When implementing a broadband project, four key strategy choices that influence the evolution and success of the project have to be made. The choices of infrastructure types, investment and business models and financing tools should support the achievement of the goals defined in the broadband plan.

Flow chart Guide for high-speed broadband investment: 4 key strategic choices

Choice of the infrastructure type

When planning a broadband project it is important to understand the different technical levels of infrastructure, technology and network design in order to make a choice over the right infrastructure type for your regional broadband network. The decision over infrastructure depends on a number of factors including:

  • the implications concerning the physical fundamental properties of the infrastructure (i.e. the medium);
  • the level of ambition in the region considering the types and number of services planned;
  • considerations about effects on the attractiveness and competitiveness of the area;
  • the topography, population density and future development plans.

Choice of the investment model

Four major investment models are suitable for broadband investment:

  • direct investment through a publicly-run municipal network model;
  • indirect investment through a privately-run municipal network model;
  • the community broadband model;
  • operator subsidy model (gap-funding).

The choice made here will greatly affect the role of a municipality or a region and thus define the influence of the public authority on the broadband infrastructure project.

Choice of the business model

The business model describes the roles of the different actors in a broadband infrastructure project that are active on different network layers: passive infrastructure, active infrastructure and services. Respective actors or carriers will be matched according to the needs of the municipality or region. This can result in different business models: open networks with public and private actors in different roles or in vertically integrated models with only one (mostly incumbent) actor for all three network layers. Sometimes the choice of the model is limited due to regulations.

Choice of the financing tools

The different financing tools and models available for public and private investment in a broadband project need to be considered for the fourth key strategic choice. A sustainable financing concept should ensure an adequate financial coverage for building and operating the infrastructure.

Revenue based financing for running projects, private capital, bank loans and bonds, public funds and community financing are amongst the main financing tools. Moreover, private investments can lead to financial stability and an improvement of credit rating of the project. In areas where the market fails to invest due to unprofitability, state aid can be used following the specific conditions set within the EU State Aid Guidelines.

The last step would be to develop a concrete action plan involving all different aspects of the implementation including the roles of the different actors, cost and revenue estimations, and the monitoring of the execution and running of the project.

Published: 
23 April 2015
Last update: 
24 August 2017
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