Swiss FTTH Deployment in Jeopardy

SWIT0003 I have been known to say that regulation is often wrongly blamed for delays in FTTP deployments. What many players (especially incumbents) mean when they bemoan "regulatory uncertainty" is "unfavourable regulation".

In this instance though, it looks at first glance as if regulation is indeed to blame. For a number of years now, Swiss incumbent Swisscom has been signing deals with municipal energy companies to deploy FTTH. The model is quite novel, with the incumbent deploying 4 strands of fiber into each home, 1 for its own use, 1 for the use of the energy partner and 2 for wholesale.

Last week, Competition and Regulation authorities in Switzerland indicated that they were unhappy with the conditions under which the partnerships were signed, which puts all of Swisscom's plans as currently implemented in jeopardy. Swisscom has announced that it is reconsidering all signed agreements which may in turn result in slower or, in some instances no FTTH deployment. 

Swisscom is one of those rare incumbents that faces universal and stiff cable competition, so I can't see them ditching the whole plan. There's no doubt it's a set back, and I can understand that they would reconsider their options, or even threaten to pull the plug, but ultimately I doubt they will.

What's intriguing is that Weko seems to fear that the deals inhibit infrastructure competition. I don't know the details of these deals, but the existence of extra fiber back to the central office available for competitors, it seemed to me, was more protection against lack of infrastructure competition than most incumbents were suggesting was reasonable, so I can't help but be a little puzzled about this. 

Maybe some of my Swiss readers will enlighten us...