Category : News

Cincinnati Bell (NYSE: CBB) may not be the size of its larger former Bell System compatriots AT&T (NYSE: T) and Verizon (NYSE: VZ), but it is innovating with new products like Fiber to the Home, IPTV and now energy services to offset inevitable declines in its traditional PSTN voice business.

On the FTTH side, Cincinnati Bell has been taking a careful growth approach, passing around 80,000 homes in Cincinnati and Northern Kentucky. Not content to rest on its laurels, the service provider plans to pass an additional 70,000 homes by bringing fiber into specific neighborhoods.

Of course, Cincinnati Bell is being realistic about its FTTH deployment. To augment its Fioptics TV service, the service provider will introduce its own IPTV service over its copper lines sometime later this month.

Ted Torbeck, president and general manager of Cincinnati Bell Communications, told Cincinnati.com that delivering IPTV over its copper lines is all about scale. By leveraging its existing copper network to deliver IPTV, it will be able to reach three times as many homes today than it can deliver over fiber.

Scaling the reach of a FTTH network, even for smaller ILECs like Cincinnati Bell, still requires a large investment. “We’ve invested $140 million so far and we still have only about 12-15 percent of the market covered,” Torbeck said.

But Cincinnati Bell is not stopping with FTTH and IPTV services. In June, the ILEC made a surprising turn when it announced it would begin offering residential customers electric service via a partnership with Viriden Energy.

Since launching the service late last month, Cincinnati Bell reported it has signed up 1,400 customers for the service. Going forward, the service provider plans to introduce energy service plans for businesses in addition to offering natural gas services.

While it will take time to assess how successful Cincinnati Bell’s bets on IPTV, FTTH and energy will be, these moves represent the service provider’s need to differentiate against the growing cable threat and ongoing wireless voice service substitution.

Bulgarian ISP EVO Ltd. will use GPON fiber to the home (FTTH) equipment to offer its customers a range of new services, according to the Europe-based systems house. The new services include IPTV.

Nokia Siemens Networks will supply in-home customer premises equipment and optical line termination units for EVO’s upgrade. The supplier of the companion optical line terminals in the central office has not been announced.

“Our goal is to improve the individual experience and satisfaction of our subscribers by providing new high-quality services, and increasing network capacity,” said Rosen Velikov, CEO of EVO Ltd. “Nokia Siemens Networks’ solution will translate into a more cost-efficient network expansion and also guarantee extremely reliable and high-quality data services to our subscribers.”

“Bulgarian citizens demand increased broadband access and new, convergent services. EVO.bg is playing an important role in bridging the broadband gap and setting high service quality parameters for us to meet,” said Dietmar Appeltauer, head of central-east Europe sales for Nokia Siemens Networks. “We are confident that EVO.bg users can benefit from a much improved experience.”

Brazil’s National Broadband Plan (Plano Nacional de Banda Larga, PNBL) took another step forward as four of the country's largest service providers have confirmed their involvement in the initiative.

Telemar Norte Leste (Oi), Telefonica Brazil (including Telesp), Algar Telecom (formerly CTBC) and Sercomtel revealed they will participate.

Under the new plan, these four service providers are required to begin delivering 1 Mbps minimal speeds for BRL35 (US$22) a month.

Broadband services would be delivered over a 23,000 km fiber network that will be run by former state monopoly telco Telebras to deliver broadband services 40 million households by 2014.

China Telecom has selected Alcatel-Lucent (Euronext and NYSE: ALU) to supply PON equipment for its “Broadband China, Fibre Cities” project. The project aims to supply more than 26 million people in unserved and under-served areas of China with new broadband services.

The "Broadband China, Fibre Cities's project will see the deployment of a mix of PON technologies connecting homes, office buildings and remote “nodes.” The nodes will then support fiber-to-the-node (FTTN) delivery of broadband services, wherein the final distribution of broadband signals will use existing copper wires. Alcatel-Lucent will supply its Intelligent Services Access Manager (ISAM) product family, which includes a mix of GPON, EPON, and DSL technologies.

