FTTx Gains a Foothold

Today, advanced multimedia services and corporate-based broadband applications, such as videoconferencing, 4K ultra-high definition video service and 3D games, are spawning more and more traffic, driving the ever-growing demand for bandwidth by increasingly Internet-savvy consumers. Telecom operators have come to realize that the speed capacity of copper wires has hit a bandwidth ceiling and that fiber is the only solution. At the FTTH Conference 2014 in Stockholm, Sweden, we talked to industry leaders about how fiber-to-the-x (FTTx) is impacting broadband access around the world. Mr Arief Musta’in, Head of Broadband Division, Telkom Indonesia, Swisscom’s Head of Rollout and Access, Mr Markus Reber, and Mr Cenk Serdar, Senior Vice President of the Consumer Unit, STC, provided insights about the future of fiber.

By Linda Xu

Today, advanced multimedia services and corporate-based broadband applications, such as videoconferencing, 4K ultra-high definition video service and 3D games, are spawning more and more traffic, driving the ever-growing demand for bandwidth by increasingly Internet-savvy consumers. Telecom operators have come to realize that the speed capacity of copper wires has hit a bandwidth ceiling and that fiber is the only solution. At the FTTH Conference 2014 in Stockholm, Sweden, we talked to industry leaders about how fiber-to-the-x (FTTx) is impacting broadband access around the world. Mr Arief Musta’in, Head of Broadband Division, Telkom Indonesia, Swisscom’s Head of Rollout and Access, Mr Markus Reber, and Mr Cenk Serdar, Senior Vice President of the Consumer Unit, STC, provided insights about the future of fiber.

Burgeoning markets

Over the last two years, FTTx services have witnessed rapid growth. At the end of 2013, the total number of FTTx subscribers surpassed nearly 230 million worldwide at a growth rate of over 25%. As a result, about 250 million homes are now connected via FTTH/B.

There are dramatic divergences in the adoption of FTTx technologies across the world. Asia-Pacific enjoys the leading place in the FTTx access market with the number of subscribers projected to exceed 129 million in 2014, with the highest penetration rate expected in Taiwan, Hong Kong and Japan. Like its Asian peers, Indonesian Telecom Regulatory Authority is committed to making broadband ubiquitous across the entire nation. It aims to introduce broadband access to all 72,000 villages and half of Indonesia’s 242 million people by 2015. Not surprisingly, Telkom Indonesia, the largest communications operator in Indonesia, is aggressively rolling out fiber. As Arief pointed out, “We ordered five million FTTx home buses. Last year, we installed 2.3 million; this year, we’ll install 2.7 million more.”

The EU released the European Digital Agenda, which mandates that half of all subscribers should have access to at least 100Mbps services by 2020. This has triggered explosive growth in Europe’s FTTx market. Among 39 European countries surveyed, the average FTTx coverage reached 24% by the end of 2013. According to the FTTH Council Europe, Switzerland (who recently ascended to the league of FTTH leaders) has 2% household penetration and saw 235% growth in subscribers over the 12 months leading up to December 2013. Out of 73,816 Swiss subscribers, 70% were new subscribers in 2013, which is the highest rate in Europe. Swisscom aims to maintain the momentum. As Mr Markus Reber put it, “We’re providing 2.3 million households with ultra-high broadband by employing vectoring technology (covering over 60% households), FTTS/B solutions (covering over 500,000 households) together with the FTTH solution for one million households by 2015.”

Unlike other parts of the world where hybrid FTTx solutions like FTTC, FTTN or FTTDp are common practice, players in the Middle East target 90% FTTH subscription rate to housing units. In Saudi Arabia, one of the region’s FTTH leaders, Saudi Telecom Company (STC) has been making FTTH deployments at an incredible pace.

Cenk Serdar spoke about STC’s FTTx activities, “We kicked off an ambitious program to deploy fiber in 2011. Currently, FTTH services with up to 200Mbps are available in many parts of the country such as Riyadh, Jeddah and Dammam, the ultimate goal is to deliver speed of up to 1Gbps to residential as well as business customers and expand coverage to most of the Kingdom’s cities.”

Bumps in the deployment road

Paving the way for fiber deployment isn’t easy. There are various challenges facing the construction, installation, and commercialization of an FTTx network. These are the rational planning of the FTTx access mode, efficient transportation of the huge bandwidth, quality assurance of experience for multi-play services, and above all, acquiring regulatory support.

Proper FTTx deployment mode – Many operators with few copper resources or poor quality of copper resources are prone to go with a greenfield deployment strategy, as it involves fewer challenges as compared to industrial or commercial brownfield deployment, which seeks to leverage legacy copper infrastructure.

Arief talked about the situations facing Telkom Indonesia and how they are handled, “We have two strategies for fiber deployment. One is modernization, where we are replacing the existing infrastructure with new copper resources. The second is a greenfield strategy with deployment supported by four global players. Our existing copper is around 25-30 years’ old. We know well the quality of our copper. That's why we decide not to go with vectoring, G.fast. We are thinking of pulling out the copper cable and having only one platform to serve our customer. This is our strategy. We are moving step by step to reduce VDSL2+ by applying the FTTH solution.”

