Monday, February 16, 2009

The case for FTTH - once more

In defending FTTH, one runs up against two problems: price (it's expensive) and speed (do we need all that?). Of course these are interconnected (if demand is high enough, pricing can go down and FTTH will be more successful and the business model works).

Skeptics abound, especially among the cable industry, so it takes tirelessly summing up advantages of FTTH (viz-a-viz cable). Here's another (concise) effort.
  • Growth. At current growth rates, access networks will soon run out of capacity.
  • Video. The internet was originally designed with data in mind. Soon graphics came along, and now video is all over the place. All the e- and tele- applications of the world probably have a video component, often for upstream too (symmetrical, that is). Of course, there is IPTV too. Plus: video evolves toward HD, 3-D and holography.
  • Apps. New applications will come as FTTH spreads, pretty much the way electrical instruments were developed when the electric grid became universally available. Check out this Alcatel-Lucent release (on the ng Connect Program) and this one from Aepona, to see how application development and how to bring them to end users are hot today. What it all means? Telcos need to partner if they want reap new revenue steams.
  • File sharing. This goes beyond illegal P2P. Some examples that make files go up, down, left and right through the network: file sharing (legal versions), place-shifting (Sling), cloud computing, storage and online backing-up.
  • Femtocells. These in-home miniature base stations backhaul mobile traffic over the user's BB connection (freeing up both outdoor base station capacity and mobile operator backhaul capacity). They will become an essential part of 4G networks operating in higher frequency bands (2.6 or 3.5 GHz) and put a strain on the subscriber's BB connection.
  • Copper doesn't cut it. Copper networks were designed with just voice in mind. DSL did wonders, but is running out of steam now.
  • Timing. Even if we don't need it today, we certainly need it in 10 years time. Build-out takes long, so we better start today.
  • GDP grab. If you don't build it, somebody else will. Cities and entire nations are already competing to build out FTTH networks in order to grab some extra GDP growth. Hence, broadband stims are finding their way to the market.
  • Opex. FTTH is cheaper to service than copper.
  • Green. Redundant FTTH networks save on travel expenses, fuel, carbon emissions, etc.
  • Redundancy. We need excess capacity because we hate waiting. We also need low latency for fancy apps such as gaming.
  • Moving. Perhaps not everybody needs FTTH, but people move - on average, once every 7 years (could be a bit slower today). So, not every body but certainly every home needs FTTH. Also, even if only families (roughly one third of all homes) are the addressable market, one has to realise that singles (one third) and couples (one third) tend to morph into families.
  • End-game. Not just copper owners switch to fiber, alternative carriers and utility companies (with no legacy to worry about) also choose FTTH - not coax, mind you. Even cable execs acknowledge that FTTH is the end game; and those that do not, call their Docsis 3.0 service 'Fiber Power'.
(Who can switch the order in such a way that it makes a nice acrostic and the red letters connect to a relevant term?)


Anonymous said...

Would you mind if I copy this text to other sites including a new facebook group "Connect Canada" ? Of course I can link back to your blog also.


Tim Poulus said...