Perspective

The Whole Truth - how to

become a successful
wholesaler
September 2021
Rupert Wood
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© Analysys Mason Limited 2021 Contents

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1. Introduction

There are profound structural changes occurring in the fixed access market. The recent enthusiasm for private
investment in FTTP and other fibre infrastructure has made the relationship between infrastructure provision
and service provision looser, while at the same time fostering a larger and more commercially intense wholesale
market.

Operational autonomy for retail service providers (RSPs) historically entailed ‘climbing the investment ladder’;
service providers had to invest in ever-more active network equipment and ever-more physical infrastructure in
order to attain that operational autonomy. For the wholesaler this meant selling ever-simpler services.
Virtualisation of networks onto a software platform has enabled an alternative network-as-a-service approach
where autonomy and agility do not come at the expense of capex-intensity.

This paper, sponsored by Nokia, is about how to be a successful wholesaler. It assesses how new infrastructure
providers can best exploit the wholesale opportunity by providing a more active set of services, and thereby help
their customers overcome obstacles to timely, agile and effective use of fibre access infrastructure.

2. The changing shape of wholesale service provision

FTTP is rapidly becoming the principal fixed access infrastructure worldwide. Take-up on these networks has
increased to the extent that FTTP has become the default choice of infrastructure. In the race to build, new
infrastructure providers and new investors are cornering an ever-higher part of the total build. This is especially
evident in Europe.

New FTTP infrastructure providers come from diverse backgrounds:

• brand new investment often in association with one or more established retail anchor tenants
• utilities building on their own distribution infrastructure
• towercos diversifying into fibre access infrastructure
• operators extending from enterprise/transport fibre into access networks
• cable operators either replacing or supplementing legacy HFC networks

New FTTP infrastructure providers have a mix of commercial models ranging from vertically-integrated
operators, which monetise their networks only through their own retail channel, to wholesale-only, and some
with a mix of retail and wholesale. In addition to new players, some larger players, including incumbent
operators, have carved out some or all of their access infrastructure and taken on a co-investor to accelerate
build. On the basis of current arrangements, Analysys Mason estimates that by 2026 53% of build in Europe 1
(measured in premises passed) will be in the hands of alternative operators or carve-outs.

1 EU27 plus Iceland, Norway, Switzerland and UK

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Figure 1: Forecast FTTP build by operator type and overbuild, EU27+4 [Source: Analysys Mason, 2021]

300 1.35

250 1.30
Premises (million)

1.25

Overbuild ratio
200
1.20
150
1.15
100
1.10
50 1.05

- 1.00
2018
2016

2017

2019

2020

2021

2022

2023

2024

2025

2026
Incumbents Incumbent carve-outs
Altnets Total unique premises passed
Total premises Overbuild ratio

New investment in FTTP outside Europe is also stronger than it has ever been, and in many cases new emerging
market operators serve end-users that have not previously had any form of fixed broadband. In Latin America,
and in parts of the Middle East, there is an increasingly competitive wholesale FTTP sector.

This new investment has created an increasingly diverse and complex value chain in broadband access.

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Figure 2: The diversifying broadband value chain [Source: Analysys Mason, 2021]

The composition of the retail broadband access market is changing less dramatically than the infrastructure side.
Through fixed-mobile bundling, the shape of the retail fixed broadband market is intrinsically tied in many
markets to retail mobile. Cable operators’ enduring influence in TV distribution also acts as a drag. It is in
Analysys Mason’s view likely that many retail-only alternative FTTP operators will shift to a wholesale model
over time, not only because of the continuing market-power of the major players in the retail market, but also
because of the opportunity to increase monetisation by developing channels with smaller players. The model
they choose is most likely to be an open-access one, where the retail service becomes the anchor tenancy. In
addition, it is already clear that some cable operators will, should they upgrade from HFC to FTTP, shift to a
wholesale plus anchor tenancy model, adding to the burgeoning number of wholesale fibre plays.

