Britain lies in a lowly 20th place in the European rankings of fibre to the home (FTTH), according to French analyst firm Idate and the Fibre to the Home Council Europe. And the picture is not improving – during 1H 2010, the UK ranked 26th out of 36 countries for net additions to FTTH/FTTB, one place behind Andorra. Despite BT’s widespread publicity for its 21CN broadband transformation, it seems that Britain is still in a broadband backwater.
In Europe, Russia and France are the distinct market leaders in volume terms, with Lithuania forging ahead with 21% penetration. In fact, it is the new member states (and Russia) who are making the quickest transformation, in part because of the poor standard of their copper networks which has not allowed DSL-based broadband to prosper as much as it has in Western Europe.
In absolute terms, the 36 EU countries have 3.2 million FTTH/FTTB subscribers, plus another 1.3 million in Russia, this is despite something like 25 million homes passed. (i.e the conversion rate from homes with fibre access to customers signing up is pretty feeble).
Europe does indeed appear to be in the slow lane when compared to 8.6 million FTTH subscribers in US and 43 million in Asia. However the conversion rate in Europe has improved. The homes passed increased by 6% in 1H 2010, but the subscriptions have improved by 51%.
Europe’s FTTH leader Lithuania is 5th in global ranking of penetration but pales in comparison to the 55% penetration in South Korea. Europe’s largest markets are doing very poorly in penetration terms. Italy and France are low, while Germany, UK and Spain don’t event make the Idate ranking.
BT has recently committed £2.5bn to fibre rollout, but compare this to the Australian government which is investing €30bn in its National Broadband Network. This equates to €1,428 per person.
What characterizes the deployment of FTTH in Europe so far is the number of players – Idate estimates that there are 260 FTTH projects, many of these driven by municipalities and utilities rather than incumbent telcos. Why? Incumbents have been resistant to investing heavily in national projects when faced with the threat of unbundling. But there is certainly an argument to suggest that widespread fibre deployment needs as many service providers as possible to share the load.
Why do we need more fibre in our broadband diet?
According to proponents, DSL and cable cannot deliver the speeds for game-changing broadband. Remote health care, intelligent power grid, high security network systems, personal TV, cloud apps are much more capable with pipes delivering 50mbps-1Gbps – and with this kind of bandwidth, we will be encouraged to work from home more. The FTTC Europe estimates that for 1 million fibre customers, you could save 1 million tones of CO2e emissions.
According to Ovum analyst Charlie Davies, there are demonstrable economic and cultural benefits to fibre broadband, as can be seen in this presentation: http://www.slideshare.net/ceobroadband/ftth-conference-2009-ovum-fibre-socio-economic-benefits, particularly in rural areas where it is costly to provide education, healthcare and public services.
So why can we not achieve this utilizing the copper pair in the last mile? Firstly there is the long-standing distance problem: signals degrade rapidly over copper.
Even in urban locations, copper cannot deliver the synchronous speeds necessary to facilitate a broadband economy. According to Chris Holden, president of the FTTH Council Europe, we will soon be demanding the same upload speeds as downloads. As more people want to upload HD video (such as blogs shot on Flips and Zi8s) or use HD videoconferencing from home, the need for faster upload speeds will be apparent.
This may be an issue for a minority of users at present, but it will impact the rest of us somewhere down the line. If a new consumer gadget delivers the capability to do something, but the network cannot facilitate it, we love the gadget (e.g. iphone) and vilify the network (eg. AT&T)
I’m not sure I am 100% behind this sentiment, and I believe there is life left in copper, as Nokia Siemens Networks has demonstrated by pushing VDSL to 825Mbps with phantom circuits.
But investment in broadband infrastructure – whether pure fibre or a fibre/copper/mobile mix – is high on Europe’s political agenda. The EU2020 strategy document proposes that government targets 100% of households with access to 30Mbps broadband by 2020, and 50% of which should have access to 100Mbps synchronous speeds.