Cost allocation model for a synergetic cooperation in the rollout of telecom and utility networks

Fiber to the Home delivers the most future proof solution for fixed telecom access networks. This technology requires the installation of optical fiber in the last mile. However, the penetration of FTTH services is Europe is lagging, with only marginal uptake in most countries. One of the main causes of this low penetration is the higher initial installation cost for a fiber access network. Regulation typically enforces a fully buried installation, which results in an investment cost around 750 Euro per house passed. Driving down this cost is a main focus of research. A joint rollout with other utility infrastructure network operators can decrease the initial rollout cost for all utility and telecom infrastructure actors involved in the process. This paper presents an innovative approach to cost sharing in the rollout of access networks. The cost model presented allows for cost savings up to 17% per home passed for the telecom operator.