The mix of services that new wholesale-oriented players offer is currently diverse, ranging from duct access
(sometimes at the behest of regulators) through Layer 1 fibre unbundling, the various flavours of bitstream
(VULA, aggregated Layer 2, and Layer 3) to pure resale.

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Figure 3: Wholesale services offered, selected alternative wholesale-oriented infrastructure providers [Source:
Analysys Mason, 2021]

Countries of Bits tream

I nfras truc ture Provid er Duc t ac c es s L1 unb und ling
operation (L2+L3)

A d amo Spain
CityFib re UK
Dawiyat Saudi Arabia
Deuts c h e Glas fas er Germany
d s telec om Portugal
Gagnaveita Iceland
Gigac lear UK
Nexera Poland
Onivia Spain
Open Fib er Italy
SI RO Ireland
Swis s Fib re Net Switzerland
Ufinet Latin America
UTOPI A Fib er USA
V umatel South Africa
Xp Fib re France
Fas tfib er Portugal
Fib erklaar Belgium
Glas poort Netherlands
TI M Fib erc op Italy

The overwhelming majority offers some form of bitstream access. A few were initially set up primarily to offer
Layer1 access, and their network topology included multiple splitter banks to accommodate unbundlers. Most of
these also offer bitstream access. None has voluntarily added Layer 1 unbundling capabilities to their network,
as adding this capability is typically expensive for the wholesaler and clumsy for the access seeker.

3. Wholesale and profitability

FTTP is, in raw capex terms and when measured against population, the single largest investment in telecoms
infrastructure since telephony itself. Maximising return on investment is critical. Success in wholesaling can
seem like a double-edged sword, and new FTTP players naturally face dilemmas / uncertainties about how
wholesaling affects payback.

Average revenue per line for retail-only is naturally higher than for active wholesale access, which is in turn
higher than for Layer1 unbundling. This will likely be offset by higher utilisations of premises passed should
any of these three basic models be adopted as the sole monetisation route.

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However, likely long-term margins do not simply rise with lower costs. Active access margins will tend to be
higher, despite the higher costs associated with installing and maintaining active equipment and the additional
cost of a wholesale billing platform. The entry-barrier for a retail service provider to install actives on Layer 1
FTTP access is usually around 15% retail market share. Players that have this share will have sufficient market
power to drive commercially negotiated wholesale prices down. Figure 5 provide Analysys Mason’s view of the
balance between likely long-term ARPL, utilisation of premises passed and margin.

Figure 4: Typical long-term EBITDA margins for different monetisation models [Source: Analysys Mason, 2021]

It is for this reason that wholesalers typically seek to nurture active access. The problem/opportunity for them is
how to extend utilisation of the networks so as to get both higher margins and higher utilisation.

New wholesalers face an obvious danger in any FTTP overbuild areas: they absolutely have to remain
competitive as wholesalers, often competing against players with years of wholesale experience.

There is, however, also a danger in non-overbuild areas: large wholesale players will want drive down on price
buying a lower-spec service (Layer 1) and then use it as input to their own connectivity platform. New
wholesalers will want RSPs to come straight to them rather than via this kind of intermediary.

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This means, in either case, having a sufficiently attractive and flexible offer:

• to encourage larger players to become tenants

• to be able to foster a new retail market structure less exclusively framed by larger players driving down
prices in exchange for volume
• to exploit new monetisation routes for the networks.

4. Retail service provider pain-points

Increasing demand for FTTP creates an opportunity for any wholesaler that has first-mover advantage in any
given location. However, the need to install a completely new network also creates additional pitfalls between
the beginning and the end of the customer provision journey. Wholesalers have to minimise disruption,
neutralise potential pain-points and meet RSPs expectations at every stage of the journey.

