FTTH News

CenturyLink, Inc. (NYSE: CTL) says it now offers its PON-based symmetrical 1-Gbps small and medium business (SMB) services in parts of Iowa, Idaho, North Carolina, Ohio, and Wisconsin. The additions bring to 17 the number of states where the operator offers such services.

The new roll out will make the 1-Gbps fiber-optic network services available to 115,000 additional U.S. business locations in the five states. CenturyLink says it also will expand its existing fiber-based SMB footprint in Arizona, Colorado, Florida, Minnesota, Nevada, New Mexico, Oregon, Utah, and Washington.

CenturyLink also provides 1-Gbps SMB services in parts of Missouri, Nebraska, and South Dakota. In all, the new deployments will bring approximately 490,000 SMB locations access to the services, which include IP networking, VoIP, and cloud capabilities.

According to Shirish Lal, CenturyLink's chief marketing officer, the PON infrastructure enables the operator to offer services based on either MPLS or IP. He reports interest in both options, with MPLS perhaps more popular.

The ability to offer symmetrical 1-Gbps also is a key feature the PON enables, Lal says. He says CenturyLink sees increasing bandwidth demands from its SMB customers because of interest in disaster recovery, off-site storage backup, cloud, and related services. The company also is seeing success for its managed LAN offerings that leverage the network as well.

The 1-Gbps pipelines also should enable CenturyLink to offer an array of virtualized services via network functions virtualization in the future, Lal says.

Where CenturyLink also offers 1-Gbps residential fiber to the home (FTTH) services, the operator has converged residential and SMB service provision over the same infrastructure, Lal adds. Those cities include Columbia and Jefferson City, MO; Denver; Las Vegas; Minneapolis-St. Paul; Omaha; Orlando; Portland; Salt Lake City; and Seattle.

Calix says it has provided GPON technology to CenturyLink for at least some of these deployments.

According to a new forecast* by Ovum, the number of residential gateways, TV set-top boxes and other home broadband equipment in use that support the Broadband Forum’s TR-069 (CPE WAN Management Protocol) standard will reach 356 million in 2016, as a growing number of service providers embrace the management protocol to support burgeoning demand for ultrafast-broadband and smart-home services.

The forecast was commissioned by the Broadband Forum standards body responsible for TR-069 as part of a wide-reaching project that saw Ovum survey over 250 global industry executives, including over 100 in senior roles at broadband service providers, about their use of TR-069 and plans for the smart home.

TR-069 is a technical specification that defines a common communication protocol that enables broadband service providers to remotely configure devices, enable end-to-end delivery of new services, and then cost-effectively manage and support them.

Rob Gallagher, Ovum research director, commented: "Our survey shows that service providers are already deriving significant value from TR-069, with over six out of ten reporting benefits such as simplified service delivery, faster fault resolution and lower installation costs."

"Adoption of TR-069 will accelerate as a growing number of DSL, fiber and cable service providers alike bake technology into their ultrafast-broadband, multiplay bundling and smart-home strategies. With the number of connected devices and applications set to grow, they see a clear need to better visualise, support and control activity on the home network, with eight out of ten stating that TR-069 will play a significant role in their smart-home strategies."

Robin Mersh, CEO of the Broadband Forum states, "the Forum is delighted to see the continuing growth and expanded use of the TR-069 CPE WAN Management Protocol in broadband operators' networks and the exciting opportunities that exist as the needs of the connected home move from managing devices to managing services. The survey brings this vibrant market sector to the attention of the whole industry and shows how the complex technical work of TR-069 is making a real practical difference."

Ovum's estimate of 269 million TR-069-enabled devices by end-2014 marks an increase on a projection of 250 million made by the global research and advisory firm as part of a 2012 study commissioned by the Broadband Forum. Ovum revised its estimates upwards largely to reflect moves by a growing number of service providers to take greater control over the residential gateway as they accelerate take-up of ultrafast-broadband and multiplay bundles.

Residential gateways will account for the majority of TR-069-enabled CPE, rising from just under 200 million at the end of 2014 to 255 million at the end of 2016. During this period, the percentage of fixed-broadband connections equipped with a TR-069-enabled residential gateway will increase from 26% to 30%. TV set-top boxes will be the second-largest category, rising from 46 million at the end of 2014 to 69 million at the end of 2016. More findings from the survey can be found within the "Efficient and Automated Smart Home Rollout"** whitepaper, which was sponsored by Axiros.

