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Monday, 06 September 2010 20:30

Back to the future: Analysys Mason recommends FTTN over FTTH

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UK based consultancy Analysys Mason has lobbed another hand grenade into the NBN camp, telling telcos that they should reconsider costly plans for fibre to the home (FTTH) and focus on copper-based technologies such as FTTN combined with VDSL.

The report contends that the growing power and popularity of wireless technologies and services is undermining the business case for costly FTTH deployments.

"Wireless devices and services will continue to capture new consumer telecoms spend (whether this is incremental or substitutive) because this area has the greatest rate of innovation," Analysys Mason argues.

"This growth makes it more difficult for fixed operators because overall consumer spend on telecoms has long since ceased to grow in developed economies," it says. "Many cable operators have been offering superfast fixed broadband connectivity for some time in Europe and North America, but take-up remains troublingly low."

The findings come from a new Analysys Mason report, "FTTx rollout and capex in developed economies: forecasts 2010-2015" and are not directed particularly at the Australian market.

According to the author of the report, principal analyst at Analysys Rupert Mason, "FTTH is often said to be 'future-proof', but the future appears to have veered off in a different direction. The vague promise of future services may appeal to some early FTTH adopters, but will become increasingly ineffective as a selling point unless the rate of innovation in devices and services that are uniquely suitable for FTTH gets some new impetus from vendors and service providers."

He says that: "The future cannot be simply plotted against increasing fixed-line bandwidth." And in a warning likely to strike a particular chord in Australia he says: "Moreover, in an economic environment where governments have to reduce their levels of borrowing, we would expect some to reduce, or rethink, their long-term commitments to fibre roll-outs. Heavy next-generation access investment could be perceived as politically awkward or even inappropriate in markets where budgets for education, health and social welfare are being cut."

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The report recommends that operators should trial FTTH while focusing on less-expensive copper-based technologies, such as VDSL - which in Australia would have to be deployed in conjunction with fibre to the node in order to provide a significant increase in bandwidth over ADSL. "Conditions vary between markets, but in general the business case to move much beyond [FTTH] trials just isn't there and we are already beginning to see some scale-back," said Wood.

"Bandwidth demand for fixed broadband is converging with the bandwidth required to stream TV, and its rate of growth will slow down. VDSL might not be able to meet these demands at some point in the future, but we believe that this point is still a long way off."

The report claims to "highlight the major drivers for and inhibitors to the two main types of FTTx roll-out by telcos: VDSL [ie FTTN] and FTTH." It provides forecasts for 33 individual countries in four global regions with mature telecoms economies (Central and Eastern Europe, Developed Asia-Pacific, North America and Western Europe).

The forecasts cover VDSL and FTTH network rollout, subscriber take-up and capex from the present through to the end of 2015.  Analysys Mason says these forecasts "are based in part on operators' own projections [and] the report highlights the discrepancies between the levels of investment in different markets."

 

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