Service providers’ pain-points represent opportunities for new wholesalers to differentiate and to win. Longer-
established wholesale players may not have the same level of flexibility or commercial openness as new
operators. In some cases, they will not be incentivised, until pushed hard, to open their networks to a particular
set of services that cannibalises existing revenue streams. They may have less flexibility over commercial terms
because of ongoing regulatory constraints.

Meeting immediate demand for FTTP

By the end of 2020, 41% of unique FTTP premises passed in Europe has an active connection. We forecast that
this will rise to 58% by 2026, but it is important to note that the growth in this ratio is constrained by the rapid
rate of build. Strong growth is also expected in other regions undergoing significant build-out (the Americas and
emerging economies in Asia-Pacific in particular), and we see clear early signals that FTTP is beginning to
disrupt cable operators.

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Figure 5: Active FTTP connections as percentage of unique premises passed, Europe, 2016-2021f [Source: Analysys
Mason, 2021]

140 42.5% 50%

40.8% 45%
120 38.2% 38.6%
35.3% 40%
100 31.3% 35%
76
Premises (million)

30%
80 67
25%
58
60
48 20%

40 41 15%
36
56 10%
20 46
30 37
22 5%
17
0 0%
2016 2017 2018 2019 2020 2021e

Active connections Unique premises passed, not connected Take-up rate

As FTTP becomes the norm for consumer and small and medium business (SMB) broadband access, the balance
of push and pull for an FTTP wholesaler is likely to shift in its favour. In this increasingly demand-driven
environment, an immediate imperative for RSPs will be to defend retail market share. The most immediate
opportunities for active FTTP wholesale lie among the smaller RSPs of the kind that have historically been
dependent on incumbent copper networks. Smaller players have greatly varying share of current retail
broadband markets. In addition to small service providers serving a national footprint, local wireless, LAN and
cable plays will often have to engage with rather than compete against any FTTP build. Some will also engage
to extend their footprint.

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Figure 6: Aggregate share of retail broadband access market of service providers with under 10% market share, 2020
[Source: Analysys Mason, 2021]

50%
45%
46%

44%
40%
Share of total broadband

35%
30%

30%
25%

26%

24%
20%

20%
15%

18%

14%
10%

12%

11%

3%
5%

8%

6%
0%

Belgium
UK

Italy
Austria

Ireland

France
Czechia

Germany
Sweden

Spain
Switzerland

Netherlands
Poland

Although many have disappeared through consolidation with fixed networks, mobile-only operators are another
category of players among which demand might become strong. 5G FWA can be used to build a broadband
base, but the huge disparities between fixed and mobile data volumes means that their cellular networks will be
filled with low revenue-per-gigabyte traffic. Even such mobile-centric stalwarts as T-Mobile USA are beginning
to experiment with FTTP access from third-parties, especially in urban areas where mobile networks are most
heavily used.

Pain-points in the wholesale customer journey to service activation

Wholesalers have to neutralise potential pain-points and meet RSPs’ expectations at every stage of the journey
from initial contracts to individual service activations.

• Having to negotiate with multiple infrastructure providers if FTTP build is fragmented geographically
is a major overhead and pain-point for RSPs. Creating a common connectivity platform across differently-
owned infrastructures would be one way to mitigate this problem without the additional burden of corporate
consolidation.

• Flexibility of commercial terms. Depending largely on their scale, RSPs need varying
financial/commercial models, pricing, contract length. This is a larger opportunity where incumbents have
some constraints because of regulation.

• Sharing marketing and demand aggregation overheads. While consumer and SMB demand for FTTP is
increasing, RSPs will want to share some of the overhead cost and effort of marketing FTTP such that end-
users understand they both want and need it. Sharing the cost of demand aggregation at a local level is also
important.

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• Rapid onboarding and right-first-time installation and activation. In a retail environment dominated
increasingly by online reviewing, this matters even more. Using advanced digital provisioning and service
assurance tools is an effective way of reducing the number of end-user touchpoints and the number of truck-
rolls.