Across Africa, the deployment of high speed networks is accelerating, with the continent part-way through a connectivity transformation. The landing of submarine cables around the African coast has provided high capacity links to the Internet, but networks are needed to connect inland areas to these hubs. Additionally, a growing percentage of the population relies on mobile phones, not just to make calls but also to bank, shop and access the Internet, leading to a requirement for cost-effective data backhaul.

The market need

Both high speed broadband and backhaul networks for mobile operators increasingly rely on fiber. Previous deployments of copper-based networks had cost advantages, but in many places problems with bad terminations and cable theft have led to outages, meaning that fiber is becoming the solution of choice.

Across Africa fiber is now the preferred carrier of backhaul services with SDH, DWDM and MPLS deployed for protected services and FTTx, FWA, GPON and microwave radio being the preferred methods for last mile deployments.

France is nearing 1 million FTTH subscribers at the end of 2014, according to the latest broadband figures from regulator Arcep. The number of FTTH connections rose 67 percent last year to 935,000. This is equal to a network penetration of 23 percent of homes passed, an increase of 4 percent points in 2014.

In the last quarter of 2014, the total number of broadband connections of 30 Mbps or more, including both FTTH and VDSL, rose by 600,000 to 3.1 million. That is an increase of 50 percent year-on-year. Some 13.3 million homes could receive more than 30 Mbps at year-end, an increase of 20 percent year-on-year. This included 4.1 million passed by FTTH, up 37 percent from 2013.

The remaining broadband base, on speeds of less than 30 Mbps, totaled 22.9 million at year-end, stable year-on-year but a drop of 290,000 in the last three months of the year. In total, the French broadband market gained 305,000 subscribers in Q4 and around 1 million in the full year, to reach 26.0 million at the end of 2014

Spanish FTTH connections more than doubled in 2014, from 615,000 in December 2013 to 1.56 million at the end of 2014, according to the latest data released by telecoms regulator CNMC. In December alone, the 110,485 FTTH accesses more than compensated for the decline of other broadband technologies such as ADSL, which fell by 77,331 lines. The total number of fixed broadband lines stood at 12.94 million, a 5.9 percent year-on-year rise, with broadband penetration standing at 27.8 lines per 100 inhabitants. In 2014 as a whole, Telefonica gained a net total of 35,540 broadband lines, with other operators sharing an additional 568,970 lines and cable providers adding a further 117,210 lines.

Earlier in February, Tom Carpenter (Chief Executive Officer at M2FX) attended the 2015 FTTH Europe conference in Warsaw, where there seemed to be greater optimism around the European fiber market than in previous years. This was backed up by the annual IDATE figures released by the FTTH Council Europe, which showed that the number of FTTH (Fiber to the Home) and FTTB (Fiber to the Building) subscribers had increased by 50% between 2013 and 2014.

In total, this means that there are now 14.5 million FTTH/FTTB subscribers in Europe, with a further 14.8 million in Russia and the Ukraine. Strong progress was seen in countries such as France, the Netherlands, Spain, Portugal and Romania, while Germany is poised to enter the rankings, as it approaches 1% of homes subscribing to fiber. Lithuania continues to top the charts, with nearly 35% of households benefiting from fiber broadband, followed by Sweden and Latvia.

According to a related report from Heavy Reading’s Graham Finnie, subscriber numbers will double by the end of 2019 across the 44 countries he surveyed, which stretch from Iceland to Kazakhstan. This predicted 62 million high speed fiber to the home connections, which includes apartments in multiple dwelling units, will represent around 19% of the households in the region.

Patchy progress

That’s the good news. However, both studies pointed to a group of countries where FTTH/B has yet to grow significantly. Belgium, the Czech Republic, Austria and the UK each connected 20,000 new FTTH customers during 2014. Slow progress will make it difficult to hit the European Union’s Digital Agenda target of 50% of households receiving 100 Mbps broadband by 2020.

It is also sobering to compare European growth with other countries across the world. 85% of homes in the United Arab Emirates (UAE) and 63% of those in South Korea are FTTH subscribers, for example. New US rollouts mean that fiber broadband penetration rates there are ahead of many European countries, including France, Spain, Germany, Italy and the UK.

There are a number of reasons for the varied growth in FTTH within Europe. The economy within the Eurozone remains weak, leading to many operators putting fiber expansion plans on hold and some governments to scale back support for national fiber infrastructures. Perhaps most of all, there is no single killer app for FTTH. We’ve previously discussed some of the potential uses of superfast broadband, from 4K TVs to the Internet of Things, but they have yet to achieve mass-market penetration in Europe.

