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Point Topic Claim Residential Demand for 1Gbps Fibre Broadband is Low

Wednesday, March 13th, 2013 (2:23 pm) - Score 1,030
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A new study from telecoms analyst Point Topic UK has suggested that there is a ceiling to the broadband speeds that residential consumers are prepared to pay for, with hybrid-fibre (e.g. FTTC, FTTN) solutions tending to dominate the “superfast” market and demand for “bandwidths of a gigabit” being “relatively low“.

The research claims that consumers have started to see the point of superfast speeds from their ISP, albeit only up to internet download speeds of around 60-70Mbps (Megabits per second). This performance, claims the analyst, is enough to “stream a high definition video or three with perhaps some light browsing on the side” (i.e. ideal for a modern family). But apparently people rarely see much need for anything more.

global domestic fibre optic broadband speeds 2010 to 2012

Similarly the analyst notes that, in terms of modern internet applications (e.g. video streaming), there is currently “nothing that threatens to add up to much more than 40 to 50Mbps particularly over any significant time period“. It adds that there are still relatively few households that will use even 20Mbpsfor more than a few seconds or at most minutes at a time“.

But Point Topic does admit that there are already some ISPs making a success of even faster speeds (e.g. B4RN, Hyperoptic) and in “ten years time” the situation could be very different.

Oliver Johnson, CEO of Point Topic, said:

Consumers are making a decision when they sign up to an operators service that will usually be with them for at least a year and often two. If you are offered more bandwidth then fine but if it comes at a higher cost then a more complex value judgement takes place.

Suppliers can satisfy most of their customers and still keep their capital expenditure under control. Fiber to the node is a more realistic option at the moment since it provides enough of an bandwidth upgrade to satisfy demand as well as being a stepping stone for future deployments. It’s a half way house that both suppliers and customers can accept and afford.”

The study does however recognise that “the most persuasive argument” for rolling out a true fibre optic (FTTH, FTTP etc.) service now is “future proofing” and it warns that operators adopting a hybrid approach may have to “come back for another deployment round in five to seven years“. At that time some of the smaller FTTH ISPs could also be “swept up by the market leaders” (taken over).

As a side note it’s also worth remembering that hybrid-fibre solutions, such as BT’s FTTC service, don’t deliver superfast broadband (25-30Mbps+) speeds to everybody and many lines could receive well below that level of performance.

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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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14 Responses
  1. Avatar TheFacts

    No surprise, but note that the interfaces for fibre are 1G, so anything less is configuration?

  2. Avatar DTMark

    This doesn’t really tell us anything new or dynamic.

    There is no present need for widespread 1Gbps speeds, so there is no or low present demand.

    Infrastructure is not about present demand, it is about future needs.

    We already know that the short-term ROI is not present to justify a commercial rollout for FTTP.

    What we need to do is to set up a body which can look to the future and come up with a plan to drag this country’s infrastructure into the future.

    And we’re still waiting for such a body to be created.

  3. Avatar Bob

    There was also no demand for tablet computers until Apple launched the iPad. The technology was about for years. Microsoft first tried to launch one around the turn of the century but there wasn’t enough interest so they chickened out. Tablets are now one of the biggest expanding markets in the technology sector. Sometimes it needs someone to take the lead. Someone with vision and confidence to take a risk.

    Look at google. They start installing gigabit and all the cable companies crap themselves. Once a market proved the floodgates shall open. Apps that require the bandwidth shall come, that is a foregone conclusion.

  4. Avatar RMT

    This is really non-sense. Right, residential and business customers aren’t buying GB/GB service. Why? Because it isn’t available. And if it is, then it is an insane amount of money (except for Google fiber area).

    If it actually was available for a reasonable price (~$200/month), every single small business customer of mine would buy it to geographically diversify their networks, and/or do backups. Even if that GB/GB was on-net only, and the service was available throughout a reasonable footprint.

    And SOME residential customers would probably be happy to pay $100/month for it. Granted, not everyone, but some definately would.

    If ISP’s claim the customer doesn’t use the bandwidth anyway, then why aren’t the ISP’s willing to sell it since it would ultimately cost them nothing, yet they could upcharge it? Oh yeah, because this crap of nobody wants it is really just a smoke screen!

  5. Avatar DSL Reports

    RMT has the right idea. Offer Gbit to businesses. Even at $1000 a month that beats what I pay for bonded T1s. Roll out the higher priced fiber to business them slowly roll out even 50-250mbit to residences. Even shared 250 mbit on Fiber beats what ever the local telco / cableco offer

  6. Avatar zemadeiran

    Has this site suddenly turned focus onto the American market????????????

