Saturday, 24 June 2017

Opex reduction justifies fibre investment in US, but Europe still not sure

By Mary Lennighan, Total Telecom, in Singapore
Wednesday 19 June 13

FTTH Council claims rolling out fibre reduces telco operating costs, but European operators still proclaim 'it's too expensive'.

"Fibre is sexy," declared Heather Gold, president of the Americas division of industry body the FTTH Council at a conference session at CommunicAsia on Tuesday that highlighted some key differences between the North American and European markets…

"Fibre is sexy," declared Heather Gold, president of the Americas division of industry body the FTTH Council at a conference session at CommunicAsia on Tuesday that highlighted some key differences between the North American and European markets.

Sexy or otherwise, in most cases operators are primarily concerned with making the economics stack up, something that Gold suggested is not a problem in North America.

The region has 9.68 million fibre-to-the-home (FTTH) connections, an increase of 20% over the past year, while opex has fallen by 20%, thereby justifying the investment, she claimed.

The take-up rate of fibre services stands at around 45% in suburban areas and at more than 50% in rural areas, she added.

But while Gold talked up the U.S.'s "gigabit communities" and the way the country is embracing Google's efforts to roll out fibre networks in certain cities, her counterpart in Europe was less upbeat.

In Europe we are still asking "will we ever need 100 Mbps?" said Hartwig Tauber, general director of the FTTH Council Europe. "It's a very old-fashioned market," he added.

While some European countries are pushing ahead with fibre, the Nordics and certain Eastern European markets, for example, the continent's major economies barely figure; the U.K. and Germany have yet to make it onto the Council's ranking of FTTH markets, having penetration of less than 1%.

One argument often heard in Europe is that "there is no financing available for fibre. It's too expensive," said Tauber. However, the Council aims to refute that claim.

The 27 markets in the EU together spend €25 billion a year on broadband networks, with spending reaching €216 billion by 2020, Tauber said. Meanwhile, the Council puts the cost of deploying FTTH at €202 billion.
 

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