The impact of fiber networks could potentially erode the business case for satellite going forward, but then how is fiber technology progressing? Here, we take a closer look at one of the key communications’ technologies and the latest developments in the fiber world.
Amidst global economic challenges, demand for fiber optics has remained relatively strong. The number of fiber-to-the-home/or building (FTTH/B) subscribers continues to grow, as does the need for increasingly fast data transmission rates in metro and core optical networks.
While far from the fiber frenzy — and crash of a decade ago — the industry today is humming along to its own tune. “There is plenty of fiber going on,” says Ron Kline, principal analyst, network infrastructure, at technology research firm Ovum. The number of fiber endpoints is growing at various places throughout the world, especially in Asia. As for transmission equipment, several applications already require speeds in excess of 10 Gbps.
One driver is wireless. “There’s been a huge build in all the metros for all of this cell tower business,” Kline says.
Global Fiber Access
Total estimates vary, but the trend is clear. According to ABI Research, the number of FTTH subscribers in mid-2011 was 69.6 million. The FTTH Council’s mid-2011 total was 66 million. More importantly, that’s 10 million, or about 18 percent, higher than in 2010. It’s a healthy clip, but looking just at the United States, one wonders.
In March 2010, Verizon quietly announced that it was ending its build-out of FiOS. In a deal to acquire spectrum from cable companies announced at the end of 2011, Verizon also agreed to co-market its own wireless services with cable’s video and broadband services. The upshot, according to Craig Moffett, Sanford Bernstein senior analyst, is that “Verizon has effectively validated (cable) as the superior set of ground facilities.”
There remain hundreds of small service providers deploying FTTH, supported in part by more than $2 billion in U.S. government broadband stimulus funds. Yet, at the end of Verizon’s costly builds, its concession to cable and focus on wireless is significant. Penetration of FTTH/FTTB (aka FTTx) subscribers in the United States was about 8 percent in 2011, which is essentially unmoved from 2010.
North America at large is looking somewhat stronger. A market analysis commissioned by the FTTC Council and released in September 2011 indicated that the continent had an 18 percent growth in subscribers from the previous year, largely because of activity in Canada, Mexico and the Caribbean.
Shipments of Gigabit and Ethernet passive optical networking (GPON/EPON) equipment, nonetheless, continue to grow. Julie Kunstler, Ovum principal analyst and author of a mid-2011 report on the market said it is no real mystery that, “China is the biggest consumer of FTTx equipment right now and that is set to continue.”
According to the FTTH Council, about 70 percent of the world’s FTTH subscribers currently reside in Asia. This is the result of top-ranking fiber penetration ratios in South Korea, Japan, Hong Kong and Taiwan. But the sheer size of China will shift the market even more toward the Pacific. China Telecom plans to pass 40 million households with fiber in 2011, 80 million by 2013 and more than 100 million by 2015, linking all of China’s major cities along the way.
But, an economic slowdown in China could shift resources away from these ambitious projects. That said, Ovum has predicted that by 2016 China would represent more than 50 percent of the world’s FTTx subscribers.
Deployments are occurring elsewhere, as well. The Council notes that from 2010 to 2011 the number of countries with measurable household penetration of FTTH subscribers increased by four, from 24 to 28.
Newcomers include Turkey, Ukraine, Hungary and the United Arab Emirates, the latter leaping to first place, with one-third of all homes in that Persian Gulf state taking fiber services. That ranking followed an aggressive rollout by UAE-based Etisalat, which gave Abu Dhabi bragging rights as the first capital city to have a complete fiber optic network. Another notable on the FTTH Council list was Russia. Installation of fiber in buildings across 31 Russian cities by cable TV operator ER-Telecom made it the fastest growing market on the European continent.