The Second Revolution of Optical Networks: The Large-scale Development of FTTR
The FTTR market consists of two major segments: The first is indoor optical cable installation provided by construction companies and interior design companies. The second is indoor optical cable installation provided by carriers.
1. The market segment of indoor optical cable installation provided by construction companies and interior design companies
This market segment concerns newly built houses and apartments and pre-owned houses and apartments.
1) Newly built houses and apartments
Newly built houses and apartments mainly involve real estate developers. Government departments release codes or technical white papers for communications facilities. At the national level, responsibility lies with the Ministry of Housing and Construction and the Ministry of Industry and Information Technology (MIIT), and at the local government level, the Administration of Housing and Construction and Communication Administration is responsible. China has positioned the construction of residential buildings with communications facilities as a basic necessity for work and life, much the same as water, electricity and natural gas.
As early as 2012, China's Ministry of Housing and Construction released the Code for Optical Fiber to the Home Communication Facilities in Residential Areas and Residential Buildings, which stipulates that in new residential buildings, fiber should replace Ethernet cables and telephone lines and be deployed to the entrance of homes. This code controls telecom network construction standards from the source. It has led the whole ecosystem and industry, and promoted the rapid development of FTTH in China.
If a previous code still defines that Ethernet cable and voice cables must be installed at home entrances, then multiple access modes will exist for fixed broadband networks such as FTTB/C and HFC. This will inevitably delay the progress of developing optical networks in China.
Today, China's 14th Five-Year Plan and the 2021 government work report have set out requirements for the development of 5G and gigabit optical networks, aiming to develop China into a “Cyber Powerhouse” and accelerate the digital economy. On March 24, 2021, the Ministry of Industry and Information Technology (MIIT) released the Dual-Gigabit Action Plan to promote home-cabling and optimize gigabit wireless LAN networking. On April 6, 2021, 16 ministries and commissions in China jointly released Guidance on Accelerating the Development of Digital Homes and Improving Residential Quality, encouraging the construction of fiber-to-the-room and fiber-to-the-desktop, and focusing on improving the quality of residential indoor networks. As a result, government departments in Fujian, Shandong, and Yunnan in China have developed building communication standards for FTTR. They specify that indoor cabling should adopt fiber instead of Ethernet cables. The Fujian standard is the Building Communication Infrastructure Construction Standard, which was released on August 1, 2021. The Shandong standard is the Technical Standard for Intelligent Building Engineering, which was released on April 1, 2022. The Yunnan standard is the Construction Standard for Fiber-to-the-Home Communication and Cable Television Facilities in Residential and Commercial Buildings, which has been drafted for consultation.
To guide the development of the ecosystem and industry and to improve the customer experience, there are three key points for formulating FTTR standards for communication facilities inside buildings:
First, Ethernet cables are no longer considered for indoor cabling, because they would affect the development of end-to-end full-fiber networks.
Second, fiber electric composite cables are recommended for power over fiber. If traditional flat fiber is used, fiber-connected Wi-Fi devices need to be connected to an external power supply, which would impact the decor of houses and user experience.
Third, the demarcation between real estate developers and carriers needs to be clarified. The home information box, A86 panel box, and fiber electric composite cables are constructed and installed by developers. The master FTTR gateway, slave FTTR gateways, and optical splitter are installed, provisioned, and maintained by a carrier selected by the end user.
2) Pre-owned houses and apartments
More details about this category are provided in “The indoor FTTR cabling code of Communication Engineering for New Residential Buildings” issued by the national, provincial, or municipal governments.
For end-users, carriers need to develop a “Home Decoration Cabling Manual” for FTTR and a corresponding video. The manual and video should be available in the carrier's service center so that end users can view the video and obtain the manual at any time. Online business halls should also play the video.
The interior design industry and mainstream interior design companies should conduct communication activities and hold forums to discuss and develop scenario-based FTTR solutions.
2. The market segment of indoor optical cable installation provided by carriers
1)Top executive leadership
As the second revolution of optical networks, FTTR can build up its brand image only when it is scaled up. This involves cost budgeting, package design, marketing channels, installation and maintenance capabilities, business processes, and digital capabilities. It involves multiple departments and requires strategic determination and roadmap from top managers.
2) Standardization
Only standardization can achieve large scale and premium quality. For standardization work involving large-scale FTTR deployment, carriers need to formulate the following standards:
Cable technical specifications: encourage industry associations to formulate technical standards for fiber electric composite cables and connection components to promote ecological and industrial construction.
FTTR installation procedures: formulate a scenario-based installation process, installation standards, and terminal selection. Terminal types include A86 panels, desktop, and ceiling-mounted terminals.
Training materials: develop systematic training materials.
3) Marketing capabilities
Public publicity: produce easy-to-understand FTTR advertorials and videos, and publicize and broadcast them in the mass media.
Package design: design premium, differentiated, and modular packages. Carriers should increase the FTTR sales commission for marketing staff to motivate FTTR sales.
Five-star business hall: set up the FTTR service-experience environment that users can experience onsite.
Expand sales channels: includes business halls, online sales channels, ecosystem partners, and installation and maintenance engineers and so on.
4) Installation and maintenance capabilities
Installation and maintenance capabilities sit at the core of competition and the sustainable development of fixed network services, especially in the context of home DICT development. The installation of FTTR is more complex than FTTH. Therefore, the bottleneck in large-scale FTTR deployment rests with installation and maintenance capabilities.
There is a need to implement a series of measures:
Set up an engineer team for VIP users: This team would comprise a certain number of engineers and professionals with high-level skills to expand the team of smart home engineers and provide differentiated service levels and capabilities.
Increase the salary of installation and maintenance engineers: There is still a salary gap between installation and maintenance engineer and those responsible for delivery. The low income of skilled people cannot reflect the value of their skills, and is not conducive to retaining skilled talent.
Strengthen training in installation and maintenance: Set up an FTTR training base to carry out installation and maintenance training, examinations, assessments, and certification based on the home DICT service.
5)Digitalization capabilities
Digital capabilities of "planning, acceptance, and maintenance" must be built to make FTTR Wi-Fi visible, manageable, and controllable so as to improve user experience and service efficiency.
“Planning”: Simulation planning for visualized effect, including site survey, requirement collection, device installation location planning, effect simulation, and user confirmation.
“Acceptance”: Three-step acceptance ensures quality. Network acceptance includes ODN, devices, and connections topology. Service acceptance includes Wi-Fi speed tests, IPTV, and Internet access. User confirmation is involved in acceptance.
“Maintenance”: includes remote demarcation, intelligent fault diagnosis, and the automatic output of quality evaluation reports.
6) Others
Construction tools: Further optimize and improve construction tools and processes.
FTTR service exhibition hall: Set up a service exhibition hall for external ecosystem partners based on home & SME DICT services to improve the perception of FTTR quality for governments, industries, society, and the public.