Fiber networks are needed to extend and boost the density of many services, including mobile transport, enterprise cloudification, and home broadband. For operators, the efficient planning, deployment, and utilization of fiber networks is now a core competitive strength and fiber a key asset.
We’re entering a new era of development in global information technology and the global economy. Society is becoming digital and smart, driven by extensive basic connectivity, ultra-high bandwidth, and a superior experience. But, if operators want to provide basic connectivity, it’s essential they build full-fiber networks that can support future service development.
In 2010, 50 percent of the world’s operators provided fixed-mobile convergence (FMC) services, but a decade on, 90 percent provide full-service access. Not only have they expanded their service scope, but they’ve also cut customer churn by 50 percent and boosted combined ARPU by two to three times. For operators, FMC full-service operations are strategically vital.
From a service development perspective, whether it be 5G-ready mobile transport or business-oriented leased line that supports enterprise cloudification, you need an optical fiber service to support it. Leading operators are investing heavily in building fiber network infrastructure and managing it as a strategic resource. At the same time, fiber networks are enticing many strategic investors as they deliver stable, high returns. For example, when Dutch, Indian, and Thai operators packaged fiber assets, it drew investment from a number of pension funds.
The evolution of the telecom industry can be viewed as a continuous process of bringing optical fiber closer to the user and increasing density. As fiber networks have developed from backbone to metro and then to the access networks of today, they’ve moved closer to network terminals.
Fiber used to be deployed only in areas with high user density. Today fiber is almost ubiquitous, supporting mobile transport, enterprise leased lines, and home broadband services. And 5G, for example, depends on a fiber backhaul network. A leading operator in China initially configured its 5G base stations to leverage almost 100 percent fiber backhaul, and a pioneering Korean 5G operator has set a requirement for 90 percent fiber to the site. Leading European operators have set targets of up to 70 percent, with a sub-500 m coverage range for 5G sites. This is equivalent to how fiber to the neighborhood (FTTN) and fiber to the home (FTTH) deployment is becoming increasingly dense.
One advantage of fiber is that it offers long-term usage. Once laid, it has a lifecycle of up to 30 years. Moreover, the cost of materials from the increasing number of fiber cores accounts for a very small proportion of the whole end-to-end cost of fiber deployment. As such, operators should consider future multi-service development when first planning fiber networks. This should encompass not only the operator’s own services, such as enterprise leased lines, mobile transport, and home broadband, but also more service scenarios like safe cities.
One incumbent operator in Shanghai has achieved incredible success in fiber services. Staying one step ahead when it comes to building and leveraging a full-fiber network, the operator has even pioneered construction of China’s first Gigabit City.
The operator started to boost investment in fiber infrastructure in 2016. By 2019, it had achieved 99 percent fiber coverage, with 250,000 10G PON ports deployed in its network, covering over 20,000 gigabit-neighborhoods. It boasts 10 million gigabit-fiber users and has deployed Smart Wi-Fi in 1 million homes.
It has also promoted the release of a Gigabit City Construction Performance Indicator System that can be used to evaluate the level of development of urban gigabit broadband and 5G networks and provide a guide for urban gigabit broadband and 5G construction.
Typically, operators spend 10 to 15 percent of CAPEX on fiber on an ongoing basis. Given such a huge investment, they need to ensure rollout occurs in the most efficient way possible. A leading operator in China provides a great example of how to do so. After it obtained a fixed service license at the end of 2013, the operator was faced with a lack of fiber infrastructure coupled with the need to invest in 4G infrastructure. The operator had previously adopted an on-demand approach to construction and lacked unified FMC coordination and planning because its fiber construction is project-driven. However, new service requirements prompted it to consider more efficient ways to build a basic fiber network.
After a period of research and trial and error, the operator devised a plan to implement grid-based integrated service areas on its fiber network. The plan was based on the business division’s business plan. Planning was based on each grid’s service development prospects, with the requirements of mobile services, enterprise services, and home broadband services considered as a whole. And fiber was deployed in advance to lay a foundation for the fiber infrastructure and support future service development flexibility.
By adopting a full-fiber service grid for the planning and construction of its fiber network, the operator not only dramatically cut the amortized investment costs of individual services, but also considerably reduced service provision time and shortened ROI. In one province, average rollout time for enterprise services dropped from 25 to 7 days, average OSP construction cost for mobile transport base stations fell by 50 percent per site, and average OSP cost for home broadband services decreased by 84 percent.
Why does the full-fiber service grid deliver such tremendous benefits? The most important factor is that it achieves full coverage through unified planning, avoiding multiple instances of fiber network construction driven by the traditional project-based model. When building a fiber network, construction accounts for 50 percent of costs and ODN components for 30 percent. Yet, a 24-core optical cable is only 18 percent more expensive than a 12-core cable, but the deployment costs are practically the same – so although one-time planning and construction like this introduces a small short-term bump in costs, it eliminates secondary construction and materials costs. It also reduces the preparation time needed for subsequent service development.
At the same time, planning for “thick coverage and short access”, which means placing the fiber access point as close to the user as possible, preferably 50 to 80 meters, can dramatically lower the cost and time of subsequent service rollout, saving end-to-end costs and time. Thick coverage and short access on the basis of full network coverage is a key reason why the full-fiber service grid improves revenue.
Leading operators recognize the strategic importance of building full-optical networks. In China, Japan, and Korea, where fiber network penetration is high, full-optical network coverage has been achieved. Europe is stepping up copper to fiber replacement to satisfy the requirements in EU DAE2025. Southeast Asia, South Pacific, and Latin America are all constructing full-optical networks. In Thailand and Vietnam, more than 50 percent of homes are connected with fiber, and both the UAE and Qatar are using fiber to serve users better. In Africa, all operators are developing full-optical networks to serve the majority of users. For operators, the next three years is the best time to build full-optical networks in readiness for mass popularization in five years.
Huawei doesn’t just provide E2E solutions for operators, it also helps ensure the healthy development of their services with E2E commercial solutions for the planning, construction, and operation of full-fiber networks. Huawei uses a Smart CAPEX solution, with modeling based on population density, cost, and coverage, to help operators plan business outcomes for their fiber networks, plan and construct integrated service areas, and achieve innovative optical splitting with unequal ratios and pre-connections to optimize deployment efficiency and quality. Of course, Huawei will also provide 10G PON for integrated service development and support next-gen PON technology for future access networks.
Through strategic cooperation with Huawei, operators can focus more on business and service development as well as building competitive advantages and business success.
Huawei will work with operators to build full-fiber networks to support the future digital economy and usher in a smart society.