Omdia view
Summary
As many FTTP rollouts mature and subscribers migrate from copper to fiber, there is a growing emphasis on phasing out copper networks. This shift could deliver various financial benefits to operators, such as lowering operating costs by eliminating the need to manage both copper and fiber networks simultaneously. Reduced operating costs could include lower energy costs and a reduction in the need for some vendor maintenance contracts. Furthermore, copper decommissioning could present revenue opportunities, including the sale of redundant central offices that are no longer needed thanks to the extended reach of PON FTTP networks. A less explored consideration is the potential revenue and profit gains for operators through the extraction and resale of copper from decommissioned networks.
Profitable recovery of copper will not be possible for all operators and does involve costs
To determine how much profit operators could make from recovering and selling copper from their networks, it’s important to note that recovering copper profitably may not be a viable option for all operators. Recovery costs will be significantly higher for those without ducts and where copper is buried directly. It is not surprising then that Dutch incumbent KPN has noted that copper recovery is both expensive and challenging because its copper network is directly buried and not in ducts. Even for operators where copper resale is more feasible, there are still costs involved in the extraction, recovery, and processing of the material. Considering these expenses, specialized asset recovery firms have estimated that operators could achieve a 30% profit margin on the revenue generated from copper sales.
Real-world examples show copper can potentially be recovered and sold at a profit
We can draw on examples to estimate the potential profit windfall for operators of recovering and selling copper from their networks. Israeli incumbent Bezeq sold copper between 2010 and 2014, which was possible thanks to its nationwide FTTC rollout. Bezeq’s copper sales demonstrated that the segment of the network from exchanges to street cabinets that has large copper bundles holds value for operators. By the end of 2012, more than halfway through the copper sale process, the company anticipated copper sales worth NIS205m ($53m). At that time, there were around 2.6 million total premises in Israel. Using the 30% margin quoted by asset recovery firms, this gives a total profit of around $15.9m from copper sales or $6.1 per premises.
In New Zealand, wholesale-only fiber operator Chorus has said it intends to completely decommission its copper network and is conducting an ongoing copper recovery trial. The operator expects to generate net proceeds of N$30–50m ($17–29m) from the process. This is equivalent to around $6.8–12.1 per premises in New Zealand. On average, copper prices were around 17% higher in New Zealand in 2024 than during the period Bezeq was selling copper, which may explain the slightly higher potential profits in New Zealand.
Placing potential profits from copper sales in the context of FTTP rollout costs
FTTP costs per premises passed vary hugely by country but in a mid-cost European market figures of €500 ($543) are plausible. As a result, if copper recovery proves feasible in such cases, the resulting net proceeds could account for a low single-digit percentage of FTTP costs per premises passed. In short, profits from copper sales can be sizeable but will only be a small percentage of the FTTP costs per premises passed. Overall, it is essential that operators examine closely whether copper recovery and resale is a viable option in their particular case.
Appendix
Author
Stephen Wilson, Senior Principal Analyst, Broadband Access Intelligence Service
