Former British Prime Minister Harold Wilson once famously remarked that “a week is a long time in politics.” Few would doubt that, but judging from the change in mood between Broadband World Forums 2011 and 2012, if a week is a long time in politics, a year is an eternity in the telecoms market.
You could barely move at BBWF 2011 in Paris without having vendors lauding their fiber technology. The message was pretty clear: Fiber is the future, and copper is on the way out.
Well, fast-forward a year to Amsterdam, and copper was back in the limelight, with vendors being forced to accept the reality that many operators are simply not in the market for networkwide FTTH deployments. They don’t have the cash to pay for them and are skeptical of the benefits of rushing to FTTH.
As a result, this year vendors at the conference placed their “copper acceleration” technologies, such as line-bonding, vectoring and G.fast, under the spotlight while pushing FTTH technologies to the periphery.
Evolution, not revolution
Many European operator executives at the event spoke of how they had been forced to scale way back on their original bold FTTH-deployment plans, not only because of the deep recession gripping the continent but because they had initially vastly underestimated the cost and time of deploying networkwide FTTH.
As a result, many spoke more of a slow and steady FTTH “evolution” than of a fast “revolution” and said that the only way they would realistically be able to migrate to an all-FTTH network would be by gradually deploying FTTH when they could afford to rather than embarking on an aggressive deployment plan.
“We know that we are eventually going to end up at an all-fiber network,” said Wim De Meyer, vice president of network planning at Belgacom,” but the question is really the time frame. We can’t get there in a couple of years. It’s going to be a long process and could take us thirty or forty years to get there.”
However, European incumbents need to find some way of offering 100Mbps services in order to fight off the competition from cable MSOs and even “niche” FTTH players that deploy networks in upscale areas.
It is this need for speed (quickly and cost-effectively) that is driving interest in copper-acceleration technologies. Vectoring was the undoubted star of the show in Amsterdam, with operators such as Belgacom, Telecom Italia, Telecom Luxembourg, Telekom Austria and Telecom Argentina all highlighting their interest in the technology.
Belgacom is working with Alcatel-Lucent to test vectoring and expects to launch field trials in the near future. It says that vectoring will enable it to offer nonshared speeds up to 100Mbps and even offer guaranteed video-grade speeds of 50Mbps to subscribers.
Belgacom’s De Meyer said that headline speeds, though often irrelevant in service provision, had become more important in the battle against rival cable operators that were heavily promoting their DOCSIS 3.0-powered 100Mbps services, meaning that Belgacom needed a fast and cost-efficient way of delivering similar-speed services.
Although current vectoring technologies are effective only to about 1km of the exchange – offering about 80Mbps – De Meyer said that Belgacom will extend the range of vectoring by deploying “VDSL booster boxes” further into its network.
The core weakness of vectoring remains its relatively short distance of effectiveness. But this is not a significant problem in many European countries, because a substantial number of subscribers’ residences are located relatively close to the cabinet. Sandro Dionisi, head of Telecom Italia Labs, told delegates that his company had deployed 150,000 street-level cabinets in Italy, meaning that the average distance between its fixed-broadband customers and the cabinet was only 400m, enabling Telecom Italia to deploy vectoring highly effectively to the vast majority of its subscribers.
What does this mean for Asia?
One intriguing question raised by the rise of vectoring and other copper-acceleration technologies in Europe is what it means for Asia Pacific, where FTTH/B technology is already making strong headway in the market. Will Asia Pacific operators reassess their FTTH/B plans and try to extend the life of their copper networks instead?
The answer varies from market to market, and it is pretty safe to say that the leading Asia Pacific FTTH/B markets, such as Hong Kong, South Korea, Japan and Singapore, are not going to be changing their plans. Their courses are well set.
The really interesting markets in terms of vectoring are those midtier markets, such as Malaysia, Thailand and Indonesia, where nationwide FTTH is not going to happen for a long time but where a lot of copper – albeit of highly variable quality – is already deployed and offering relatively low-speed DSL.
In Malaysia, for example, Telekom Malaysia is going to have to figure out what it wants to do with its legacy DSL network, which it is operating outside of its new High Speed Broadband (HSBB) FTTH footprint. Does it want to spend money building new exchanges and pushing fiber closer to the subscriber so it can deploy vectoring?
Unlike its European counterparts, Telekom Malaysia is not facing significant competition from other fixed-broadband providers, so it does not face the competitive pressures Belgacom does and therefore does not need to invest further in its copper network from that perspective.
What might drive the likes of Telekom Malaysia to consider moving toward being able to deploy vectoring and offering high-speed copper services on its DSL network is the possibility of then being able to offer more-advanced services – especially video – to these subscribers.
However, with many operators already able to deploy OTT IPTV services on low-bandwidth networks – as Telkom Indonesia is already doing with its Groovia Lite service – how much more can they really gain from putting more bandwidth and extra investment into their DSL networks?
Telkom Indonesia is already deploying FTTH in new apartment blocks in upscale areas of Jakarta and is also planning on extending fiber into brownfield areas. But this is really because the company is coming under competitive pressure from rivals such as First Media and BizNet rather than because the extra bandwidth will enable it to offer new services.
It is because of these competitive pressures that we might see vectoring eventually deployed in a market such as Thailand, where the three DSL operators – True Online, TOT and TT&T – cannot afford to deploy wide-scale FTTH but compete fiercely on the ground for subscribers, with service speed being a prominent marketing tool. True has already deployed VDSL services and is offering 80Mbps speeds to some subscribers, and vectoring might enable rival operators to match and exceed True’s network speeds – especially in key urban markets – and strike a powerful counterpunch.
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
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