As we hit the halfway point in this decade, it would appear that common sense is once again returning to our beloved broadband industry. There is increasing recognition that our long running romance with pure Fiber-to-the-Home (FTTH) strategies may fail to bear the fruits once promised. There is no question that today’s fixed line operators must innovate and invest to ensure they keep pace with the ever increasing-threats posed by the cable industry.
Once fractured and unorganized, recent cable consolidation has created giants with considerable resources. Compounding this threat is the mobile industry’s shift towards fixed operator acquisition to protect against stagnating mobile subscriber growth and ARPU erosion. Where FTTH has always been positioned as the panacea for all industry ailments, mass adoption has not taken hold, thanks mainly to barriers like cost and availability.
We tip our hats to notable exceptions consistently offered up as precedent that ubiquity can be achieved; however those who have completed even modest due diligence, recognize that unique attributes have played a significant role in the success of these FTTH rock stars. From the bottomless pockets of the UAE, to the unique scale economies achievable from the mega-MDUs of Asia, the sad truth remains that these unique attributes don’t translate to the majority of broadband markets. The cold hard fact remains that broadband providers are businesses, who in the majority of cases are accountable to investors. Those investors expect a timely return for their investment above all else.
Gone are the days where monopoly operators could make 25-year infrastructure investments, safe in the knowledge that they could maintain service pricing at the required levels to ensure satisfactory returns. With most operators being held to significantly shorter investment horizons, they must invest in solutions which keep pace with and offer protection from the subscriber poachers who bait their traps with higher headline speed offerings.
While FTTH’s eventual dominance is unquestioned, the reality is that ubiquity is unlikely in many of our lifetimes. Service providers who persist with a pure strategy risk significant subscriber erosion, not because of any technical limitations with their service offerings, but rather time-to-market delays. Recent years have revealed many examples where true FTTH has consistently taken longer to deploy and priced out higher than original models predicted.
For the service providers with existing copper assets, these fiber deployment delays may prove a blessing. Continued innovations in copper access technologies have permitted rapid deployment of ubiquitous superfast broadband services through the emergence of Vectored VDSL2 technologies. 2015 will see the latest copper innovations – capable of ultrafast speeds approaching Gigabit rates – reach commercial deployments. G.fast offers a standards-based approach that will permit service providers to eliminate many traditional sources of delay faced by full FTTH deployments. No more landlords seeking their pound of flesh, no more missed subscriber appointments, no more planning delays. More than capable of addressing the headline speed threat posed by the cable industry, G.fast offers the predictable roll-out schedule that investors demand, coupled with a time to market proposition which will facilitate a rapid response to cable erosion.
Leveraging existing assets prevents subscriber churn to cable, while simultaneously offering continued access to wholesale Bitstream revenue streams. This also eliminates the risk of opening up an LLU optical super highway that competitors can poach on the backs of others’ FTTH investment. Copper has suffered a confidence crisis many times in its life, but with fewer than 10% of European households connected to FTTH, it will remain highly relevant for years to come.
Ronan Kelly is ADTRAN Chief Technology Officer for the EMEA and APAC regions