Chile’s Movistar pursues fibre ambitions

Telefónica’s Chilean subsidiary Movistar has connected up half a million homes across the country with fibre and is now getting ready to launch an IPTV service, according to local reports.

Movistar’s General Manager Roberto Muñoz is quoted by Chilean newspaper La Tercera as saying that the company has already deployed 16,000 kilometres of fibre at a cost of US$ 500mn across the capital city of Santiago and major cities including Arica and Puerto Montt.

Muñoz relates that these new fibre connections reach around 500,000 homes and 1,300 large companies, representing 30 per cent of its footprint.

While he concedes that it is not viable to connect all homes with fibre, expanding its footprint is thought to offer many advantages, including the ability to deliver super-fast broadband, mobile backhaul, and IPTV.

On this last point, the Movistar exec adds that the launch of IPTV services in Chile will change the local TV market “in the way as cable TV did in the 1990s”.

Intriguingly, he also mentions a partnership with Microsoft’s Xbox team which will enable the delivery of cloud-gaming services on the IPTV service, using a set-top box rather than the Xbox console.

Revolutionising the Chilean TV market will take time however: Muñoz concedes that mass take-up of the IPTV service will take years, and estimates that achieving the same impact as cable TV did will take five to eight years.

Spain and Luxembourg join the fibre elite

Drum roll… two new countries have joined the European FTTH Ranking, including one of the major European economies. There are now 22 economies in Europe where more than 1% of households have a fibre connection. (Our definition of Europe includes the EU27 plus Andorra, Croatia, Iceland, Israel, Macedonia, Norway, Serbia, Switzerland, and Turkey.)

In the last six months, the region saw solid growth in the number of FTTH/B subscribers, reaching 32 million homes passed and 5.95 million subscribers by the end of June 2012. Russia also saw a significant increase with 15.8 million homes passed and 5.2 million taking a fibre subscription.

Spain entered the ranking at 20th position with household penetration of 1.42% following a 44% increase in the number of FTTH/B subscribers in the first six months of 2012. Despite the country's challenging economic situation, telecom operators such as Telefónica, Orange Spain and cable operator Ono, amongst others, have continued to invest in fibre.

The other new entrant in the ranking was Luxembourg in 19th place with household penetration of 1.45%. State-owned operator P&T Luxembourg working towards ambitious government objectives: to pass 80% of all homes with 100Mbps by end 2013, and 100% of homes by the end of 2015.

Italy's Wind to sign up to Milan fibre network

The chief executive of Italy’s No. 2 fixed-line telecom operator Wind Telecommunicazioni SpA said Friday that he will sign up to MetroWeb SpA’s fledgling fiberoptic network in Milan in a first step to rolling out superfast Internet access for Wind customers across Italy’s biggest cities by 2014.

Italy’s third operator, Vodafone Italia, will also sign up, people close to that company said, leaving former monopoly Telecom Italia with few backers among telecom operators for its separate network upgrade scheme.

Telecom Italia signed a deal in September to build a superfast network with internet services provider Fastweb. Eventually Telecom Italia needs to be part of the fiberoptic plan, which will deliver speeds of up to 100Mb a second for Italian businesses and consumers, Wind CEO Maximo Ibarra said Friday.

Delays in delivering fast broadband speeds are crippling the country’s businesses, Mr. Ibarra said.

“If we don’t do the rollout quickly, there’s a risk for the country as a whole. I think that we can't wait more than 18 months maximum to do this,” Mr. Ibarra said on the sidelines of the Capri telecom conference.

MetroWeb has begun rolling out fiberoptics in Milan and plans to cover 30 cities by 2014.

Telecom Italia has pursued a separate path, planning an upgrade of its network that will deliver download speeds of around 30Mb a second–much slower than the MetroWeb plan.

MetroWeb Chief Executive Alberto Trondoli said he expects both Wind and Vodafone Italia to sign up in the next two weeks.

By using Metroweb, the two companies will be able to offer superfast broadband of up to 100Mb a second.

FTTH Council Europe cheers Spain, scolds the UK

In the latest update to the Fiber to the Home Council’s FTTH ranking, Spain is one of the fastest growing fiber nations in Europe while the UK is the slowest. The FTTH Council Europe offered a preview of its official data at the NextGen 12 conference in London ahead of the official announcement next week.