This leads to a dilemma for operators – they understand the need for FTTH, but high installation costs mean it is simply seen as too expensive to embark on now, rather than in the future. Many incumbents are looking at ways of squeezing more from their existing copper networks, such as G.Fast, and putting off replacing the last mile connection.

Moving the debate from theory to practice

It is in this area of cost focus that I think Europe is behind other regions, such as the Americas. The presentations at the FTTH Europe show were dominated by discussions at a macro level about the need for, and advantages of, fiber broadband, with very little about the technical considerations of installing networks. Many appeared pretty similar to those I saw either last year or even the year before. Given that everyone at the event works in the FTTH industry and understands the benefits, it is time to move the debate on. In contrast, the OSP Show in the US is much more practical, looking at how operators and installers overcome the cost challenges of fiber rollouts and manage CAPEX and OPEX budgets successfully.

Smart operators see the opportunity to win customers now, rolling out fiber – particularly in cities – in order to gain a first mover advantage. The growth we are seeing in subscribers demonstrates this, particularly with innovative projects that are being rolled out by new entrants and municipalities looking to compete with incumbent telcos.

However, more can be done; He’d like to see the FTTH Council Europe event recognize that the goalposts have shifted and to spend more time addressing the question “FTTH is really expensive – how do we make deployment more cost-effective?” That will help move the industry in Europe forward, and help expand the entire market.

Last year, I said that FTTH in Europe was still searching for a compelling event to kickstart growth. It may not have found it yet, but the strong figures show that progress is accelerating, and as more and more people see the benefits of FTTH, it should drive more interest and subscribers. What it needs is a renewed focus from the industry, led by the FTTH Council Europe, if it is to overcome the cost challenges that are holding it back.

1. Fiber to the Building (or Premise) continues to grow

The market demand for fiber broadband is there, and carriers are looking at how they can address it most cost-effectively. Consumers and businesses are keen to embrace faster speeds – Akamai's recent State of the Internet report found that the US had an average connection speed of 11.5 Mbps, behind the likes of Finland, Switzerland and South Korea.

This is driving widespread rollouts of Fiber to the Premise (FTTP), with high speed broadband connections to commercial and multi-tenant buildings (Multiple Dwelling Units – MDU). Getting fiber to individual tenants is then the next step, and can be complex and expensive, particularly in buildings with congested ducts and older infrastructure.

At the same time as subscribers are asking for the power of superfast broadband they do not want cosmetically ugly installations that clutter up their apartments with cables, so carriers are looking for equipment and techniques (such as pushable microfiber) that provide a fast, mess-free deployment.

2. Multiple players pushing fiber

Cable companies and traditional carriers are part way through the process of moving from their legacy coax and copper networks to fiber optic. Given the size of their infrastructure, this is always going to be a slow process, but the strong economy, consumer demand and entrance of new players – such as Google – is accelerating change. There have been plenty of announcements from carriers and cable companies, big and small, of new fiber deployment plans, and I expect this to accelerate in 2015. Examples include:

• Google Fiber announced the next step in its rollout at the end of January 2015, with plans to bring fiber to 18 cities across Atlanta, Charlotte, Nashville and Raleigh-Durham;
• AT&T originally announced plans to bring its GigaPower 1-gigabit broadband service into 100 cities in 2015. However, the potential changes caused by net neutrality have caused it to put at least some of these plans on hold;
• After a successful launch in Omaha, CenturyLink has plans to expand FTTP further, including into Denver and Portland
• Verizon is nearing the end of its rollout of its FiOS fiber network, and estimates that it will have passed more than 19.8 million premises, though it announced in early February that some operations will be sold to Frontier Communications.
• Cox Communications has announced that it will bring 1 gigabit speeds to residential customers in all its markets by the end of 2016.

This is backed up by analyst figures – research organization RVA found that while the number of FTTH implementations in North America was broadly flat in 2014 compared to 2013, they are expected to grow dramatically by 2017, with new connections approaching 3 million households per year. This equates to annual direct investment of $4.7 billion, by 2017, by operators.

Coax and copper aren't going to disappear overnight, so carriers are investing their capex budgets where they see the biggest returns.

At the sharp end, network planners and installers are therefore looking for ways of bringing down the cost and complexity of fiber rollouts so that they can deliver on the plans that were announced in 2014.

3. Municipal deployments growing

There are wide discrepancies across the country when it comes to broadband access – research from the US Census and Pew Research points to a patchwork of speeds and availability between metro, suburban and rural areas.

