Fiber – a good investment for society

Acreo has carried out a feasibility study to evaluate the socio-economic return of FTTH investment in Sweden, on behalf of the Swedish government’s Broadband Council (Bredbandsforum). The study has investigated the fiber-based broadband effects on economic growth, both at a national level and in individual municipalities. The result demonstrates that a fiber investment generates economic gain in less than 3.5 years.

The greatest impact is found for the public sector where the result indicates that communication related costs can be cut by 30-50% thanks to the availability of fiber. The study also shows that the municipalities that have invested in fiber will have a positive economic growth in the form of increased employment and a positive population trend.

“A particularly interesting finding is that the deployment of new fiber-based broadband networks in Sweden has a clear impact on economic growth and population development” says Crister Mattsson Senior Advisor at Acreo. “In order to stimulate local initiatives this needs to be clarified with the local authorities, too often they are not aware of the positive effects of fiber investments.”

Acreo has performed a statistical analysis that links the effects of fiber investments, spread over a four year period, to the specific socio-economic factors. The return of investment was then calculated year by year, up to five years after the investment. The study also estimates the investment needed to connect the remaining households that do not have access to fiber. The analysis is based on data from Statistics Sweden (SCB), Swedish Post and Telecommunications Authority (PTS), meta-analysis, Acreo’s own research in the field, and on extensive interview data where Acreo has conducted both surveys and in-depth interviews with local governments, telecom operators and network owners.

“The actual return is expected to be greater than what is calculated in the study when indirect and induced economic effects are likely to increase over time and also due to effects not currently quantifiable” says Marco Forzati Senior Researcher at Acreo. “Therefore, to be able to calculate the true value of an investment, a more comprehensive method needs to be developed.”

Traditionally, the success of broadband investments is primarily evaluated from a telecom perspective. For society, however, economic growth and the impact on the public sector are more important success factors for the assessment of the investment.

“This feasibility study is the first step to better understand the real social impact of broadband investments in Sweden. It provides a good basis for further discussions in the efforts to spread knowledge of broadband-related issues and its benefits for society” says Patrik Sandgren at the Government Broadband Forum.

For further information please contact:

Crister Mattsson, Senior advisor at Acreo, +46 (0)8-632 77 92; crister.mattsson(at)acreo.se

Marco Forzati, Senior scientist at Acreo, +46 (0)8-632 77 53, marco.forzati(at)acreo.se

Press Contact:

Tove Madsen, Marketing and Communication
+46 (0)8-632 77 86, tove.madsen(at)acreo.se

About Acreo

Acreo is one of Europe’s top research institutes providing breaking edge results within the field of electronics, optics and communication technologies. Turning academic research into commercial products, Acreo offers value-adding technology solutions for growth and competitiveness in industry and society. The types of assignments are ranging from feasibility studies, long term research projects, prototyping and small scale production, to verification and testing. Acreo also supports small and medium sized companies with technology transfer, business networks and financial advice. Acreo is part of Swedish ICT, and has 145 employees located in Kista (headquarter), Norrköping and Hudiksvall, in Sweden.

About Acreo Broadband Technology

Acreo Netlab is active in the field of Broadband Technology; our activities span core networks through access networks to home networks. We address network design, optical transmission and IP protocols, we measure how networks are used and how network performance influence quality of experience of important services such as video and IPTV. We perform technical research and development; we drive standardization and policy issues as well as analyze business models.

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One response to “Fiber – a good investment for society

  1. Now the problem is how to convince our illustrious leaders? How can we convince a county council in charge of allocating public money to invest in a futureproof fibre solution? All ideas welcome! In the UK the pattern is emerging that taxpayer’s money is going in to enabling cabinets, which give slightly faster broadband to those who already have a good connection and nothing to those on long line lengths, which means that in another few years we will be very much behind the rest of the world.

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