Spain is one of two new countries to join the European FTTH ranking this time around, the other being Luxembourg. That brings the total number of countries in Europe with more than 1% of households subscribing directly to fiber connections to 22 out of a possible 39 (the ranking also includes Russia and the Commonwealth of Independent States, or CIS).

Overall there are now about 5.95 million FTTH subscribers in the EU35 countries and the study also counted a further 6.3 million in the CIS region. This corresponds to a modest increase of about 16% in the number of subscribers connected across the EU35 during the first six months of 2012.

To put this into context, the Asia Pacific region had 58 million FTTH subscribers at the end of June 2012, while the FTTH Council North America recently announced that the number of FTTH subscribers on that continent had passed 9 million (see “FTTH Council Americas releases FTTH market numbers”). Europe is still a minor actor on the world stage when it comes to FTTH.

The fact that Spain, a major European economy, has joined the ranking is a source of delight for the Council. It is always harder for a country with a large population to do well in the ranking because the position is determined as a percentage of the total homes in the country.

Progress in Spain has been driven mainly by the Spanish incumbent, Telefónica, although cable operator Ono and Orange Spain have also been investing in FTTH. By the end of June 2012, Telefónica had passed around 1.7 million homes, giving it the distinction of having the largest FTTH network deployed by an incumbent operator in Europe.

Following some pilots projects in 2007, Telefónica decided in 2010 to roll out FTTH across the cities of Barcelona and Madrid. The operator is taking FTTH very seriously, says Carlos Bock, a broadband consultant in Spain. “This year they finished covering Barcelona and they are almost done in Madrid as well,” he wrote in his blog. “The next step is to push hard and invest €1.2 million over the next three years to cover 50% of the Spanish population.”

However, other major economies like the UK and Germany are still noticeably absent from the ranking, and the situation is unlikely to change anytime soon, the Council reports. In fact, the UK was singled out as the country with the lowest FTTH penetration in the whole of Europe: just 0.05% of households take a fiber subscription.

Despite the fact that the government has announced its intention to have the best superfast broadband network in Europe by 2015, the UK has no large-scale FTTH deployment plans. “We see a big gap between the so-called ambition of the UK government to have the leading broadband infrastructure in Europe and the actual targets of the plan,” said Nadia Babaali, communications director of the FTTH Council Europe. “We should be talking about gigabits, not adding a few megabits onto a DSL connection.”

One crucial missing element is competition. In countries like Spain, cable operators and alternative telcos have decided to upgrade or expand their networks, which has forced the incumbent to change its approach. Although the UK has a competitive retail broadband market, at the wholesale level the access market is dominated by the incumbent. While BT’s next-generation access roll out does include some FTTP, the majority of its investment is focused on FTTC (see “BT launches FTTP service, promises 300 Mbps next year”). Small local projects can claim more FTTP subscribers than BT, but none of them have the scale to challenge the incumbent.

With its annual conference taking place in London early next year, the FTTH Council Europe is keen to drive home the message that the UK needs to step up its efforts on FTTH or risk being left behind in the digital economy. “The infrastructure is needed now because it takes time for people to connect and it takes time to develop the services and applications that power the digital businesses of the future,” said Babaali. “Let’s get out of this chicken and egg situation [consumers and businesses can’t demonstrate demand for services that aren’t yet available], and recognise that this is our future.”

FTTx Market Starts Lighting Up in India

The consumption of broadband services is exponentially growing, with the sheer unpredictability of demand making it difficult to determine the network capacity operators’ need to satisfy their customers with the best experience at the lowest cost.

India has very low broadband penetration (net broadband additions per two months is 0.1-0.2 million – i.e., 18 million mobile connections per month), which provides a huge opportunity for the optical fiber networks to be deployed in fiber-to-the-x (FTTx) configurations in the urban/semi-urban scenarios. Moreover, increased adoption of applications such as e-medicine, video conferencing, e-Learning, security surveillance, et. al., will increase capacity/bandwidth requirements.

