Stockholm

IT-infrastructure

Stokab 2015

• Only PIP (physical, infrastructure

provider – right of way, duct and fibre)

• The purpose is to provide an open ICT-

infrastructure in order to secure a free

and fair competition regarding services

• Thereby also contribute to growth, jobs

and a sustainable development

• Owned by the City of Stockholm

• Initial cost £ 3 775

What is Stokab

• The public sector is responsible for

infrastructures including IT- infrastructure

• Infrastructure must be open to all players

on equal terms in order to create

competition at the service level

• The infrastructure must be provided

by a neutral player

• Non-discriminatory and transparent

pricing policies required

Stockholm´s principle approach

Stokab facts

• Owned by the City of Stockholm

• Founded in 1994

• Turnover £ 54 million (2014)

• Investment £ 7 million (2014)

• 100 employees

• Over 800 customers

• Over 100 Operators and SPs

Situation in Stockholm 2015• 100 % broadband coverage - wired and mobile

• Four 4G (LTE) networks (100 % coverage)

No 1 in the world – Stockholm 2009

• Buildings with 400 000 households have fibre-optic

by FTTH, which means speeds up to 1 Gbps

About 90 percent households

Nearly 100 percent companies

Price for households 1 Gbps (down and up)

200-250 SEK/month (£ 15-20)

Business model• Lease of fibre optic connections (dark fibre)

• Network open to all players on equal terms

• For the customer requirements (point to point, ring structure, star

structure - unlimited capacity - and Service Level Agreements)

640 fibres

Stokab - Opening the value system

STOKAB

Wireline

Broadband

Operator

Mobile

Broadband

Operator Real

Estate

Communications

Operator

Internet Service

Provider

Residential Customer

BusinessesPublic

Institutions

Economic Model• Non-recurrent fee + distance

• Fixed price defined areas

• In other areas of way

according to each case

• Discount:

volume + contractual period

• Financing:

earnings and loans

Investment 1994-2014

250

51

134 140

214

180

253

420

550

237

69

101

142

169

390

329

361

501

332

172

91

0

100

200

300

400

500

600

Total investment 1994-2014, 5 086 million SEK

Total investment £ 384 million

Income/profit after financial items

0

-119

0

-12

7

27

5260

42

-32

3

25

45

94

143149

168 171 174 175188

-150

-100

-50

0

50

100

150

200

250

199419951996199719981999200020012002200320042005200620072008200920102011201220132014

Cumulative profit 1 335 million SEK (£ 101 million)

Profit on average = 64 million SEK per year (£ 4,8 million)

• Acreo Swedish ICT

• Lower price for broadband

• Higher competition

• Precondition for the rollout 4G/LTE

• More jobs

• Increased property values

• Cost savings for the public sector

• More attractive city – Stockholm vs Copenhagen

16 billion SEK in socio-economic return

PwC - Cities of opportunity

Internet access in schools (best)

Broadband quality

(second best – Seoul)

Digital economy (best)

Stockholm’s top ranking is thanks to its well-developed ICT infrastructure,

with a high penetration of smartphones and high-speed connections such

as fiber-optic broadband and 4G/LTE.

The world's most connected city

• A political consensus at municipal level that ensured a long-term view at the project’s inception and continued support when things turned rough.

• A public shareholder that views the network as a public infrastructure rather than just a dedicated resource for its own needs, which has allowed Stokab to develop without excessive political constraints.

• A gradual deployment that focused first on revenue generating business needs to then finance residential roll out with the cash flow generated from the profitable and amortized business side.

• A guarantee of neutrality and non-competition with customers (by offering only passive services), which has attracted private service providers and other entities like real estate owners and managers onto the network.

• Non-discriminatory and transparent pricing as well as industry-grade processes.

The key elements of Stokab’s success

Benefits of the “Stokab model”• One infrastructure for all – The city considers

a fibre-network, as any other ground-based

infrastructure, as a public utility

• Reduce civil works

• Lower threshold for new company entries

• Lease dark fibre to a fair price

(fixed price defined areas)

• High security

• Customers will not have high investment

costs or costs for operations

• Customers can focus on core business

• Financing: earnings and loans

More about Stokab?

Document:

http://ssrn.com/abstract=2114138

Interview:

http://video.stockholm.se/video/773

2962/study-on-stokab-benot-felten

Seminar:

http://streamio.com/api/v1/videos/5

121e37111581e3f980094b5/public_

show

Socio-economic return

Document:

https://www.acreo.se/publications/s

tokab-en-samhallsekonomisk-

analys-sammanfattningAnnual Report:

http://www.stokab.se/In-

english/Arsredovisning/

Stockholm´s telecom history:

https://stokab.se/Documents/Nyheter%20bilagor/Stokab_eng.pdf