Due to the increasing demand in data rates telecom operators are faced with the question of when to upgrade their access network infrastructure toward fiber-to-the-home (FTTH). In this paper a techno-economic study of fiber-to-the-cabinet/very high bit rate digital subscriber line (FTTC/VDSL) and FTTH deployments is performed. The economics and risks associated with the incumbent’s decision to invest in dense urban and urban areas are analyzed using both discount cash flow (DCF) analysis and real options analysis (ROA). The results revealed that in the case of investment subsidization, the option value to expand in a later phase can significantly improve the financial metrics of the business cases. The analysis made is based on the ECOSYS techno-economic methodology and tool.
© 2010 Optical Society of America
Original Manuscript: December 11, 2009
Revised Manuscript: June 20, 2010
Manuscript Accepted: July 30, 2010
Published: August 31, 2010
Theodoros Rokkas, Dimitris Katsianis, and Dimitris Varoutas, "Techno-economic Evaluation of FTTC/VDSL and FTTH Roll-Out Scenarios: Discounted Cash Flows and Real Option Valuation," J. Opt. Commun. Netw. 2, 760-772 (2010)