said: “Given the current market situation, the only area where fiber optics can compete with the mobile market is in content and video. Also, the possibility of providing high-quality IPTV and VoD can help stimulate demand.”
The two main initial barriers are the initial connection cost and modems. The inability to implement installment and credit schemes in Iran with the cooperation of banks has exacerbated this issue. Post Bank can help finance the installment costs of connections, modems, and services in this area.
Finally, allowing and enabling the shutdown and removal of copper wire networks and DSL services in areas where fiber optic coverage is complete can help develop the fiber optic market.
Dr. Zareian: Lack of Contractors Impedes Rapid Network Development
Dr. Zareian, Deputy of Commercial and Customer Affairs of Iran Telecommunication, announced that so far, Telecommunication has attracted about 400,000 FTTH subscribers and plans to connect 500,000 new subscribers, which may reach one million. He identified the lack of quality modems and the high price of these modems as significant issues in not being able to expand the market. Also, the lack of network equipment and OLT compatible with the plans and the need for rapid network development is another obstacle.
He mentioned the implementation problems in creating the network, especially in small cities, saying: “There are no specialized and trained contractors for installation in all provinces and cities, which also hinders the speed of network development and increases costs.”
Engineer Riazi: How Can We Expect Millions of Connections Without Planning?
Engineer Hossein Riazi, CEO of Payam Communications Industries and Chairman of the Telecommunications Industry Syndicate of Iran, stated that although they are hopeful about investment and network development, if we want to reach three million connections in 1403, we should not announce this goal at the beginning of 1403 or two months before the start of the year. The problems in the sector are significant and related to liquidity and company revenues. These issues cannot be resolved with directive goal-setting. Besides, this goal should have been announced one or two years in advance to prepare for financing and investment, not at the beginning of the year. Although fiber optic development is very good, solving the equipment and modem issue during the program’s implementation is very difficult and requires prior and long-term planning. Equipment suppliers, due to liquidity and financing problems, may not be able to produce to meet market demand. Even importing millions in five or six months, considering the lengthy process of order registration, currency allocation, and sample approval, is not possible.
Engineer Saidi: Unhealthy Competition Among Operators with Municipalities and the Wrong Municipal Revenue Approach Must Be Corrected
Engineer Saidi, CEO of Mobin Net, stated that interaction with municipalities is one of the serious challenges in this area, criticizing the specific conditions formed in the fiber optic market regarding work with municipalities, unhealthy competition among players in contracting with municipalities, and the wrong view some municipalities have of generating revenue from network creation permits. This, he said, hinders network and market development. The Mobin Net CEO also mentioned that unhealthy price competition damages the fiber optic market. He did not find the current connection incentives optimal given the significant differences between types of cities and called for their revision.
He also stated that the recent increase in infrastructure costs (both internet bandwidth and transmission cloud) disrupts the possibility of providing affordable services to subscribers, which significantly increases the share of infrastructure costs in the final costs in the fiber optic market.
Engineer Yousefi Zadeh: Using Fifth Generation as an Access Technology in the Fiber Optic Network Reduces Costs and Increases Connection Speed
Engineer Yousefi Zadeh, CEO of Asiatech, considered the initial development from small cities instead of large cities, due to the policies of metropolitan municipalities, as a factor that makes it difficult to achieve connection goals.
He also highlighted the role of using the fifth generation as an access technology in the fiber optic network, stating, “In coverage and connection, the position of 5G must be considered as soon as possible, or else the opportunity for this technology will be lost. The regulatory organization should quickly allocate new frequencies for this purpose to all applicants geographically, or else 5G will face the fate of VDSL. Using 5G can reduce the resources needed for city coverage and connection by up to 25%.”
Additionally, providing content and television over the internet can help stimulate demand and increase network connections.
Asiatech, with maximum capacity, has placed teams for network development but still has not achieved connection goals. With the current size of available contractor teams, achieving million connections is not possible. Serious obstacles are the shortage of OLT and the quality and quantity deficiencies of domestic modems, and the import path must be facilitated.
Moreover, domestic producers expect significant prepayments before the R&D stage of equipment, while their quality and quantity are debatable.
Engineer Rezaei: Connection Subsidy Is Not Enough / Major Cities Should Be a Priority
Engineer Rezaei, Director General of Legal and Regulatory Affairs at Irancell, stated that the million-connection goal is not designed according to market conditions. The most crucial item in stimulating demand is making modems and installation free, requiring a cost of 5 to 6 million per subscriber, which should be compensated by subsidies, and current subsidies are not enough.
Also, increasing connections is possible from large cities where no development has taken place yet.
He suggested that the relationship between operators for wholesale and sharing in different areas should be quickly clarified and regulated by the regulatory organization.
The serious challenge of supplying OLT and ONT modems must be addressed,