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Fixed Telecom Operators to Spend GBP33bn on Fibre Optic Rollouts by 2017

Friday, April 27th, 2012 (10:14 am) - Score 694
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Consultancy firm Analysys Mason has estimated that fixed telecoms operators, specifically those in developed countries (Central and Eastern Europe, developed Asia–Pacific, North America and Western Europe), will over the next 5 year period (between 2012 and 2017) spend £33 billion (USD53.5bn) on the roll-out of new superfast fibre optic broadband networks (e.g. FTTH).

The highest regional spending is expected to occur in Western Europe (£16bn / USD25.9bn), where the European Union (EU) has encouraged member countries to adopt its Digital Agenda. This aims to ensure that, by 2020, all Europeans have access to much higher internet speeds of 30Mbps+ and 50% or more of EU households subscribe to speeds above 100Mbps.

Interestingly the report claims to “highlight the dangers” to operators that focus on a pure Fibre-to-the-Home (FTTH) approach, which delivers faster speeds (extending into the Gigabits per second range) by taking a fibre optic line right to your doorstep. This, they say, is because it will take longer for such services to reach customers and at a significantly higher cost; 82% of the predicted expenditure will go on FTTH.

Analysys Mason states that focusing on FTTH at a time when cable and 4G mobile operators are able to upgrade more quickly than Telco’s raises “questions about appropriate and efficient use of capital“. Instead they appear to advocate the use of hybrid VDSL solutions (i.e. the fibre only goes so far as your local street cabinet), such as the FTTC (e.g. BTInfinity) service used by BT in the UK, which delivers slower speeds but continues to improve through new technologies (e.g. vectoring) and can be deployed more quickly with a much lower cost. They seem to love hybrid solutions.

Rupert Wood, Report Author, said:

Given the as yet untapped potential of copper over short distances, we wonder whether it is really sensible at this stage to take fibre right to people’s homes. Sticking rigidly to FTTH runs the risk of delivering next-generation access to a largely urban or well-to-do elite, while delaying delivery to other users and potentially losing customers. This may come to look both commercially and politically unacceptable.”

It’s a fair point but even hybrid copper/fibre solutions have their limitations, which means that the top speeds are often only received by those who live closest to their local street cabinet (people who live furthest away suffer much slower speeds). Some suggest that this could mean a larger investment over the longer term because operators would eventually have to come back and do FTTH anyway.

On a more positive note, the report finds that take-up of superfast broadband is “gaining some momentum in Europe“, with take-up rates for Telco’s of 25% or more in covered areas now seeming “perfectly achievable“. However, the low price and high availability of existing copper based ADSL2+ services, despite their many problems, is one of the mean reasons why adoption of superfast solutions hasn’t been faster.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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