    Copper is not fit for purpose any more due to all the high bandwidth services coming on line. The so called analysts cannot see beyond the end of their nose when it comes to seeing where the usage is coming from.

    7 years? More like a year!

    Once we have a solid nationwide fibre network, Terrestrial television can be delivered solely over the fibre network freeing up the wireless spectrum.

    France is powering ahead with their fibre plan and the UK is going to be left behind due to our incumbents short sighted monopolistic attitude.

    • Avatar FibreFred

      But why is it? Fibre on demand from Spring means fibre to anyone where the FTTC footprint covers (the vast majority). If people want fibre they can have it

    • Avatar zemadeiran

      Yes FibreFred,

      A step in the right direction. The only issue with that is the stranglehold that FTTC brings with it in regards to access etc.

    • Avatar FibreFred

      How do you mean stranglehold. Do you mean that you need to be on a fttc cab before you can order it ?

  7. Avatar MikeW

    The analysts can’t see beyond the end of their nose?

    LOL. *I* am the target market here. I’ve been using modems since 1986, and DSL since 2000. I’m an enthusiast for working from home, and both I and,my wife have done so for more than a decade. I now run a business this way, and access to internet has let me move the business 400 miles.

    The family uses iplayer, and have time-shifted TV viewing for many years. We regularly double-, triple-, and quadruple- screen while watching TV. The kids have ipads at school, and schoolwork/homework are very online- and interactively-based.

    We recently moved, and getting decent FTTC speeds was as (or more) important than the quality of schools. We get 80/20, but my target was nearer 50-60/20.

    And yet… I don’t feel we, as a family, needs more than 40/20. With good FTTC cover (and the jump we’ll get from vectoring), I truly cannot see a need for full fibre for another decade, and cannot justify it even when i have the money to burn. If i can’t justify it, the average family in the street isn’t *close* to needing it.

    The truth is that FTTPoD is going to be enough of an offering for almost any data-hungry residence or small-business in the FTTC footprint where FTTC itself isn’t enough.

    Anyone on a “fibre everywhere, now!” hobby horse would find a better use of their time getting the fibre footprint extended beyond 90%. Getting EO lines included, and pushing small cabinet DSLAMs further out for long lines, or taking full fibre out to these areas – these are much better ways to focus our efforts.

    For the first time in my memory, we’ve gone to having better access than both France & Germany – and we should celebrate that. However, if they ever get back ahead, it’ll be by having speeds beyond those needed.

    • Avatar FibreFred

      “The truth is that FTTPoD is going to be enough of an offering for almost any data-hungry residence or small-business in the FTTC footprint where FTTC itself isn’t enough.”

      ^ This

    • Avatar zemadeiran

      MikeW,

      I understand your position on FTTC being sufficient for your family and business needs.

      Fibre on demand will also provide an upgrade path to more bandwidth should a person require it.

      However, you have only taken into account local loop access as an enabler of your business and being able to relocate to a preferred area due to it’s availability. The fundamental point to bare in mind is how the “international network” functions in an open and collaborative manner between a myriad of telecommunications providers around the globe. Your business would not function very well online if the NET did not function in such a manner which is proof beyond a doubt that successful means collaboration in an open transparent manner.

      Think I am talking shit? Think about Linux and the way it is a global enabler along with other open source projects.

      AM radio is really ENOUGH for dissemination of information, a piece of paper as opposed to a tablet is ENOUGH, a bicycle is ENOUGH…..

      We cannot restrict ourselves and our economic growth by forced limiting of access and the lack of bandwidth myth which in essence is putting all our eggs in one basket.

      BT recently got some wireless spectrum via the recent auction, why would they re-enter the mobile comms market after selling cellnet years back? They are doing this because even they themselves know that landlines dying a death as wireless tech moves ever faster onwards and destroys the copper cash cow.

      “I truly cannot see a need for full fibre for another decade”

      and

      “The family uses iplayer, and have time-shifted TV viewing for many years. We regularly double-, triple-, and quadruple- screen while watching TV. The kids have ipads at school, and schoolwork/homework are very online- and interactively-based.”

      If you are honest with yourself, look at how technology has advanced in the last two years alone…

      We should really put ourselves in a position to handle all services that will undoubtedly be enabled by gbit+ connections to every person in the UK.

      I remember riding my Raleigh Chopper when I was a kid and playing runouts 🙂

    • Avatar FibreFred

      Bt have bought wireless spectrum to cover hard to reach areas, landlines are here to stay if not why is everyone crying for fibre to the home. Wireless has its place and a great future but it won’t be replacing everyone’s landlines anytime soon

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