Wei Leping, Chairman of China Telecom Science & Technology Committee, said, “China Telecom launched ‘Broadband China, Fibre Cities’ strategy at the beginning of 2011, which aims to realize optical network coverage in all the cities in three years. By 2015, China Telecom will achieve an FTTH coverage of 100 million households and 30 million FTTH subscribers. Leveraging Alcatel-Lucent Shanghai Bell's leading broadband access portfolio and Alcatel-Lucent's enriched deployment experience for other operators worldwide, we are able to provide the urban users the experience of web surfing at the speed of light."

Rajeev Singh-Molares, President of Alcatel-Lucent’s activities in the Asia-Pacific Region, said: "This project represents another major milestone in the rapid modernization of China's telecom landscape, and highlights the deepening relationship between Alcatel-Lucent and China Telecom, one of the world's largest and most dynamic service providers."

Following the deployment, China Telecom will be able to offer subscribers a range of consumer and business services including IPTV, video on demand, voice over IP (VoIP), and more at speeds of up to 50 Mbps, all with guaranteed quality of service (QoS) levels. This project is part of China Telecom’s plan to extend its FTTH coverage to 100 million users by the end of China's 12th Five-Year Plan (2011-2015).

It is not surprising that China’s PON CPE (customer premises equipment) vendors are doing well in this highly cost-sensitive market. Building, testing, and qualifying FTTx CPE requires skilled labor, lots of it. In addition, China leads the world in consumption of FTTx equipment, providing the PON CPE vendors a strong home market.

However, China’s FTTx CPE vendors are not simply finding cost savings at the margin. A number of them are leading innovations, creating PON ONU/ONT (optical network unit/optical network terminal) devices that cost around 40% less than today’s equipment.

These innovations could bring PON CPE costs to within 1.5x the cost of comparable DSL equipment. When applied to 10G PON, this price reduction may serve as the catalyst for adoption.

We focus here on Cambridge Industries Group (known as Cambridge or CIG) and Superxon (Chengdu) Technology Ltd., two privately held PON CPE vendors in China that have developed cutting-edge technologies for significant savings.

Cambridge was founded in 2005 and is a significant independent supplier of GPON ONTs. Dr. Gerald Wong, chairman and CEO, reported in October 2010 that its revenues had grown at a CAGR of more than 125% over the past three years. Wong brought both start-up (Photonic Bridges) and large-company (Lucent) experience to Cambridge.

Cambridge is a leader in the charge to bring BOSAs (bidirectional optical subassemblies) on board for PON equipment. Cambridge publicly discussed BOSAs back in 2009 and now holds a trademark for BOB-BOSA on Board. BOSA-on-board ONT designs enable significant cost savings, around 40% when compared to traditional optical module–based designs.

This saving is significant in GPON, where PON ONTs are still at least twice the cost of DSL/VDSL/ADSL CPE.

Bringing BOSA-on-board ONT equipment to market presents challenges, requiring calibration and testing of each ONT device, as well as testing and qualification by system vendors and service providers.

We are confident that Cambridge is overcoming these challenges. Cambridge claims that its GPON ONTs are interoperable with “practically every” GPON OLT in the industry. It has more than 500 employees and can apply its manpower to BOSA-on-board ONT device calibration and testing. In early June 2011, Cambridge announced its new manufacturing facility, more than doubling its former capacity.

Ovum’s upcoming brief on BOSAs will discuss the movement to BOSAs in the PON market along with implications for the ecosystem.

Superxon’s founders and employees include some formerly associated with Fiberxon. Fiberxon was acquired by MRV and then merged with Luminent to become Source Photonics. One of Fiberxon’s and Source Photonics’ former key executives was Jacky Lu, who is now CEO and president of UTStarcom. Given this relationship, we believe UTStarcom was an early customer.

