Optimal allocation of state aid funds for deployment of next generation broadband networks

This article analyzes a deployment of nationwide Next Generation Access (NGA) networks in Croatia, focusing on a support of state aid funds in cases where deployment cannot be profitably accomplished by operators in the market. The profitability of NGA networks in various geodemographical, technological, revenue and market scenarios is checked by means of incremental cost model. For unprofitable areas, several options for application of state aid funds are proposed, including a deployment of public networks. The proposed state aid options aim to optimize total amount of public funds that are spent, simultaneously fostering the maximum level of competitiveness of the operators in the market.