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October 17, 2012

Fiber Network Growth is 'Solid' across Europe and Globally, Studies Show



By Peter Bernstein
Senior Editor



There tends to be a lot of teeth gnashing about how service provider interest has shifted away from deploying fiber optic technology, particularly fiber-to-the-home (FTTH) to all things wireless. However, the just released study at the Broadband World Forum event by research firm DigiWorld Institute found that the number of FTTH/B subscribers during the first half of 2012 was “solid.”

Highlights of the study include:

  • Europe reported a 16.4-percent increase, to 5.95 million, in FTTH/B subscribers, while coverage also grew by 16 percent.
  • Lithuania (30 percent penetration), Norway (18 percent) and Sweden (14.5 percent) continue to head the list, and Spain despite economic problems  entered the Top 20 for the first time following 44-percent growth in subscriber numbers.


As the researchers noted, however, some large EU economies, including the UK and Germany, “are still conspicuous by their absence.”

"Key countries absent from the ranking may miss out on their chance to build a sustainable future for their citizens," said Hartwig Tauber, director general of FTTH Council Europe. “Additional efforts are required to ensure Europe reaches the Digital Agenda 2020 broadband targets."

Point Topic weighs in

There was also interesting news from research firm Point Topic who tracks global broadband deployments. Its latest survey shows that the number of fiber lines of all types almost doubled across Europe in the last 12 months.

The latest quarterly figures from Point Topic and The Broadband Forum (News - Alert) show that the number of fiber lines has almost doubled across the continent to 7.5 million at the end of June 2012 – up from 3.9 million at the same point last year. 

Citing the U.K. as an example, it was revealed that: 

  • Fiber of all types has a 17.7-percent share of the broadband market
  • FTTH grew 4.6 percent in Q2 – following growth of 5.5 percent between January and March – while FTTx grew 3.9 percent – following growth of 5.1 percent in Q1
  • FTTH, however,  still only accounts for 2.8 percent of the overall market in the U.K., while FTTx accounts for 14.8 percent
  • FTTN+VDSL2 technology has seen growth of 7.7 percent and 6 percent in the U.K. during the first two quarters of 2012


The report concluded that: “In other words, operators are adding fibre but mainly when they can add it to a souped-up copper cable as well.”

“The economics of deployment and the gradual ramping up of bandwidth demand means it’s much more sensible for operators to re-use what they can when they need to,” said Point Topic CEO Oliver Johnson...FTTx lines in their myriad forms have almost tripled in the EU27 over the last 12 months...Growing from 1.2 million to 3.2 million lines gives an indication of how quickly the [FTTx] service is taken up when it’s offered and this is where we expect to see significant growth in the coming years.”

FTTH faces ROI challenges

The market penetration numbers for FTTH speak to a problem operators are facing around the world, only some of which can be attributed to economic sluggishness. The reality is that depending on a number of factors, particularly the condition of existing copper plant, the return on investment (ROI) for ripping out copper and replacing it with FTTH solutions poses a big hurdle. This accounts for the interest in hybrid solutions and the attraction of VDSL2 deployments to meet current broadband demand in key markets. 

Indeed, the age and capabilities of copper in various countries dictates operator choices when coupled with competitive, revenue and regulatory considerations.

The real question is based on longer-term projections of the need for speed whether it is advisable for operators to bite the bullet and deploy FTTH instead of extending the life of copper based on a bet that if they build it, customers will come. In the case of Europe, despite the European Commission repeatedly saying it is hopeful that their package of measures to incentivise fiber roll outs will encourage accelerated deployment, viewed as critical for long-term European competitiveness, this is not and easy decision only made worse by the sovereign debt crises.

The Point Topic’s latest survey, which covers not just global broadband trends but also IPTV (News - Alert) subscriptions, is therefore worth a look. Wireless may get all of the headlines, but there remains a strong appetite for putting fiber in one’s diet.




Edited by Braden Becker
 
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