Unsurprisingly, capex budgets from traditional carriers are being invested in projects with the biggest business benefits, which potentially leaves some communities trailing. To help plug this gap, President Obama announced plans, in January, to make it easier for communities and citizens to gain access to fiber broadband.

At the same time, figures from the FTTH Council Americas demonstrate the quantifiable benefits that gigabit fiber brings to communities. A Council study found that 14 areas it surveyed with gigabit broadband boasted GDP that was $1.4 billion higher than their comparable neighbors.

Many municipalities are therefore building out networks across their towns and local areas to meet untapped needs and deliver the benefits that high speed broadband connections can provide to their citizens, businesses and their own operations.

m2fx is involved in the extremely successful municipal rollout in the City of Loma Linda in Southern California. With 21,000 residents and a reputation as a healthcare center, Loma Linda has cost-effectively deployed a city-wide network within budget and tight timescales, using micro trenching and pushable fiber. Medical facilities are now able to share data in real time, enabling remote diagnostics and faster medical care, while new businesses have moved to the City thanks to the power of the network.

Given the success of trailblazers, such as Loma Linda, they expect to see many more municipalities deploying their own fiber networks to encourage new businesses to an area, make it an attractive place to live and enable greater efficiency and new services from government.

The US fiber market is currently incredibly dynamic, with a combination of increased competition, greater demand and growing investment meaning that 2015 is likely to be an extremely busy year for everyone involved.

The number of fibre to the home (FTTH) and fibre to the building (FTTB) subscribers in Europe has soared, increasing by 50% over the 12 months ending December 2014, according to the latest update to the FTTH Ranking announced at a press conference held at the FTTH Conference in Warsaw.

There are now nearly 15 million FTTH/B subscribers on the European continent (14.5 million to be exact) – not including Russia and the Ukraine, which would add a further 14.8 million homes to the total (source: FTTH market panorama prepared by IDATE for FTTH Council Europe).

"This is phenomenal progress, and it proves that FTTH/B is poised to become THE mass market broadband product in Europe, even though there is still a long way to go to reach the Digital Agenda Target of 100 Mbps for 50% of Europe's households by 2020!" said Karin Ahl, President of the FTTH Council Europe.

Although there were no new countries in the FTTH Ranking, there is a new momentum in Germany where alternative operators like Deutsche Glasfaser are pushing ahead with fibre deployment. The country is now very close to entering the FTTH Ranking – if progress continues at this rate, Germany is likely to reach the qualifying threshold of 1% of homes subscribing to fibre sometime in 2015.

Good progress was also reported in countries like Romania, Spain, France, Netherlands and Portugal. However, a number of European countries are still holding back on their fibre roll-outs and are missing out on the economic and social advantages that FTTH can bring. Countries like Austria, Belgium, Czech Republic or the United Kingdom connected fewer than 20,000 new FTTH customers during the whole of 2014.

The FTTH Council Europe also announced today that dstelecom (dst group) and Dik Wessels received this year's FTTH Operators Award and Individual Award, respectively, for their outstanding efforts to accelerate the adoption of FTTH in Europe.

Portuguese operator dstelecom, represented by Xavier Rodriguez-Martin, member of the board, received the FTTH Operator Award in recognition for rolling out advanced fibre networks in rural areas located in the north and south of Portugal. With an investment of €90 million, dstelecom group has installed more than 9000 km of optical fibre cable to cover more than 50% of the households in these regions.

In awarding Dik Wessels the FTTH Individual Award, the FTTH Council Europe recognized the importance of his role in the investment in FTTH infrastructure by the family's investment group Reggeborgh. Dik Wessels is the initiator behind Reggefiber BV and Deutsche Glasfaser GmbH. The success of this innovative strategy has been confirmed by Reggefiber's penetration in the market in the Netherlands and its recent acquisition by KPN.

The FTTH Conference was opened by Andrzej Halicki, Polish Minister of Administration and Digitization and Iwona Wendel, Undersecretary of State for the Ministry of Infrastructure and Development. The event, which attracted nearly 3,000 participants from 85 countries, hosted 95 exhibitors and over 130 high-quality presentations and case studies from renowned industry speakers. A keynote speech by Anna Herold, Member of Cabinet, Cabinet of Günther H. Oettinger, Commissioner for Digital Economy & Society, European Commission followed opening ceremony speeches by Magdalena Gaj, President of the Office of Electronic Communications (UKE), Prof. Fatima Barros, Chairman of Body of European Regulators for Electronic Communications (BEREC) and Karin Ahl, President of the FTTH Council Europe.

The 13th edition of the FTTH Conference will be held in Luxembourg on 16 – 18 February 2016.