What are the most common challenges and pitfalls of FTTH cost-benefit analysis?

1 Data availability and quality

One of the main challenges of FTTH cost-benefit analysis is to obtain and use reliable and relevant data. Data is needed to estimate the demand, the revenue, the costs, the benefits, and the risks of FTTH projects. However, data may be scarce, outdated, incomplete, inconsistent, or inaccurate, especially in developing or rural areas. To address this challenge, you should conduct market research, surveys, interviews, and field tests to collect and validate data. You should also use multiple sources, methods, and scenarios to cross-check and verify data.

2 Network design and deployment

Another challenge of FTTH cost-benefit analysis is to design and deploy the network in an efficient and effective way. Network design and deployment involve many technical, operational, and regulatory aspects, such as choosing the topology, the architecture, the equipment, the standards, the contractors, the permits, and the quality control. These aspects affect the performance, the scalability, the compatibility, and the security of the network, as well as the time, the cost, and the risk of the project. To address this challenge, you should consult with experts, stakeholders, and authorities, and follow best practices and guidelines.

3 Cost estimation and allocation

A third challenge of FTTH cost-benefit analysis is to estimate and allocate the costs of the project. Costs include capital expenditures (CAPEX), such as network construction and equipment installation, and operational expenditures (OPEX), such as network maintenance and customer service. Costs also vary depending on the location, the terrain, the population density, the existing infrastructure, and the competition. To address this challenge, you should use realistic and updated cost models, benchmarks, and assumptions. You should also allocate costs properly among different parties, such as network owners, operators, service providers, and customers.

4 Revenue projection and pricing

A fourth challenge of FTTH cost-benefit analysis is to project and price the revenue of the project. Revenue depends on the demand, the market share, the customer retention, the service quality, and the price elasticity of FTTH services. Revenue also faces uncertainty and competition from alternative technologies, such as cable, DSL, or wireless. To address this challenge, you should use reliable and dynamic demand models, market analysis, and customer feedback. You should also set competitive and flexible pricing strategies, such as bundling, discounts, or tiered plans.

5 Benefit evaluation and valuation

A fifth challenge of FTTH cost-benefit analysis is to evaluate and value the benefits of the project. Benefits include direct benefits, such as improved internet access, speed, and quality for customers, and indirect benefits, such as enhanced social, economic, and environmental outcomes for communities. Benefits also have different types, such as tangible or intangible, private or public, short-term or long-term, and monetary or non-monetary. To address this challenge, you should use appropriate and consistent benefit indicators, metrics, and methods. You should also quantify and monetize benefits as much as possible, or use qualitative or multi-criteria analysis.