• Dealing with property-owners. Getting permissions from landlords to enter properties and install lines is a
is a recurrent pain-point (the failure rate can be as high as 50%), and the existence of a reliable centralised
system for converting RSPs’ service orders to active subscribers is critical.

• Rapid approval of CPE. While most RSPs will not want to touch installation, the larger ones will often
want to use their own CPE, or to be able to customise operator CPE, and need a wholesale provider that can
accommodate this wish without major delays.

• Premium installations. Whole-home coverage is a major differentiator for RSPs, and many may want
installation of in-home networks as well as the installation of the line and ONT.

Service pain-points
Once a service is activated, RSPs face a further set of potential pain-points that indicate a need for further
flexibility and automation at the interface between wholesale infrastructure provider and retail service provider.

• Meeting rapidly evolving end-user demands. They will require more-flexible wholesale service provision
models. They need to be able to plug in new services as fast as possible, and they need the flexibility to
unplug if that is required.

• Service level assurance and troubleshooting. The rapidly increased prevalence of working from home has
created a need for SLAs not only among SMBs but also for residential connections.

• Additional network needs. Some (particularly larger players) may want to combine access to FTTP with
further network needs – for example mobile transport – and they will want a centralised system for ordering
and provisioning these more-complex needs.

Requiring the wholesaler always to be in the loop of such actions is an additional layer of complexity for an
RSP, which translates into both a time burden and a financial overhead.

5. Differentiating on bitstream

While bitstream may appear to be a fairly commoditised service, for the new player in an increasingly
competitive wholesale space, there remain several distinct ways to differentiate on the basic bitstream service.

Choice of technology
XGS-PON has established itself as the technology of choice for new fibre networks, and the next generation of
xPON technologies is emerging. 25GS-PON looks ready to be fully commercialised in 2022, and higher-speed.
evolutions up to 50Gbit/s and even 100Gbit/s are already under development.

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While use-cases for third generation access technology outside of mobile x-haul are embryonic, wholesalers
should not underestimate the marketing advantage of speed. A halo-effect applies in retail to a certain extent, but
it is more substantially true in wholesale. When competing against cable networks, newer optical access
technologies create substantial advantage. DOCSIS4.0 will reach in theory 10Gbit/s shared downlink and
perhaps 4Gbit/s-6Gbit/s uplink, and at considerable additional expense and effort. It is highly unlikely that cable
networks would extend into wholesale in areas where 10G or even higher speed fibre networks have overbuilt
them.

Aggregation, contention and QoS

Wholesalers can offer total flexibility around point of handover (PoH). Incumbent wholesalers often offer only a
subset of options in their network hierarchy.

For new wholesalers there is, in many markets, an opportunity to service B2B needs that lie somewhere between
dedicated Ethernet connections and mass-market broadband. Established players are often not incentivised to
address this gap: QoS options may be artificially limited, and the option of fully uncontended access at
equivalent speeds to the end-user path is rare.

SLAs/SLGs provided by established players for FTTP broadband may be limited to simple measures such as
provision and fault repair times; they do not often extend to other QoS measures such as packet loss, jitter or
latency.

Bitstream tariffication
With a few exceptions, alternative wholesalers generally have free rein to charge on purely commercial terms.
Most incumbent wholesalers are subject to some ex-ante price regulation, and most are also unable to
geographically de-average tariffs. These limitations offer new wholesalers obvious advantages.

Active wholesalers should also be alive to the spectrum of options between long-term commitments and
monthly rental. Likewise, most incumbent offers have charges for one or more of three key elements: the end-
user path, backhaul transport and port capacity at the PoH. There will be room to challenge on each of these
elements.

There is also clear room for disruption in some cases around the one-off tariffs for FTTP installations and the
tariffs for service activations. Some incumbent plays, realising that first-time installation costs are an obstacle to
take-up, have reduced these charges but have also shifted to charging more heavily for each service activation,
so, for example, subscribers pay a large activation fee each time they move house.

