In this article, Jaume Fornos shares insights and examples on network expansion in rural areas from his panel discussion at Gigabit Access 2018.

Fibre-to-the-Farm: Iceland’s response to connect hard-to-reach areas

By Jaume Fornos

At the Gigabit Access 2018 conference in Brussels, I was glad to be invited by the organisers at Total Telecom to moderate a session on Business Models and Technologies for Ubiquitous Rural Access – a topic I've personally done a lot of work on (e.g. see our report for Ofcom discussing how we analysed and determined the most cost effective technology mix to deliver a 10 Mbps Universal Broadband Service in the UK).

The panel was formed by senior technical and regulatory roles in EWE TEL (Germany), Deutsche Glasfasser (Germany), and Mila (Iceland).

With regards to technologies to connect rural areas, there was general agreement that fibre to the premise had become quite cost effective, even for rural areas. However, other technologies, such as fixed wireless and satellite broadband, would still be required in very hard-to-reach areas (e.g. small villages in mountainous areas).

There was also consensus that governments would need to provide economic assistance to ensure high speed broadband connections in commercially non-viable areas, such as sparsely populated rural areas. The representative of Mila, the wholesale access network operator in Iceland (similar to Openreach in the UK), highlighted a very interesting initiative taking place in his home country.

It is a matter of survival...having a decent broadband connection is a must-have

In 2016, the government set up a program to subsidize FTTH connections to around 5,500 remote, rural premises around the island – I took the liberty during the discussion to use yet another FTTx expression: FTTF, or Fibre-to-the-Farm. The national government sets around €4.5M each year for local authorities to compete for. The government funds usually cover between 20 and 50% of the total deployment costs, which are estimated at around €10,000-15,000 per household.

The rest is financed by the local authorities and the user, who has to pay a connection fee of around €2,000. When asked whether the users were ok to pay such a connection fee, Mila’s response was very frank: “I would not say they are happy, but for them it is a matter of survival: if the farmers want their children to visit at Christmas, or if they want the next generation to take over the business, they understand that having a decent broadband connection is a must-have”.

99.9% of homes and businesses in these very rural areas will be connected with a fibre connection

This scheme is set to end by 2021, at which point 99.9% of homes and businesses in these very rural areas will be connected with a fibre connection (the remaining 0.1% will be connected using fixed wireless and/or satellite). Quite a remarkable initiative, in one of the world’s least dense countries, with just over 3 inhabitants per square kilometer (3 times lower than in the Scottish Highlands Area, one of the most sparsely populated areas of the UK).

Deutsche Glasfasser highlighted another interesting initiative aimed at reducing risk in their fibre deployment: the company has set a 40% customer sign-up threshold before they give the go-ahead. In a recent article, we gave examples of other operators using the same strategy, and well as other initiatives that operators have embarked on, in order to minimize risk when deploying fibre networks.

Overall, a very interesting 40-min debate, which shed light on some of the key aspects of rural broadband access, a topic which is very high in the agenda of network operators and governments across the globe.