Category : News

The average cost per megabit of both residential and business broadband continues to decline worldwide with services delivered over cable and fibre networks remaining less expensive per megabit than those delivered using copper/DSL, Point Topic claims.

Point Topic has compiled the latest edition of its global tariff analysis exploring the state of fixed broadband services worldwide, looking at prices and speeds from thousands of services across multiple countries in Q1 2015.

Their analysis confirms that the average cost per megabit of residential and business broadband continues to fall for services delivered over cable and fibre networks.

They also find DSL services provided over copper networks continue to be more expensive per megabit, particularly in the absence of competition from other providers. “As is the case with residential services, the average cost per megabit prices for fibre and cable are more closely matched at comfortably under US$5 while the average price for copper broadband services is much higher at US$18.25 in Q1 2015,” the researchers claim. Across the world on a cost per megabit basis, “Services delivered over copper networks continue to be by far the most expensive and are now more than ten times pricier than those delivered over cable or fibre networks,” they said.

Western Europe enjoys the lowest average price for residential broadband services, Point Topic confirms, while Albania and Iran offer the lowest price entry level residential broadband services.

Western Europe offers the best combination of speed and price when it comes to business broadband services, the analysts point out. Asia Pacific region services are marginally faster, but are also the most expensive. “Business broadband services in the MEA and South and East Asia regions tend to offer the worst combinations of speed and price,” said analysts.

Overall the cost of broadband connectivity seems to be in decline. Point Topic assesses the global average cost per megabit of business broadband services to be $3.77 in Q1 2015, down from $4.10 in the previous quarter. Residential broadband prices declined 1.6 percent to $1.23 per megabit.

PointTopic’s research is generally good reading, but the reality of digital infrastructure deployment remains challenging. The difference between those who have and those who lack broadband access means that even in the US 17 percent (55 million) Americans lack access to fixed broadband, according to the FCC, and this pattern of lack of available service is replicated worldwide. Non-fixed line alternatives such as mobile or satellite broadband provision may help mitigate this digital divide.

PointTopic compares entry level and average tariffs from the pool of 3,086 residential broadband services from operators across 86 countries in Q1 2015.

Each 10 percent increase in broadband penetration generates a GDP increase of 1 per cent, according to the ITU.

West Coast gigabit fiber-optic network and broadband services company Wave says it has raised $130 million to build its fiber network footprint. The company raised the funds via a corporate bond sale led by Deutsche Bank and supported by Wells Fargo, Sun Trust, and RBC Daniels. Wave also announced a new executive team to spend the money.

The company has already decided on the outlines of its expansion. The plans include:

• Expansion into areas surrounding Seattle, Portland, and San Francisco with the addition of more than 1,500 route miles of fiber cable this year
• Completing redundant fiber rings that serve such California markets as Concord, San Jose, Sacramento, and San Francisco with virtual cross-connect services to multiple Bay Area data centers
• Extending its residential gigabit Internet service to more than 10,000 residents this year in Seattle, with expansion to San Francisco and other markets starting this year
• Introducing new business services such as hosted PBX and co-location facilities to its existing IP transport and virtual cross-connect products
• Beefing up the company's construction organization to support network expansion in California, Oregon, and Washington markets.

Wave says it has hundreds of fiber build projects either planned, permitted, or under construction.

Meanwhile, company founder and CEO Steve Weed has named longtime Wave executive Steve Friedman as the new executive vice president of fiber design and construction. Weed also has tapped Harold Zeitz to become president and COO.

"We are thrilled to accelerate our fiber expansion with this additional funding and announce the new roles for Steve Friedman and Harold Zeitz. This furthers our commitment to provide business clients with carrier-class service, and residential customers with the fastest internet speeds at a great price, all backed by exceptional local customer service," said Weed. "Wave is uniquely positioned to deliver these services as a local, profitable, and fast-growing company with more than a decade history, 1,000+ employees and annual revenue in excess of $350 million."

China will invest more than 1.1 trillion yuan ($177.64 billion) between now and 2017 to enhance the nation's fixed broadband and 4G networks, according to the State Council.

The nation plans to invest 430 billion this year to improve network infrastructure. An additional 70 billion yuan will be spent in 2016 and 2017.

The State Council has instructed the nation's three state-owned operators to improve the speed of fixed and mobile broadband services while reducing tariffs.

According to the State Council, by the end of 2015 more than 80% of urban residents are expected to be able to access 100Mbps broadband services. Operators are also expected to deploy a combined 1.3 million 4G base stations for rural areas.

The Council will also continue to process of opening up the nation's fixed broadband market to private competition. This process commenced in November when the Ministry of Industry and Information Technology launched public consultations into the plan.China will invest more than 1.1 trillion yuan ($177.64 billion) between now and 2017 to enhance the nation's fixed broadband and 4G networks, according to the State Council.

The nation plans to invest 430 billion this year to improve network infrastructure. An additional 70 billion yuan will be spent in 2016 and 2017.

The State Council has instructed the nation's three state-owned operators to improve the speed of fixed and mobile broadband services while reducing tariffs.

According to the State Council, by the end of 2015 more than 80% of urban residents are expected to be able to access 100Mbps broadband services. Operators are also expected to deploy a combined 1.3 million 4G base stations for rural areas.

The Council will also continue to process of opening up the nation's fixed broadband market to private competition. This process commenced in November when the Ministry of Industry and Information Technology launched public consultations into the plan.

Currently private competition has been allowed in 16 cities. But by 2017, the market will be open nationwide.

Currently private competition has been allowed in 16 cities. But by 2017, the market will be open nationwide.

Indonesia's PT Telkom has revealed plans to add a 4K TV component to its Indihome fiber-based triple-play service.

PriMetrica quotes Telkom director of consumer services Dian Rachmawan as stating that the 4K TV service will be introduced shortly.

The company is working with set top box suppliers and content providers to develop the service.

Telkom plans to integrate the services with its existing IPTV platform, as well as with new hybrid platforms based on Android.

Telkom is currently testing 4K TV over the live Indihome network ahead of the planned commercial launch. To be effective, 4K TV streaming requires a minimum 50Mbps connection.

At present Telkom offers its Indihome service in 160 cities across Indonesia, and the operator is expanding coverage in these cities. The company aims to have 3 million fiber customers by the end of the year.

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.