The document summarizes three significant municipal and regional fiber network initiatives in Spain: Asturias regional network, Viladecans municipality network, and Xarxa Oberta regional Catalan network. The Asturias initiative used public funds to build a FTTH network covering 57,832 homes across 46 municipalities at a cost of 47.5 million euros. Viladecans developed its FTTH network under the private investor principle with 688,000 euros of funding covering 2,535 homes. Xarxa Oberta is a 105-municipality Catalan regional FTTH network costing 85 million euros to connect 1,040 government sites through a public-private partnership model.

1. Workshop on Municipal Fiber Networks
Ghent, October 24th 2011

2. About our company
• Aggaros is an International consulting company that offers solutions
of business, strategy and technology in the environment of the
telecommunications and information systems.
• We apply our experience along all the life cycle of a project.
REGULATION
SOFTWARE NETWORK AND
PROJECT FEASIBILITY TENDER SOLUTIONS
STRATEGY SUPPLY SERVICES
CREATION PLAN MANAGEMENT
CONSTRUCTION MANAGEMENT
PROJECT MANAGEMENT
We work with public administrations and stakeholders to define and
implement the best strategy for the Optical Fiber network
development and management.

3. • Spanish people pays the most expensive
access to the traditional BB in Europe area

4. The most expensive broadband on OCDE
LA VANGUARDIA - Tuesday 28th June 2011

5. NRA will adopt measures to reduce the
gap with other EU countries
3th May 2011
“There are competitive offers in the market, but the Telefonica prices are higher that the
Europe average. We need to regulate de wholesale prices as the key to improve the end
customer market prices ”

6. BB access prices are 21% higher than
the best offers average on the EU
Source: CMT June 2010, Comparativa Int. de ofertas Comerciales EU/España

7. Best offer in EU 2 to 10Mbps
No one is the incumbent
Source: CMT June 2010, Comparativa Int. de ofertas Comerciales EU/España

8. Best incumbent offers in EU
2 to 10Mbps
Source: CMT June 2010, Comparativa Int. de ofertas Comerciales EU/España

9. • And regulation is not enough

10. The most significant measures
• Broadband wholesale access service up to
30Mbps.
– Obligation to supply BB wholesale access services (up
to 30Mbps) to all new entrant operators.
– Transparency obligation on BB wholesale service
supply.
– Open a public offer cost oriented.
– No discrimination obligation on BB wholesale service
supply.
– Obligation to sent to the CMT (ANR) the BB wholesale
offer quality parameters.

11. Regulation measures do not succeed
on NGA development

12. Xarxa Oberta
State Aid N407/2009 EU Resolution
• State Aid is the appropriate instrument
(97) Demand-side measures in favor of broadband could be an
instrument of public intervention. However, these measures do
not solve the illustrated problems on the supply side. As regards
regulation, despite its crucial role in ensuring competition and
supply in the market for electronic communications, evidence
shows that in some areas of Catalonia regulation has not fully
been able to ensure effective competition in some of the markets
for electronic communications and has not led to sufficient
investments to bridge the digital divide affecting certain areas.
Regulation is, indeed, a necessary, but not a sufficient
instrument for the development of broadband services …

13. • Regional and municipal initiatives

14. Different typology of public administrations
initiatives.
• Public funds direct to operators
– Galicia
– Plan avanza
• Public operator creation
– Asturias
– Barcelona 22@
– Navarra
• PPP – Public Private Partnership
– Extremadura
– Xarxa Oberta
– Consell Comarcal del Maresme
• PIP – Private Investor Principle
– Viladecans

15. Municipal and regional initiatives
1
Operational Networks
1. Asturcon - Asturias
1
3 2. Viladecans
2
2 3. Xarxa Oberta
3
4. 22@
5. Cablex Extremadura
6. Miguelturra
7. Quintanadueñas
8. Ribaroja
Projects
1. CC Maresme
2. Menorca
Source: FEDEA Observatory of NGN in Spain. August 2010

16. • Three cases:
Asturias,
Viladecans and
Xarxa Oberta

17. Asturias situation - 2004
• 1,1 M Inhabitants, 490 k homes.
• Services and Industry.
• Internet access penetration: 25,6%.
• Broadband Internet access: 55,6%.
• 12 Broadband lines per 100 inhabitants
• 3 Mobile Operators, covering >95%
population
• 2 Main Wireline Operators: Telefónica
and Telecable.

18. Asturcon – Project Scope
Asturias Viladecans Xarxa Oberta
3 Services providers
Geography Regional network • Telecable:
Municipality www.telecable.es:
Regional
• RF TV: Over 40 channels
Typology Public funds for rural Private•Investor POTSState Aid – PPP
Voice using
areas Principle High Speed internet: 4Mbps, 10Mbos and
• - PIP
20Mbps
Technology FTTH FTTH Gb Ethernet
Municipalities 46 • Adamo: www.adamo.es :
1 105
• High Speed Internet: 20M/100Mbps and
Investment 47,5 M€ 688.223.-€
100/100Mbps 85 M€
Coverage 57.832 HP • VoIP2.535 HP -----
Customers 9.625 • Orange: 492
www.orange.es -----
Penetration 17% 19,4% -----
One unique portal for customers and ISP:
http://www.gitpa.es/en/the-asturcon-network/suppliers-and-services.html .

