Have you heard of Zitius ?

I was recently made aware of an interesting model developed by Swedish company Zitius. Zitius presents itself as an Opco, for Communications Operator. What this means is that they don’t own the network, but neither do they provide the service. What they do is provide the end customer with an Open Access Network.

On the one end, you have fiber connected customers, and on the other end you have Service Providers. Zitius rents the network to connect the two, which allows the end customer to choose his Service Providers freely. In other words, the player providing the fiber is not the same as the player providing the service. Furthermore, no more does the end customer have to get an all in one bundled service package. He/she can cherry pick at will.

Zitius' revenue comes from the Service Providers. Presumably it's some form of revenue share although I haven't managed to find details on the exact revenue model so far. Their value proposition to the Service Provider is penetration with little investment (accessing a wide customer base through an already deployed network), QoS (assuring the customer can access the service) and instant customer access to a given provider. They have developed a platform that allows the customer to switch providers in real-time (or near so, I'm not absolutely clear on that) or even to have several competing providers for the same service.

You want to have Telia as a phone service provider because they are reliable (they're the incumbant over there, so I'm making a legitimate assumption here) but Tele2 are dirt cheap to Germany and you have a cousin there? Have both! There's this cool musical channel on Viasat but the global offer of FastTV is more attractive? Have both! More significantly perhaps, you're pissed off with ephone's service? Switch to another phone provider. (All the above examples are fictional and should not reflect on the actual quality of all these undoubtedly fine providers.) So the value proposition to the customer is an open market with no barriers. Not bad, eh?

I can't assess the financial efficiency of their current business model, but there's something here that strikes me as clever. It seems obvious to me that if you offer a customer 10 or 100 times the bandwidth he currently has, he's going to expect 10 or 100 times the variety of service. And I don't see many ISPs having the capacity to develop such a wide service offer on their own. Furthermore, by offering competing services to the end customer, you maximise the chance that he will find something attractive in your portfolio.

I don't see why a fiber network operator couldn't take this very same approach, unless the platforms needed to manage the service are very costly indeed. But surely if you own the network your cost structure is bound to be better, and furthermore you are all set to maximise deployed network usage. I think a Zitius like model could be one of the succesful ways to implement fiber. I will try and find more about them, and if I do, I will let you know.