6. VULA as stepping-stone to NaaS

Historically, in Europe and other regulated markets, gaining operational autonomy meant ‘climbing the
investment ladder’. The access-seeker, having gained a retail foothold with ‘OTT’-type Layer3 services, would,
so the theory went, invest in ever-more network elements (transport, actives) and thereby buy ever-simpler
services from the wholesaler. It would, in theory, benefit from owner-economics and reduce its TCO.

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The arrival of FTTx networks (FTTC and FTTP) halted this direction of travel as it was generally uneconomic
to unbundle shorter copper sub-loops (and with vectoring increasingly technically difficult too), and technically
difficult to unbundle FTTP PONs. Virtual unbundled local access (VULA) on FTTx networks was a work-
around to this problem. VULA offers essentially sought to replicate, at an active layer, the kind of operational
autonomy that copper local loop unbundlers has hitherto enjoyed.

Figure 7: The ladder of investment and the opex-oriented alternative [Source: Analysys Mason, 2021]

Although local exchange (LEX) -located handover is one important feature of VULA, it is in fact one of four.

• Local access
• A high degree or full control over connection to end users (own CPE)
• Service-independence (i.e. not restrictions over what the access technology can deliver)
• Uncontended access

In fact, the local access option has not always in practice mattered. Some incumbent wholesale operators shifted
their PoHs to different locations in the network hierarchy. Telekom Deutschland, for example, offered PoHs on
its FTTC/VDSL network either at cabinets or at a small sub-set of LEXs. TDC also offered PoHs behind
DSLAMs and at a sub-set of exchanges. In both cases, significantly, it has been the more centralised options that
gained in usage, while PoHs deeper in the networks remained relatively unused. In other markets, for example
the Netherlands and the UK, incumbent VULA PoHs have been concentrated at a subset of LEXs.

It is by no means certain that wholesale FTTP access seekers in every market will follow the same path that
many took for copper (that is, towards physical unbundling and a more capex-intensive/owner-economics

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approach). In fact, in many regulated markets, layer 1 wholesale on copper has never been a large part of the
overall (wholesale) market. While the French model was set up to facilitate the physical unbundling of FTTP, it
is by no means certain that many other markets will follow the same approach, or that the retail service provider
market actually demands it.

Network-as-a-service open-access models enable an even high degree of operational autonomy than unbundled
access and regulated VULA typically offer, but this time with lower entry-barriers and lower capex-intensity.

7. Network as a service (NaaS)

Software defined access networks (SDAN) transforms the access network into a platform by abstracting
network functions and serving them up as software functions in a potentially cloud-native environment. It
enables the partition of network resources, including the aggregation / backhaul parts of the network, into
discrete slices. For a single operator, these might be tailored for distinct applications with specific requirements:
for example, a partitioned channel with guaranteed low-latency for its gamer retail customers, or a separate slice
for mobile transport to small cells.

The same principle can be applied to wholesale slices for third parties, so that network slicing is commercialised
as network-as-a-service (NaaS). NaaS has the potential to transform ‘access-seeker’ RSPs into full virtual
network operators (VNOs), each with a high degree of operational autonomy over its own set of virtual
resources. The result is that the process of provisioning wholesale services is given what is essentially a digital
experience makeover.

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Figure 8: Network as a service [Source: Analysys Mason, 2021]

This offers many clear advantages in terms of time to market for connectivity services and in terms of the ability
to tune these to customer’s evolving needs rapidly. The model also allows VNOs to integrate easily with
partners on the service side, and to provide application slices tailored for those specific purposes, so as to speed
up service innovation. This could serve to avoid multiple negotiations for access to content and applications.
Because entry-barriers are much lower, NaaS on FTTP could also foster a different kind of retail dynamic, less
dependent on a simple price-for-volume dynamic that fuels a race to the bottom on price for speed, and more
dependent on service differentiation.

