Telecom bright spot: FTTH (fiber-to-the-home) starts to take off

Telecom bright spot: FTTH starts to take off

An area of communications infrastructure where deployment rates will skyrocket over the next 12 months? It may sound like a pipe dream, but that’s what market research firm Render, Vanderslice & Associates projects for one emerging technology.

By: Joan Engebretson
America’s Network Weekly

That technology is fiber-to-the-home (FTTH) — the residential broadband alternative that enables service providers to offer voice, video and data through either a green-field installation or a complete overbuild of the local phone and cable TV network.

The 330% growth forecast between 2002 and 2003 was based on more than 600 interviews, including companies that have begun an FTTH project or have one planned. Report author Mike Render insists that the numbers, if anything, are conservative.

Because FTTH is such a new opportunity, the “315,000 homes passed” projected for 2003 is unlikely to generate an immediate telecom rebound. Yet it is an encouraging sign for the technology’s long-term prospects.

“Municipalities, [real estate] developers and CLECs will be the biggest providers in the next couple of years,” said Render, adding that small independent telcos also are beginning to deploy the technology. Researchers also spoke to the RBOCs and found “serious interest by at least two,” Render said.

FTTH is beginning to gain traction because service providers have begun to see it as a more attractive alternative to hybrid fiber/coax (HFC) cable systems, said James Salter, president of the FTTC Council.

Of the 2000 municipal electrical utilities nationwide, 91 already have built broadband networks, said Salter. “Eighty-nine are HFC, but the last two have been FTTH, and we expect that the majority going forward will deploy FTTH.”

The average municipal electrical utility has about 7500 customers, Salter said, but the 50 or so largest ones have over 100,000. “They serve 40 million all told in the US.”

FTTH makes sense for these companies because they have rights of way, they rate well on service and “people like local control,” Salter said. Usually the utility becomes the service provider, but in some cases, utilities have opted for an open network model. In that case, the utility simply builds the network and invites multiple service providers to use it.

“Its too early to determine if the open access model is economically viable vs. retail,” Salter said.

Real estate developers also follow one of two different FTTH models, Salter said. “Some put in the infrastructure because it helps sell homes, but they really don’t want a part in it long term so they want to partner with a CLEC — or in some cases they’re looking for the incumbent to take it over. Others are looking for the revenue stream and want to run it themselves.”

The FTTH Council is yet another organization to weigh in on controversial unbundling issues. “To get to big numbers, we need the incumbents to consider this technology,” said Salter. “One of the quickest ways we see to impact that is deregulation. Don’t make the ILEC spend money to build an advanced FTTH network and have to give it up to its competition.” ‑ Joan Engebretson

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