Second gear

Yet another jaw-dropping development in the Dutch access market, which is doing much more than making up for the late summer doldrums elsewhere in the sector.

Today we learn (again from Vincent Dekker at Trouw - can this man smell a story or what?) that one of Rotterdam's social housing corporations, Stadswonen, is next week to launch an open FTTH network to 5,500 homes in the inner city, serving primarily the student and first-time buyer markets. As with the proposed Amsterdam muni project, this initiative is also managed by Telecom Italia subsidiary BBNed. The article quotes Stadswonen's CEO as saying that the inspiration for the initiative came from requests from American and Korean ex-pat students who missed having high-speed connectivity in their accomodation (presumably being accustomed to fiber on campus back home), and the company decided it couldn't wait for whatever fiber might be coming from the municipality.

Now for the really exciting part - the pricing.

For residents who want a fiber connection, they pay an incremental rental fee of EUR5.40 per month if no fiber tail is present in the building already and only EUR1.80 per month if fiber is already present (which is the case in some buildings). The fact that it's bundled into the monthly rent presumably makes this almost an invisible amenity, in the same way that refuse collection or landscaping is just part of the total package - and it's difficult to see anyone arguing with such a nominal fee, though there is an opt-out for those who don't want it.

Better still is the pricing for connectivity. Students will receive service for free from SURFnet, and for non-students, the first ISP offering to launch on the network (Pilmo, a BBNed ISP, but there will be others, no doubt) delivers 10Mbps and 30Mbps symmetrical services for EUR4.50 and EUR7.00 per month, respectively. THIS IS NOT A TYPO! Not only is this top-tier service equivalent only to the price of a couple of beers (a benchmark for students, I guess), it also represents an 88% discount to UPC's top-tier offering of 20Mbps down/2Mbps up for EUR59.95. Time to get out the strategic pricing manual.