According to Rudolf van der Berg over on Internet Thought, the FTTH effort in the Netherlands has run into a little snag. What snag? Oh just that little thing called money. The buildout is supposed to cost some $4B, however the partners KPN (NYSE:KPN, news) and Reggefiber were supposed to contribute only 25% each. The rest was to come from the banks, and of course we know that banks all over the world have amazingly re-learned the word 'no' (or in this case perhaps 'nee') with a vengeance.
I haven't said much about the FTTH effort in the Netherlands, mainly because I haven't followed it that closely and don't really understand the Dutch regulatory environment. But I have to wonder though just how big a surprise this could possibly be. Raising $2B right now is only possible for those who don't actually need it, such as Cisco Systems (NASDAQ:CSCO, news, filings). Oh, and of course those lucky enough to actually be banks with no money who are deemed too big to fail.
So what now? "Local governments and pension funds"? I don't know how it is in the Netherlands, but here in the US state and local governments are facing huge revenue shortfalls. And pension funds, at least the non-pyramid-scheme ones, well those aren't exactly investing in new construction either. I will be amazed if they can find much gold in those pockets.
If anyone asks me (and they won't), I would suggest the clwr route: make the buildout a moving target. Fiber doesn't need to be everywhere to be valuable, if you can only get $2B plus small tranches periodically, then build what you can with that and prove its value by the cashflows generated. The situation has drastically changed, so must the plans.
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