Federated access poised to become a new FTTH market structure: report

A shift in the ownership of fixed assets is expected to become evident from 2025 onward.

Federating, or clubbing, access  between network operators is set to emerge as an economically sustainable alternative to current open-access models in the coming years, according to Rupert Wood, research director and expert in infrastructure, fixed networks, and wholesale at Analysys Mason.

A shift in the ownership of fixed assets is expected to become evident from 2025 onward. Recent years have seen the trend for separating infracos and servcos, and the sale, or more often, partial sale, of physical fibre assets to institutional investors.

For network companies (netco), the primary goal of such arrangements is to achieve operational benefits such as revenue deltas from additional tenants and efficiency gains.

However, if investors fail to realise the expected returns or reach their planned exit dates, this leaves opportunities for operators to buy back, particularly if, as expected, their capital expenditure intensity falls away.

“This scenario may also result in a more distributed ownership of assets amongst the leading 
telecoms operators, which acquire equity stakes (or indefeasible rights of use) in geographically 
discrete chunks of the network largely based on market share,” Wood said.