Superxon is supplying PON equipment to the major system vendors in China. Based on conversations with component vendors, we believe that Superxon is gaining market share. Its competitive strategy includes BOSA designs for 10G PON equipment.

The major impediment to 10G PON is the cost of the optics and therefore the high cost of equipment. Savings achieved through BOSA-based 10G PON equipment might be sufficient to support the business case for 10G PON.

Superxon’s competitive product positioning also includes EoC – Ethernet over Coax. Products include cable line terminals and cable network units. This positions Superxon to capture market share when China’s cable industry adopts PON for triple-play services – despite delays, we do expect this to happen within the next few years.

Perhaps Superxon’s management team saw the importance of both patent holdings and ISO certifications during the acquisition process for Fiberxon. The company’s news site is dominated by announcements concerning patent filings and patent grants. Superxon has already been granted 29 patents, an impressive amount for a company that was founded in late 2007. In addition, its website mentions three ISO certifications.

China’s PON CPE vendors are developing cutting-edge technologies leading to significant cost savings. This competitive advantage serves Cambridge and Superxon well in China’s fast-growing PON market. It also works well outside of China, where OEMs and service providers alike understand the business case implications of PON CPE equipment that approaches the cost of DSL CPE equipment.

Telefonica Brazil is moving forward with plans to expand its Fiber to the Home (FTTH) coverage to about 1 million homes this year with an emphasis on the Sao Paulo region.

Already, Telefonica Brazil has wired up 400,000 homes with FTTH, 20,000 of which are currently using the service, but would like to increase the subscriber base to 70,000 users by the end of this year. Ultimately, the provider wants an installed base of 1 million subscribers by 2015.

The FTTH expansion will be funded by a $126 million investment plan from its parent Telefonica (NYSE: TEF). In addition Telefonica, a TeleGeography report citing unconfirmed sources revealed that Telesp has signed an 'untied' loan agreement with the Japan Bank for International Cooperation (JBIC).

This latest FTTH drive follows an earlier announced plan by Telefonica to increase capex spending by 52 percent in Brazil over the next three years and combine its wireline and wireless holdings into one unit.

Telefonica Brazil's bet on FTTH comes at a time when broadband subscribership continues to rise. According a report issued by Associacao Brasileira de Telecomunicacoes (Telebrasil), Brazil's wireline broadband rose 20.5 percent to 14 million subscribers since 2010.

SaskTel is once again putting Alcatel-Lucent (NYSE: ALU) to work in its Fiber to the Premises (FTTP) program that will reach in nine of its nine largest urban centers.

Under the auspices of its Next Generation Broadband Access Program (2011-2017), SaskTel will spend CAD 207 million (USD $216 million) this year and about CAD 670 million (USD $699.7 million) over the next seven years to build the FTTP network in its nine largest urban centers–Saskatoon, Regina, Moose Jaw, Weyburn, Estevan, Swift Current, Yorkton, North Battleford and Prince Albert.

Leveraging Alcatel-Lucent's High Leverage Network (HLN), SaskTel will deploy a network infrastructure that can support both its ongoing wireless, including LTE, and wireline service initiatives for its business and residential customers.

For this particular program, SaskTel will leverage five key components: the 5780 Dynamic Services Controller (DSC) for subscriber management; the 1830 Photonic Service Switch (PSS); the 7750 Service Router (SR); the 5620 Service Aware Manager (SAM) for end to end network management including photonic management integration; and the GPON-based 7342 Intelligent Services Access Manager Fiber-to-the-User (ISAM FTTU) to deliver FTTP services to wireline business and residential customers.

SaskTel and Alcatel-Lucent are hardly strangers as the two companies worked before on SaskTel's Fiber to the Node (FTTN) deployment that began in 2006 via its Next Generation Access Infrastructure (NGAI) program.

BT (NYSE: BT) Openreach is confident that by the end of this month its fiber network will pass five million homes and businesses.

To reach its goal, Openreach will equip 66 additional telephone exchanges with fiber that will enable its wholesale customers like Talk Talk and Carphone Warehouse to deliver higher speed broadband services.

