New challenges for Reggefiber under new director

Friday 17 April 2015 | 11:41 CET | Background

KPN is a shareholder in the Dutch FTTH network operator Reggefiber since 2008 and recently took 100 percent control of the company. KPN's decision to slow the fibre roll-out and focus also on upgrading its VDSL network signals a new period for Reggefiber. The operator has also seen a change in management, with the departure of Bert Nijboer and Jan Davids in the past year, and the arrival of the new CEO Elmer Wiemer (38) in March. Wiemer reports to Joost Farwerck, managing director for KPN Netherlands. Telecompaper recently spoke with Wiemer, who has held a number of positions at Reggefiber since 2008, in finance, innovation and construction. 

KPN broadband strategy

KPN decided recently to accelerate the upgrade of its copper network using new VDSL techniques supporting speeds up to 200 Mbps. As a result, the roll-out of FTTH will slow in 2015 and 2016 compared to previous years. In an interview with Telecompaper, Wiemer was quick to underline that this does not mean that FTTH is up for discussion at KPN. The Dutch operator is taking a two-pronged approach, developing not only FTTH, but also VDSL in combination with vectoring and pair bonding. The same as in 2014, when the group added 315,000 homes passed, KPN will slow the FTTH roll-out slightly in the years to come. Reggefiber will remain busy though, including working on the outlook beyond 2016.

Reggefiber and KPN make a Broadband Master Plan for every municipality in the Netherlands. The plan is designed to help meet the group's target of ensuring 85 percent of households in the Netherlands can access broadband at 100 Mbps or more by the end of 2016. The master plans look at the possibilities for upgrading existing copper lines, or if not possible, the roll-out of fibre infrastructure. In new-build areas of 100 homes or more, fibre is already the first choice. Haarlem is an example of the strategy: most areas will get a copper upgrade and three neighbourhoods in the north of the city will receive FTTH. 

Reggefiber has signed cooperation agreements with a number of medium-to-large cities in recent years. In the past, this usually meant the gradual roll-out of fibre to each area, but now it plans to cover only certain parts of cities. While Reggefiber and KPN declined to confirm the plans, this is expected to be the case for cities such as Maastricht, Den Bosch and Roermond.

Reggefiber's role at KPN

In the near term, Reggefiber will not be building networks at the same capacity as it did a couple years ago. Nevertheless, Reggefiber's position is strong enough for KPN to allow it to continue as an independent concern within the group, Wiemer said. Its expertise in the fibre market and the Reggefiber brand's strong association with FTTH support its position.

Just as important is its efficient operational structure - Reggefiber does not have a complicated management structure with multiple layers, nor any business units without synergies. The operator employs in total around 350 people, of which 270 at offices in Rijssen, Baarn, Eindhoven and Amsterdam. The company is looking at how the efficient business operation can be extended to other processes. 

Reducing roll-out costs

Wiemer expects the costs of network roll-out to fall further in the coming years, through process innovation and extending integration in the supply chain. More and more is done on the basis of partnerships, and the company is continually working with partners to see how processes can be further optimised. Examples include working with utilities providers on reducing damages resulting from excavation works. 

It has also set up the ZoARG project with partners, aimed at improving the roll-out process to reduce damages from poorly planned digging. They have developed a radar technology to identify the precise location of undergound cables and ducts. Wiemer expects improvements in this technology and its further integration in the excavation process will help save time and lower costs further. 

Cooperation mode

Reggefiber is also working to build up its expertise in rolling out fibre in rural and outlying areas. Demand in the market is changing, as is the company's role. Municipal and provincial governments are actively searching for solutions, and Reggefiebr is glad to assist, Wiemer said. The FTTH operator is working actively on developing its partnership model. It has conducted a number of pilot projects in rural areas in the past two years, including in Bergeijk, Putten and Lonneker. The focus is on the most efficient way to connect these areas. The accumulated experience is now being used to develop a strategy for connecting outlying areas. 

Wiemer expects Reggefiber to take a more active role in this process in the coming years, but noted as well that the participation of residents and local governments is also necessary in order to achieve a healthy operational model for the network.

Reggefiber sees opportunities for intensifying its cooperation with KPN, and KPN is also looking to Reggefiber. Reggefiber manages a network that reaches around 30 percent of Dutch households. While KPN may be easing its foot off the pedal, Wiemer said he is confident that this is only a delay and not a suspension. As KPN works on its broadband strategy for 2017 and beyond, fibre will continue to be rolled out, and investment will focus on improving processes and partnerships. 

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