There is perhaps a false perception that NaaS is suitable only for small players or niche use-cases. Rapid and
flexible access to fibre access (and of course to fibre x-haul) makes sense for larger mobile-focused players that
need to offload FWA traffic or that simply need a compelling fixed + mobile offer in a retail market increasingly
dominated by converged offers.

Tariffication of NaaS
The design of tariffing on an NaaS platform is vital to its success because NaaS implies a shift towards a more
opex-centric model with lower entry barriers. For all the advantages of time to market and service agility, TCO
will never be far from front-of-mind.

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NaaS tariffication needs to handle dynamism and must also accommodate operators’ demands for changing
network configurations. That means a mix of payment types, including some that are already familiar (such as
charging for Layer 2 VULA-type access), but also including payment on a usage basis for all or some of
resources. Despite, or perhaps because of, this agility, NaaS wholesalers will need to keep to a meaningfully
concise and clear catalogue of services.

Appropriate tariffication of network-as-a-service should serve to create additional value through sharing
resources and by enabling new revenue streams.

Figure 9: Value creation from sharing active networks [Source: Analysys Mason, 2021]

8. Beyond fibre access

Servicing the wholesale market for broadband FTTP – including transport – will be the core business for most
new wholesale fibre businesses. Put simply, it is worth more in revenue terms than other uses, and many players
from the older fibre metro/backhaul/transport areas may move into broadband. However, there are important
adjacencies with good growth potential in the coming decade.

Servicing mobile needs and creating mobile opportunities

One of the most important potential new sources of revenue is from servicing new and existing transport needs
of mobile networks. While existing macro-cell sites are mostly fibred up, 5G and virtual RAN create some new
requirements.

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3.5GHz 5G networks largely sit on the existing grid of sites, but they will eventually require more. While
individual operators may require more than 20% additional sites, the multi-tenant nature of towercos means that
probably no more than 20% more physical sites are likely to be required. Rural and road/rail coverage needs
may add to this.

More interesting, and of greater potential, are indoor enterprise small cells, whether installed by MNOs or third
parties (neutral hosts, private enterprise networks). XGS-PON and 25G PON technologies substantially lower a
major barrier to large-scale deployments. Wi-Fi currently services most of the needs for indoor enterprise
wireless connectivity, so it is best to understand enterprise cellular small cells as enabling an opportunity rather
than as meeting an existing need.

Virtualised RAN networks, where processing is more centralised, or even in the Cloud, require transport that
demands vastly higher bandwidth, and with much more stringent requirements for latency, than the aggregate
data traffic itself. There are capex cost-savings to be made in deploying this architecture, and densification
becomes less expensive, but only if sufficient high-quality and low-cost fibre is available. Next-generation PON
technologies have the potential to deliver just that.

5G FWA is an important part of many operators’ broadband plans, covering principally those areas where FTTP
is uneconomic. Given the asymmetry between the average traffic generated by a broadband connection and by a
mobile device (about 40x difference in most markets), mobile networks supporting FWA will require vastly
more capable backhaul.

Edge
Cloud computing is becoming ever more distributed to Edge locations, typically co-located on telecoms
infrastructure. Edge computing will be served by both mobile and fixed access networks. 5G standalone mobile
requires a distributed Edge, and the main public Cloud businesses are increasingly pushing deeper into networks
for their own purposes, in some cases as far as enterprise premises. This will require ever-more fibre links and
burgeoning amounts of bandwidth between the various locations.

Smart cities
Smart city initiatives have started to proliferate in the past decade, especially, but by no means confined to,
countries with a more top-down approach to economic and social development. It is beyond the scope of this
paper to enumerate the various and overlapping motivations behind smart city projects, but chief among them
will be:

• Municipal and utility efficiency (in particular, transport and energy)

• Economic development (improving the attractiveness of cities to investors)
• Quality of life (improving public safety, reducing carbon emissions, environmental monitoring, optimising
public and private transport).