19. Asturcon - Project Economics
Average subscriber penetration
35,0%
35,0%
34,7%
34,5%
34,2%
33,8%
33,2%
32,5%
31,8%
30,6%
29,3%
27,8%
25,9%
23,8%
21,4%
18,6%
18,2%
17,0%
14,8%
13,4%
2007
2008
2009
2010
jul-11
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Customers penetration over the total homes passed.
Number of homes passed increase in years 2010 and 2011.

20. Viladecans Situation – FTTH coverage

21. Three most significant initiatives
Asturias Viladecans Xarxa Oberta
Geography Regional network Municipality Regional
Typology Public funds for rural Private Investor State Aid – PPP
areas Principle - PIP
Technology FTTH FTTH Gb Ethernet
Municipalities 46 1 105
Investment 47,5 M€ 688.223.-€ 85 M€
Coverage 57.832 HP 2.535 HP -----
Customers 9.625 492 -----
Penetration 17% 19,4% -----

22. Viladecans - Project Scope
• The Viladecans local government develops the project
under the Private Investor Principle, considering the
following circumstances:
- VIGIP, the public company that manages the municipality
projects, receives 688.221€ as main capital.
- Fixes a 6,88% WACC required and a IRT minimum.
- All funds supplied should be returned in similar period like a
private investor.
- VIGIP will cover the peak financing in the capital market
- VIGIP as infrastructure operator pays to the local government for
the use of municipal infrastructures (essentially ducts and right of
way) the same price than other private operators.
- Multifiber architecture network
- Two ISP: Adamo and Orange
- Adamo pays for capacity. (Model MN2)
- Orange, rent dark fiber circuits. (Mode MN1)

23. Viladecans - Project Scope
• The Business plan considers the following parameters.
Concept Value
Anual Consumer Index Price increase 2,8%
Taxes 18%
Receiving payment period 30
Payment period 30
Taxes over company profit 25,00%
Interest on available cash 1,50%
Bank credit interest 3,50%
WACC 6,88%

24. Viladecans – 2011 situation
• After the first 6 months of operation, the results are better than the
initial forecast on the following parameters
Forecast May 2012 Results Oct 2011
Penetration 16,5% 19,4%
Total customers 418 492
IRT 10,69% 12,17%
ANV 253.849 381.218
Mix of services 70% MN1 / 30% MN2 43% MN1 / 57% MN2
Operating cost 20% lower

25. Three most significant initiatives
Asturias Viladecans Xarxa Oberta
Geography Regional network Municipality Regional
Typology Public funds for rural Private Investor State Aid – PPP
areas Principle - PIP
Technology FTTH FTTH Gb Ethernet
Municipalities 46 1 105
Investment 47,5 M€ 688.223.-€ 85 M€
Coverage 57.832 HP 2.535 HP -----
Customers 9.625 492 -----
Penetration 17% 19,4% -----

26. Xarxa Oberta
Catalunya – Spain
Autonomous community in the Northeast corner of Spain
Wealthy Spanish jurisdiction
Area: 32.106 km²
Population: 7,3M of inhabitants
947 municipalities and 42 counties, Barcelona is the capital
GDP (Gross domestic product) Y2010: 209.7273 M€
GDP per capita (Y2009): 26.831 €
Companies: 619.678 (Y2010)
Broadband Access: 21 subscribers per 100 inhabitants (Y2009)
GENERALITAT OF CATALUNYA (Catalan Regional Government)
 The Generalitat is the institutional system around which
Catalonia's self-government is politically organized.
 Y2011 budget: 33.033M€
 Around 6.000 offices
 Around 180k public employees

27. Xarxa Oberta – Project Objectives
Build a PPP contract with private company for the development, construction
and operation of a local and urban backbone wide band optical network, to:
• Connect to optical transport level of and layer 2 Ethernet, the Generalitat
de Catalunya (Regional Government) 1.040 sites and,
• Take advantage of the excess of capacity of the Network to facilitate the
connectivity for the wholesale market.
Specifically, the Project considers the following:
• Provide connectivity services to the public regional administration actual
and futures sites in each municipality
• Have of a point of presence of optical fiber in the current and future
municipalities.
Contract Project Operations
Signature Start-up Start-up
Service Start-up Service Operations
Nov 2010 Jan 2011 Apr 2011

28. Deployment Plan and main issues
• PPP 20 Years connectivity
service contract.
• 5 Years deployment
• 1.040 sites
• 105 municipalities
• 1.234 Km existing
infrastructure included in
the contract
• 586 km network to be built
• Total network: 2006 km
• Total Contract Value:206M€
• 85 M€ Investment
• Wholesale services on open
access scheme

29. Key questions on Xarxa Oberta project
• How will be the project executed?
– Under a Public Private Partnership. Rent or Mortgage model.
• The state aid estimation.
– The existing public infrastructures evaluated as State Aid.
• The European Commission evaluation
– The Spanish administration presented de project to be evaluated by the
DGComp. Concluding that the project, even if it disturbs the competence is
compatible with the TFEU.
• Only NGA
– EC considers only the 4 main cities as black zones for NGN. 943 other
municipalities are considered grey and wite.
• Wholesale price services mechanism.
– According to the N407/2009 EC resolution prices should be fixed according to the
competitive areas.
• What if, the wholesale market is higher than the expected initially?. Over-
compensation mechanism.
– The contract includes overcompensation mechanism

30. THANKS FOR YOUR CONSIDERATION
Contact: palemany@aggaros.com