Brownfield deployment isn’t that simple; it requires careful handling of copper and fiber resources. Each fiber strand must be accurately installed and the splicing used in passive optic network installations must be properly verified. The fiber must also undergo end-to-end testing before being offered to customers. Markus explained how Swisscom is exploiting the synergy between copper and fiber, “Fiber-to-the-street (FTTS) is the first step in bringing fiber as close as possible to our customers. Thanks to our excellent existing duct infrastructure, the new feeder cablings including splicing point and the manhole (i.e. distribution point) for FTTS have been utilized for FTTH deployment. We also use the FTTS equipment for deploying the FTTB solution, depending on existing infrastructure and household density to optimize construction cost.”

STC is also going the brownfield route. According to Cenk, “STC adopted a technology-agnostic approach in delivering broadband service via any medium. We are keen to continue maintaining and enhancing our copper network with advanced technologies like VDSL, vectoring and bonding, which are sufficient to deliver 50 to 100Mbps.”

Terrain constraints – Complicated geographical conditions can make the deployment of fiber a little tricky. Indonesia‘s unique geography is characterized by high mountains, dense forests, and scattered islands. Obviously, their FTTx deployments can seem like a real puzzle. In spite of the challenges, Arief emphasized that Telkom Indonesia is pressing ahead with FTTx. “We have already designed a complete integrated infrastructure. If we have small residential areas where our cellular services are good, we can also serve them with the FTTx portfolio. In some Indonesian cities, even eastern Indonesia, such as Kupang, Bali, Makassar Manado, where the penetration for the residential is very low and population density is not as high as Jakarta and our mobile BTSs have already spread out all over Indonesia, we’re also thinking about deploying FTTN, FTTC or FTTH.”

Government support – Government support is also instrumental in facilitating the rollout of FTTH networks. The process of laying fiber involves securing approvals from multiple agencies, which is a key challenge. The lack of government cooperation in addressing this issue would be a major roadblock. Fortunately, many governments have actively rendered regulatory support. As Markus put it, “FTTH is widely seen as the pinnacle of broadband connectivity in Switzerland. At our early stage of development, the Swiss telecom regulator initiated round table discussions with all relevant players in the broadband industry. Rules were agreed upon for economical FTTH rollout to minimize the construction and maintenance costs. Currently, Swisscom has over 20 FTTH cooperative projects in place covering more than one million households and businesses, and more are under negotiation. ”

Investment model – Previously, the hefty investment of fiber deployment was borne primarily by telecom operators. The insurmountable USD35 billion CAPEX on FTTH projects in the past five years has intimidated many carriers, discouraging massive fiber deployment. Today, there is a sort of open network model that is increasingly inspiring and appreciated by several municipal and regional fiber network players in Europe and the world. Countries like Sweden, Denmark and Switzerland, have been deploying open access municipal networks, allowing multiple carriers and applications providers the most capable and flexible platform to provide their services enabled by FTTH technologies.

Markus described the situation in Switzerland, “With the introduction of FTTH, some of the utility companies such as electricity, water, gas, heating and sewage management take the opportunity to leverage their excellent duct and manhole infrastructure to enter into the promising business by offering fiber access to their end users. Often these initiatives are backed directly by the local citizens through public ballots.” Such policies facilitate competition and make fiber deployment more attractive to everyone.

Commercializing fiber services

The limited uptake of fiber services is as big a challenge as the deployment of the service infrastructure. Besides the high cost of these services, the lack of relevant content to be delivered through these networks dampens the potential user’s enthusiasm. In addition to common triple play offerings such as IPTV services and VoD, fiber players have considered marketing 4K and even 8K ultra-high definition video services to fully capitalize on their connection speed advantage. Such offerings would contribute to an inspiring customer experience.

Cenk shared STC’s experience about the benefits of high-bandwidth services, “STC learned from customer satisfaction surveys that subscribers of FTTH and LTE services are less likely to churn and are mostly satisfied with the level of service. This is due to the fact that they don’t perceive limitations on their networks, opening the door for us to run bandwidth-hungry applications like 4K ultra-HD videos.”

The bandwidth-intensive applications and services over FTTH network depend on high-performance optical network terminals (ONTs) to sustain optimal user experience, as ONTs function as the hub that receives the signal from the optical line terminal (OLT) and convert it into usable electronic signals that a user’s telephone, computer, TV, or any other devices can receive. It also serves to communicate IP traffic back to the OLT.

According to Cenk, “STC’s current deployment of fiber ONTs puts some limitations on fiber adoption during the in-house installation. As such, STC is piloting a new kind of ONT in the FTTD scenario that allows for using the existing house wirings and DSL modem upon installation, with the objective being to increase the fiber adoption and save cost in the coming years.”

Orchestration of fixed and mobile broadband

In recent years, although mobile broadband has gained serious traction, it cannot replace fixed technologies especially for data-intensive services. Rather, mobile and fixed broadband must grow synergistically to further contribute to broadband penetration.

Markus gave an examples of how useful FTTx can be, “FTTH is a perfect basis for rolling out small cells in big cities, since the backhaul is already there with breakouts from FTTH feeder to street poles. Reversely, hybrid bonding of wireless into fixed line also provides opportunity to enhance bandwidth on FTTC/S turf.” Synergy was often mentioned at FTTH Conference 2014, for instance, Cenk explained that “over the past years, STC was able to build a considerable customer base in both fixed and mobile business, which is beneficial for cross-selling activities as well as convergence and one-stop-shop initiatives. We believe that fixed and mobile synergy is appealing to improve customer loyalty and retention, increasing ARPU, and optimizing cost. This integration is extended to market offering, sales channels, customers’ care, and the organization itself.”