In every case, the implementation of smart-city systems requires joined-up thinking. Assuming xPON for mass-
market broadband is a sunk cost, xPON architectures enable much less expensive fixed connectivity to dense,
multiple end-points (monitors, sensors, even just public Wi-Fi6 and 7) than would previously have been possible
with a dedicated municipal network approach. Electric vehicle charging represents a timely opportunity, and,
particularly in new build areas, substantial savings can be made by sharing the cost of power infrastructure and
the fibre infrastructure.

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Many smart city plans turn heavily on cellular or other wireless connectivity. Setting aside the point that all of
these will require, at some demarcation point, fibre backhaul, direct fibre access to stationary devices such as
video monitors has several key advantages over wireless.

• Buried or ducted fibre has a remarkably long asset life.

• Fibre will always have, when and as required, a bandwidth advantage.
• xPON systems require far fewer active elements; once deployed, they are less visually intrusive, and they
have far longer and more reliable reach than their wireless counterparts.

Smart cities can be seen as a further tenancy opportunity for active wholesalers, one that sits outside the box of
traditional wholesale to service providers, but which depends on the same slicing concept as NaaS. Furthermore,
it is a template for other more purely commercial densified deployments not only to, but within, enterprises.

9. Third-party infrastructure as input to the NaaS platform

One important further extension of the NaaS platform approach is that it can be used to integrate third-party
physical network resources onto a common software platform. This could be important in markets (for example
the UK) where alternative operator FTTP networks are numerous and fragmented. The creation of a common
virtualised connectivity platform across multiple infrastructures would bring benefits of scale; VNOs would
have to negotiate contracts with a single party and would thereby alleviate the pain-point of multiple contracts.
The establishment of such a platform would likely be less costly and less time-consuming than consolidation
through M&A.

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Figure 10: Longer-term options for fibre wholesale [Source: Analysys Mason, 2021]

A different approach, already well-established in Norway, is the establishment of common residential retail
service provision across multiple discretely-owned fibre infrastructures. Having a common and large-scale retail
service end may help in boosting consumer recognition and take-up. While this is a shift away from wholesale
in the residential segment of the market, it relies on the same abstraction as the wholesale platform and leaves
room for wholesaling in other market segments.

10. Conclusions and recommendations

New fibre infrastructure providers need quickly to capture the take-off in demand for full-fibre access. A
vertically-integrated approach is unlikely to fit well with the existing retail market structures. The question then
is what sort of wholesale service set is optimal. Offering passive wholesale access only will not maximise
margin, so the trick is to find a way of offering active wholesale services in a way that appeals commercially to
all retail market segments.

Active access, and in particular the full network-as-a-service approach, offers the wholesaler:

• A service set that allows service-providers to make a break from the costly and time-consuming ‘ladder of
investment’ model, and to move to a more opex-oriented approach while retaining a level of autonomy as
VNOs.

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• An opportunity to maximise return on investment by sharing infrastructure at an active layer, reducing the
risk of being reduced to a provider of unlit fibre.
• An opportunity to foster new retail market structures, gain new types of customers with varying
requirements, including multiple infrastructure requirements across fixed, mobile and enterprise.

The alternative fibre infrastructure landscape will in many countries become fragmented between different
investor-owners. Whether or not these networks are overbuilt, there will be a need for some sort of unified
approach between currently discrete networks. The network-as-a-service approach can be extended to
encompass multiple infrastructures and can be developed as a common service platform. This is ultimately a
simpler and neater approach than financial consolidation.

© Analysys Mason Limited 2021 10: Conclusions and recommendations

 The Whole Truth - how to become a successful wholesaler | 19

11. About the author

Rupert Wood (Research Director) is lead analyst for Analysys Mason’s telecoms
infrastructure research.

This perspective was commissioned by Nokia. Analysys Mason does not endorse any of the vendor’s products
or services.

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© Analysys Mason Limited 2021 About the author