Despite the hefty costs associated with FTTH (fibre-to-the-home) deployment, network operators worldwide have made the business case and are now serving their customers with ultrafast, gigabit speeds.
Whether it’s incumbents gradually upgrading their legacy infrastructure or new entrants laying down their own fibre network, the industry has concluded: fibre is the way forwards.
During our research for the Broadband World Forum programme, we spoke to hundreds of operators on the challenges and opportunities presented by FTTH. Many explained the difficulty of supporting a credible business model to keep the ball rolling on FTTH rollouts; others outlined the challenges of competing against new market entrants.
So along with the competitive advantages of FTTx (fibre to the home, cabinet, curb, distribution point or anything else you can reach!) comes a potential new wave of challenges for operators to tackle.
Competition is Fierce
Competition is the obvious hurdle which springs to mind. Once upon a time telcos and operators could simply differentiate themselves through speed, and would win over subscriptions based on this. Customers were drawn in by the bigger numbers and the promise of unlimited data. But what happens when everyone in the market is offering those ultrafast speeds?
Sweden is a great example to discuss here, as a country where there is huge fibre network hype and very strong competition among operators. Sweden was one of the first countries to deploy FTTH networks and now boasts more than 22% of households in the country subscribe to FTTH, one of the highest penetration rates in Europe.
But now companies like Skanova (the broadband access arm of TeliaSonera) are forced to compete in an industry where many are offering fibre services. How can they possibly differentiate? It seems that this is still a question left to be answered. In many cases they are trying to be the first-to-market for that USP advantage but that can surely only last so long.
Scream if you want to go faster
And the thing with fibre is that it doesn’t just stop when you reach gigabit speeds. Oh no. To explore one example, outside of Sweden this time, was the announcement that Google is working on speeding up their already mighty Google fibre, to offer data rates as fast as 10 gigabits per second, which it claims is 10 times faster than the current network.
And of course there’s no point talking about speed without taking a trip to Asia. Absolutely no surprise that a recent report from Akamai reveals that Asia leads the world and claims the top three positions for Internet speeds during 2014. Thanks to high FTTH penetration and adoption, South Korea boats average speeds of 25Mbps which is nearly 7x the global average. Although it’s worth noting that to this year, UAE holds the highest number of FTTH subscribers.
Co-operation in the Delivery of Fibre
It’s safe to say that when operators have the buy-in of local government, the deployment of fibre can be accelerated. And the more co-operation there is in terms of the rollout, the more successful the project can be. Reading a recent report from Ovum on “FTTx: Google sets the bar for 1Gbps FTTH in the US”, I saw that one recommendation for other service providers to compete with the search engine giant was:
Other service providers will need to follow Google cooperative model to be successful.
It is harder than ever to be profitable, especially with FTTH. The most difficult element of its strategy to emulate is the trust and cooperation with local councils, which will require a major effort and culture change on the part of the service provider…continue reading
Kamalini Ganguly, Senior Analyst, Ovum
Broadband World Forum
This attitude and strategy is mirrored within the programmes for FTTx & Gigabit Communities and the Access Innovation Zone at BBWF, where UK-focused and global operators will be discussing how co-operating more effectively with local governments can help in the delivery of fibre.
Tuesday 20th October
Interactive Discussion: How can Local Governments Encourage Broadband Expansion with Gigabit Speed Networks?
Dana Tobak, Managing Director, Hyperoptic
Rob Hamlin, Director of Business Development, CityFibre
Matthew Hare, Chief Executive, Gigaclear
Patrick Farajian, Chairman & CEO, Sodetel
Wednesday 21st October
Interactive Discussion: What does it Take to Deliver Gigabit Cities?
Malcolm Corbett, CEO, Independent Networks Cooperative Association
Martin Reeves, CEO, Coventry City Council
Roy Grant, Head of ICT, City of York Council
Mark Collins, Director, Strategy and Public Affairs, CityFibre
Join us in London on 20-22nd October for this year’s Broadband World Forum to get involved in the industry discussions on the future of FTTx with some of the world’s leading players.
Explore the benefits fibre has bought to other operators and evaluate the potential business models behind investment and opportunities to monetise FTTx.