Taking the fiber challenge

It's not often that I copy and paste an entire press release, but it's not on the site yet, so here goes. This is another very clever (though not entirely unexpected) move by KPN, which is a nice incumbent validation of point-to-point fiber and more generally of open networks. And one has to assume that this is very unwelcome news for UPC, which still derives around 15% of EBITDA (at a nice margin) in the Dutch market, centered on Amsterdam. 

KPN participates in fiber roll-out in Amsterdam

KPN announces that it will participate in the fiber network roll-out in Amsterdam through its Reggefiber joint venture. For this purpose, the Reggefiber joint venture takes a majority stake in Glasvezelnet Amsterdam (GNA), an existing joint venture with the municipality of Amsterdam and several housing corporations. The Reggefiber joint venture does not require additional cash contributions from KPN for increasing its stake.

In the coming years, GNA will be responsible for a further and gradual fiber network roll-out based on Fiber-to-the-Home (FttH). During the first stage, it intends to realize some 100,000 homes passed on FttH in the next years. KPN intends to offer services on this network.

For KPN, participation in GNA via the Reggefiber joint venture is a next step following the establishment of a joint venture with fiber construction company Reggefiber in 2008. This joint venture is focused on the roll-out of FttH networks in the Netherlands and the company will roll out the Amsterdam network as well. Just like Reggefiber’s other fiber networks, the network in Amsterdam will be opened up to KPN and other service providers.

KPN is currently involved in pilots in ten cities for fiber, five of them with FttH. In the second half of 2009, the results of the pilots will be used to determine the speed and direction of a possible further fiber roll-out. After delivering the first 100,000 connections in Amsterdam, it will be assessed if and how a further roll-out in Amsterdam would be appropriate.

The proposed joint venture is subject to approval from the competition authorities.