The retirement of copper is now well underway as the speed of the fibre rollout intensifies. The process varies significantly country-by-country and will take longer to complete in some markets (from as little as two years to more than a decade). In several countries, while the process has been initiated (or at least announced) there is still no deadline by which it should be completed.
There has been a high degree of regulatory intervention in the retirement process to preserve competition and ensure a smooth transition, but this has not been without conflict. Regulators commonly require migration products to be made available but the approach to defining these products has varied significantly. In two cases FWA has been part of the solution.
The protection of vulnerable consumers is paramount. Fibre will not support some services that depend on the old PSTN network, such as personal care alarms and passenger lifts. Addressing these issues will require cooperation between stakeholders and communicating with consumers in a timely way. So far this has not been seen as a major obstacle to copper retirement.
The environment will certainly be one of the biggest winners from the retirement of copper. Fibre networks are more energy efficient (consuming about three times less energy than the networks they are replacing according to some estimates) and also space-saving. A fibre network can serve the same number of customers with a quarter of the number of exchanges needed for a copper network.
Copper retirement is now well underway, though in many countries there isn’t a clear deadline for its completion
Across much of Europe, by the end of this decade copper networks will be a thing of the past. As operators continue to make progress with the rollout of full-fibre, retiring the legacy copper networks is both beneficial and necessary. The retirement process has already been announced in four of the five largest European countries, with the notable exception of Germany. Perhaps unsurprisingly, Telefonica in Spain was the quickest off the mark in 2015, reflecting the country’s early full-fibre roll-out. TIM in Italy submitted an initial “decommissioning” plan in 2017. In 2019, Orange in France, Openreach in the UK, KPN in the Netherlands, and Telenor in Norway all announced their plans.
Timeframes and deadlines to complete the retirement process vary widely (see Figure 1) – mainly due to the circumstances of each market. This means that in some countries the process will take as little as two years, whereas in others it is expected to take as many as ten. So far only in some cases have clear deadlines to complete the retirement been set. For example, Orange in France is running a pilot scheme but will only officially start in 2023, with a view to finishing in 2030. In the UK, no date has yet been set for the completion, which could be sometime between 2027 and 2030 (depending on when full-fibre rollout is completed).
Regulatory intervention has also slowed down the process in several cases. In Norway, Nkom has decided that Telenor must keep its copper network active until September 2025 rather than the end of 2022 as originally planned. In Italy, TIM’s plan will only be a partial retirement (about 60% of TIM’s 10,000 exchanges) to be completed in 2023. In the Netherlands, legal disputes surround the planned start date of 2023, and the regulator ACM could yet make new rules when it reviews the wholesale broadband access markets next year.
There has been strong regulatory oversight, but no common approach has emerged
Regulators have intervened significantly in the retirement process so as to preserve competition and ensure the transition is a smooth one for consumers. The principal risk being that alternative operators may not have sufficient time to migrate to a new wholesale product to serve their customers, or that they may have to pay a significantly higher wholesale price which gets passed on to consumers. To avoid these pitfalls, regulators have generally mandated notice periods for the retirement, and required operators to offer migration products to help the transition.
Notice periods vary widely across countries, and also depend on the competitive conditions of each area. In general, where there are no alternative operators in an exchange, notice periods are significantly shorter (between 1 month and 3 years) than where LLU is still in use (between 7 months and 5 years). The longest notice period was imposed on Telefonica in Spain, which initially had to notify the closure of LLU exchanges five years in advance. However, recognising the widespread availability of FTTH, the CNMC recently shortened the notice period to two years.
The availability of migration products is equally important. These are generally fibre products with speeds and prices similar to the copper products being retired, which operators have to make available for a certain period of time. Not all regulators have fully defined the characteristics of the migration offers. For example in France, ARCEP set criteria to assess whether Orange is providing access seekers with suitable alternatives, and in the Netherlands the ACM simply required KPN to provide a ‘reasonable alternative’. On the other hand, regulators in Italy, New Zealand and the UK have been more prescriptive in defining the requirements of these products, and in Norway, Nkom is currently following a similar approach.
Experience in the Netherlands suggests that the absence of migration offers could lead to undesirable market outcomes. Here, regulation of wholesale broadband access has recently fallen away. T-Mobile is challenging KPN’s copper retirement plans in court, having found that without a migration offer it lost a significant proportion of its customers as a result of a sudden increase in prices.
Meeting the needs of vulnerable customers must be a priority
There is an obvious incentive for operators to move customers from copper to fibre networks since the sooner the migration is complete, the sooner retirement can be completed. There are ongoing efforts to communicate the benefits to all consumers of fibre to expedite that switchover, however both operators and regulators are mindful that particular attention will be paid to vulnerable customers – particularly where some functionalities of the copper network could be lost.
Retiring the copper network means that some services that depend on the PSTN network will no longer be supported. Personal care alarms, some passenger lifts, and some card machines could all be problematic to replace, as well as some monitoring systems (including flood defences) and phantom powered helpline phones for the elderly or vulnerable. Addressing these issues will require cooperation between stakeholders, ensuring adequate solutions are in place and informing consumers of how the retirement of copper affects them. Vulnerable consumers are at risk of being particularly affected.
So far, regulators have not considered the provision of these services to be a significant obstacle for the retirement to go ahead, since it is likely that suitable alternatives will eventually become available. However, communicating with consumers will be key to ensure a smooth transition. Across the countries we observed, differences emerged with regard to the best route to do so. For example, in New Zealand the Commerce Commission leaves Chorus to tell consumers about the whole retirement process, including information on legacy services that may not work. However, alternative operators warned about the confusion that could be generated if customers were contacted by multiple parties. In the UK, industry considers retail providers to be the most appropriate channel. There have also been calls for public information campaigns similar to those for the switch from analogue to digital TV.
The retirement of copper has the added bonus of helping the environment
The transition from copper to fibre should also mean greener networks in the longer term. Both Telefonica in Spain and Telenor in Norway have been vocal about the energy savings as well as the incentives to the circular economy. By the time Telefonica hit the milestone of closing 1,000 copper exchanges in August 2021, it had recycled 7,140 tonnes of electrical and electronic equipment waste; reused more than 128,000 cards in its network, and saved around 1,000 GWh (355,000 tonnes of Co2, equivalent to planting six million trees).
Fibre also takes up less space than copper. A single fibre only exchange can serve the same number of premises that currently require four copper exchanges, with fibre technology occupying only 15% of the space of copper. Telenor expects to save 100 GWh per year of electricity, and 400,000 m2 of indoor space as a result of the retirement.
Research published by Ofcom refers to data from EU countries plus UK, Norway, and Iceland to show that deployment of full-fibre infrastructure could result in 88% less greenhouse gas emissions per gigabit in Europe, compared to the mix of copper and cable technologies in use in 2008. The emissions estimates were based on electricity consumption and therefore could also have operational cost benefits for operators. In 2019, the French regulator ARCEP noted that fibre consumes on average a little more than 0.5Watts per line, which is about three times less than ADSL (1.8W). The energy consumption of these technologies is fairly independent of the uses made of them, which means replacing copper with fibre will remain greener even as data usage increases. A further argument to complete the retirement of copper and embrace a technology with better performance, reliability, and environmental impact.
