Swisscom says opportunism pays in fibre rollout

By Niclas Mika

BARCELONA, Nov 21 (Reuters) - Speeding up broadband delivery by extending fibre-optic cables into homes is best done with patience, Swisscom (SCMN.VX) Chief Executive Carsten Schloter told an investor conference on Friday.

With construction costs making up as much as 80 percent of the cost of laying fibre, telecoms carriers can save money by laying fibre only when there is other construction going on, he told the Morgan Stanley Annual Technology, Media and Telecoms Conference in Barcelona.

Most European telecoms companies have been reluctant to build fibre-to-the-home networks because of the high initial capital spending and are instead opting for fibre to the curb.

"If for last the 10 years, in every new building construction and every renovation in Switzerland, we had installed fibre, we would today have a 40 percent fibre footprint at literally no cost," Schloter said. A typical road was torn open every five years, and thus a carrier could get a good coverage in cities within that time just by being opportunistic about when and where to lay fibre, he said.

Schloter said this was also roughly the time that cheaper fibre-to-the-cub deployments, which use copper wires to bridge the final distance from street cabinets into homes, could withstand competition from upgraded cable TV networks.

KPN's (KPN.AS) chief executive, Ad Scheepbouwer, told the Morgan Stanley conference that the Dutch telecoms group would test the business case both for fibre to the home and fibre to the curb in five different cities each in the first half of 2009 and then decide how to continue.

Equipment maker Alcatel-Lucent (ALUA.PA) said carriers who wanted to hold competition from cable TV operators at bay would continue to invest, particularly in North America, but also in the Netherlands, Belgium or France.

"Some projects might be actually delayed, but we strongly believe that the migration from a copper-based network ... will happen," said Remi Thomas, Alcatel-Lucent's head of investor relations.

BT Group, which plans to build a mix of fibre to the home and to the curb, said it had so far not seen huge demand.

"It's not entirely clear to me that consumers are willing to pay large amounts of money ... for more speed. It's not clear what the applications are," BT CEO Ian Livingston said.

"It is an investment for the future, rather than for the present." (Additional reporting by Georgina Prodhan, editing by Will Waterman)