Setting monthly wholesale charges for FTTH and HFC services in Belgium

Project executed on behalf of Belgian Institute for Postal Services and Telecommunications (BIPT)

Project Objective

The project objective was to set the wholesale recurrent charges for FTTH and HFC services in Belgium, on behalf of the Belgian regulator (BIPT).

Project Description

The following activities were carried out:

  • Definition of a methodology for the development of bottom-up LRIC (BULRIC) models for fixed networks, taking into account the regulatory context of the FTTH (Fibre-to-the-Home) and HFC (Hybrid Fiber Coaxial) markets in Belgium.
  • Development of two bottom-up LRIC models for fixed networks, allowing the calculation and prediction of network costs by service for the determination of wholesale monthly tariffs. More specifically, individual scenarios were integrated into the models for the assessment of all Belgian operators with SMP: Proximus for FTTH networks and Telenet, Brutélé and Nethys for HFC networks.
  • The development included a detailed geographical analysis of the footprints occupied by the different Belgian operators, aimed at characterizing the zones covered in terms of distances between network elements. This information was later used in the bottom-up model for the design of fixed access networks, as it had a direct impact on the length of cables that needed to be deployed. For this purpose, the geographical analysis took as its starting point the GIS database available at the BIPT, which contained the coordinates of all buildings across the entire country. By means of big data optimization algorithms, we estimated the length of cables and routes that needed to be deployed by each operator, depending on its footprint.
Figure 1: Geotype classification of Belgian demographic sectors for the geographic analysis
Figure 2: Optimal location of the nodes (OFPs) that need to be deployed for an area situated in an URBAN geotype
  • The project included two phases of public consultation with the industry, whose outcomes were taken into consideration for the refinement of the methodology and the models.
  • Training in the development and use of the models was also a fundamental and continuous component, throughout the project lifecycle. By means of workshops and training sessions, Axon worked with the client team members to ensure they gained a thorough understanding of the methodologies and mechanisms employed in the models.
  • At the final stage, Axon also provided support to the BIPT in its decision process for the setting of wholesale prices, which strongly relied on the outcomes of the bottom-up models developed previously and during the ensuing interaction with the European Commission.

Key Takeaways

The outcomes of the project were employed to define the regulatory framework for wholesale monthly rates for HFC and FTTH services in Belgium.

Links to the publicly available documents prepared by Axon Consulting can be found here: Methodology, FTTH model and HFC model.