The Indian government has set a target of 48 million broadband connections for a sample of 241 million households by 2012 for which the number of connection with contention ratio is 1 million, which requires core bandwidth (at 3 Mbit/s) speed totaling 3000 Gbit/s.

Right of way delays due to significant variability in policies across states is a current challenge in the market. One of the big problems facing telecom operators is the cost associated with gaining permission to build new ducts and lay the fiber, with an estimated 70 percent of the cost of building a fiber-to-the-home (FTTH) network eaten up by payments to local authorities and the organizations involved in digging up the roads. Gaining access to buildings is also a major hurdle – one that could lead to high-speed broadband access networks being deployed in local pockets, rather than being widespread.

In the last decade, Indian service providers, both public and private, have together laid over one million kilometers of optical fiber across the country. However, most of the fiber is concentrated in metros and Tier-1 cities, while rural and suburban communities have limited access to telecom services. It has been estimated that the existing optical fiber network will have to be augmented by another one million kilometers to ensure nationwide connectivity to consumers and businesses throughout India. Government optical fiber initiatives such as NKN, NBN, SWAN and NOFN will play a major role in closing this gap, while making the network future-proof for a full basket of high-bandwidth applications that will be the mainstay of modern telecom networks.

Optical fiber access will progressively penetrate deeper into the network and edge closer to the end-user. However, fiber laying is a time consuming process, so in the interim, multiple technologies such as xDSL, microwave and broadband wireless technologies (LTE) will continue to coexist in the first mile.

FTTH Council Americas release FTTH market numbers

The Fiber-to-the-Home (FTTH) Council Americas released at its conference in Dallas its annual update of FTTH progress in North America. There are now 9 million homes connected by FTTH networks on the continent, with the number of homes passed reaching 24.3 million.

The number of homes passed has risen by 10% over the past six months, the council asserts. While Verizon far and away serves the most subscribers – more than half of the total – small incumbent telephone companies have taken up the FTTH mantle and represent the current engine for growth, according to the council's research.

"While large providers such as Verizon in the U.S., Bell and Bell Aliant in Canada, and Telmex in Mexico continue to be very important, small providers such as rural telcos, real estate developers, small competitive providers, and even rural electric co-ops are playing a key role in driving the expansion of fiber to the home," said Michael Render, president of RVA LLC, a market research firm that tracks FTTH deployment for the council.

To underscore the importance of smaller carriers in the FTTH space, RVA says that all but 8 of the nearly 880 FTTH service providers surveyed have fewer than 30,000 subscribers. A mere five have more than 50,000 access lines; 97% of carriers using FTTH have fewer than 10,000 access lines.

Which is not to say that large carriers other than Verizon have ignored FTTH. "In addition, other large providers are growing in importance," according to Render. "AT&T is increasing its deployment of FTTH in new developments, and the new Google Gigabit fiber deployment in Kansas City is now fully underway."

In a presentation Monday at the FTTH Conference in Dallas, Render revealed that the average FTTH service provider take rate in North America is 42.2% — a figure that rises to 44.2% in the U.S.

More than a half million households in North America enjoy Internet connectivity of 100 Mbps or more, according to RVA. Median tested download speeds were above 20 Mbps for FTTH subscribers, versus less than 15 Mbps for cable modem users. Upload speed on FTTH networks average more than 9 Mbps, while cable modem upload speeds are around 3 Mbps, RVA asserts. The cost per megabit for FTTH services is $2.64 RVA states, the lowest figure among alternatives such as cable modem, DSL, and wireless.

FTTH connections also are growing in Latin America, according to supplementary research presented at the conference. All-fiber networks now pass 4.2 million homes in the region, with 350,000 homes connected, according to research conducted by the consulting firm IDATE for the FTTH Council Americas LATAM Chapter. Mexico leads the region in FTTH connections, followed by Brazil. Chile and Argentina trail Mexico and Brazil by a significant margin, but show potential for growth as new deployments are underway.

"We found that the main fiber architecture being deployed in Latin America is FTTH, as opposed to fiber to the building, and that GPON is the preferred technology — involving more than 80% of the deployments in both cases," said Roland Montagne, director of the Telecoms Business Unit at IDATE.