Monday, 26 June 2017

BT playing 'dangerous game' in avoiding fibre - analysts

By Mary Lennighan, Total Telecom, in Amsterdam
Tuesday 16 October 12

FTTH connections rising steadily in Europe, but some operators are taking too short-term a view, FTTH Council, IDATE warn.

Growth in take-up of fibre broadband services worldwide is encouraging, with connections reaching 81.67 million as of mid-year, but some operators in key European economies are proving reluctant to take the plunge. Europe, excluding Russia and the CIS, had 5.95 million FTTH/B subscriptions at the end of June, up 16.4% over six months, according to new statistics compiled by IDATE for the FTTH Council Europe. The number of homes passed rose to 31…

Growth in take-up of fibre broadband services worldwide is encouraging, with connections reaching 81.67 million as of mid-year, but some operators in key European economies are proving reluctant to take the plunge.

Europe, excluding Russia and the CIS, had 5.95 million FTTH/B subscriptions at the end of June, up 16.4% over six months, according to new statistics compiled by IDATE for the FTTH Council Europe. The number of homes passed rose to 31.9 million, up 16%, with the average take-up rate reaching 18.6%.

The FTTH Council's ranking of European countries with fibre penetration of more than 1% included two new names from Europe this time around, with Luxembourg and Spain entering the chart at 19th and 20th positions respectively. Spain increased its FTTH/B subscribers by 44% in the first half of the year to take penetration to 1.42%, a significant number in a country with a sizeable population, while penetration in Luxembourg grew to 1.46%.

But there is still no place in the ranking for two of Europe's biggest economies: Germany and the U.K.

″In these countries FTTH is not the chosen architecture,″ said Valerie Chaillou, director of studies at IDATE.

In the U.K., for example, incumbent operator BT is focusing its efforts on rolling out fibre to the cabinet and on sweating its copper assets with technologies like vectoring.

But Roland Montagne, director of IDATE's telecoms business unit, questioned whether technologies like VDSL, that enable telcos to get higher speeds out of copper, will allow BT to compete effectively with cable company Virgin Media and broadcaster BSkyB.

″They [BT] are maybe playing a dangerous game, betting on the small capacity of coax,″ warned Montagne, explaining that the move to the DOCSIS 3.1 standard enables cable operators to provide higher bandwidth.

However, Nadia Babaali, communications director at the FTTH Council Europe, suggested that there could be a silver lining here for proponents of FTTH/B.

The ability of cable to provide faster services ″could be a driver″ for fibre in the U.K., by pushing the incumbent to move to FTTH, she said.

Indeed, that has been the case in other markets. In Spain, competition from cable operator Ono doubtless encouraged the likes of Telefonica and Orange's local unit to push ahead with fibre rollouts. And in Turkey subscriber numbers went up by 212,000 in the first half of the year thanks in no small part to Turk Telekom rolling out FTTH, spurred on by a successful service from a rival.

SuperOnline launched high-speed services two to three years ago in Turkey, at which time ″the incumbent there was not convinced,″ said Chaillou. But its success motivated Turk Telekom to follow suit, since ″it doesn't want to be far behind in that market″.

Turk Telekom passed 1 million homes in around 6 months, which is a positive sign for the industry, she added.

Finally, Babaali had a word of warning for the telcos that are currently resisting the move to FTTH. She insists that telcos know they must roll out fibre in the long run, even if they choose not to do so immediately.

″Whatever you hear, this is really the choice,″ she said. But if they do it later rather than sooner, ″what is the cost of that?″ she asked. ″It will not be [good] news for those who choose the short-term solution,″ she cautioned.

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