Spread across Britain, the 66 new locations cover almost one million homes and businesses with the majority of them being enabled in 2012 and others set to go give live by the end of this year. Openreach added that it would name other locations in the next few months.

“Being able to bring faster broadband speeds within reach of more than five million premises is a significant milestone and we are well on our way to passing 10 million in 2012 and two-thirds of UK premises by the end of 2015″, said Liv Garfield, CEO for Openreach, adding that” this is the largest single commercial investment in fiber-based broadband infrastructure ever undertaken in the UK and is one of the biggest civil engineering projects running in the country at this time.”

Complementing the fiber deployment in areas where loop lengths are too long to deliver VDSL2-based copper broadband or too cost prohibitive to run fiber directly to homes and businesses is a new wireless broadband access technology on the Isle of Bute in Scotland.

Developed in tandem with the University of Strathclyde, BBC Research and Development, Steepest Ascent, Berg Design and Netpropagate, the new wireless technology is set on assessing how the “white spaces” in the Ultra High Frequency (UHF) TV can be used to deliver broadband services.

These so-called "white spaces" are the unused portions of digital TV spectrum that are becoming available as more consumers switch from analog to digital TV services.

Garfield said that while “it’s still early days but our hope is that this technology may provide an effective solution for ‘not spots’ and ‘slow spots'” Openreach is using the trial to see if white space can help homes that either can’t get wireline-based broadband service or can only get dial up speeds service due to the length of their line from the nearest telephone exchange.

The table below provides a quick roundup of how the top U.S. wireline service providers performed in Q1 2011 according to access line loss, broadband and video growth. It also lists ongoing activity such as mergers and acquisitions that can affect quarterly performance.

EPB, the electric power distributor in Chattanooga, TN, that made waves last year by offering 1-Gbps services over its new GPON FTTH network, has strengthened its ties with its GPON equipment supplier, Alcatel-Lucent (Euronext Paris and NYSE: ALU). The two companies have partnered to develop smart grid energy management services using the GPON FTTH network, with the analysis of energy usage as an initial step.

A growing number of utilities see FTTH networks as a means to support their smart grid efforts (see "Fiber-enabled smart grid initiative launched on Prince Edward Island" and "Central Indiana Power deploys FTTH-based smart grid" for examples). Speaking with Lightwave at last year’s FTTH Conference in September, EPB Executive Vice President and COO David Wade and EPB Fiber Optics Vice President Katie Espeseth made no secret of their desire to leverage the GPON infrastructure for smart grid applications as well as communications services (see “Who needs 1-Gbps FTTH” from the November/December 2011 issue of Lightwave).

Thus, in addition to connecting homes, EPB also is using the GPON network as a backbone to connect sensors and control devices at locations throughout its electrical grid. This will provide EPB with a high-bandwidth platform through which it can measure, monitor, and control its electricity distribution network in real time.

"With today's power grid infrastructure model, most electric power customers pay one rate per kilowatt hour — regardless of when the power was generated. But the cost to generate power can vary from time of day, time of week, and time of year. Plus, today's electric meters can give us only limited after-the-fact information,"said Harold DePriest, president and CEO of EPB. "Our smart grid is intended to not only provide customers the ability to better manage their energy use, but also alert us, and the user, in real time to any spikes in usage, so that immediate action can be taken if there is a problem within a home or business. To do that, we need to be able to analyze the network at far greater levels of detail than has been possible before."

Alcatel-Lucent's Bell Labs aims to help EPB with such analysis through the development of analytical techniques and tools to better sift through the data it now can access from smart meters, Supervisory Control and Data Acquisition (SCADA) systems, and other sources. The hope is that EPB can leverage its GPON network to better detect and fix distribution grid anomalies before they degrade services, more efficiently manage power purchases from outside electricity suppliers such as the Tennessee Valley Authority, and offer customers energy management services of their own.

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