Britain lies in a lowly 20^th 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 26^th 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.

In a weird echo from Friday’s post, Point-Topic has confirmed that there are now half a billion fixed broadband lines worldwide. Not that this is any surprise – this landmark has been expected for some time now, and in any case, the exact figure that Point-Topic has from the end of June 2010 is 498 million. It extrapolates that with 1 million new lines a week, this point will have been hit in the third week of July.

What is noteworthy though is the speed that these lines have been added. At the end of the last century, there were only 1.3 million broadband lines around. Most of these were in North America and much of the rest of the world had to make do with modems and ISDN if they were lucky. Remind yourselves of the joys of modem technology with this little trip down memory lane!

Just over 10 years later, the total figure is now north of 500 million. The market spark was really provided by the commercialisation of DSL technology which helped operators use their existing infrastructure – even if many appeared reluctant at the time! China is now the biggest market for broadband and fiber is also starting to make some serious inroads. In fact here at Futurity Towers we have recently had fibre installed and are pretty impressed so far.

So to go back to Friday’s post. To get the next half-a-billion subscribers, we are really going to see prices reduced in emerging markets, so that they can also enjoy the undoubted benefits that broadband brings.

Although shocking, it’s not surprising that a recent study from Ovum has shown that broadband costs in emerging markets remain punishingly high. For example in Nigeria broadband costs were around $2,000 per year, compared to an average per-capita GDP rate of just over $1,000. South Africa had the highest broadband costs of Ovum’s sample, with the annual costs of some services clocking in at a staggering $5,000 per year – and its average GDP per capita is under $6000. According to Ovum – this is three times as high as the rest of the world. Compare this to the UK, where my home broadband costs less than $400 per year.

This cost disparity needs to be addressed, and hopefully will be a topic covered in this week’s Broadband Commission for Digital Development meeting in New York. They are producing a report, which will be available shortly – I’ll report back when I’ve read it.

In the mainstream media, there is still far too much rubbish, lies and misinformation about technology. Too many pundits who fail to question what they are being told.

There was a classic example on Radio 4′s Today Programme  - a discussion on why 3G service in the UK is so disappointing and patchy. While Peter Cochrane, one time CTO of BT, did make the occassional relevant point, such as why O2 has a poor network***, he also blamed poor 3G network coverage on clustering. Apparently kids sit around coffee shops, simultaneously watching the same video on their individual mobiles. This, apparently, is the reason for our collectively poor service experience. I’ll leave you to make your own conclusions about that. Check out the interview here at 7:13 on Friday 15 Jan: http://news.bbc.co.uk/today/hi/listen_again/default.stm

But it got me thinking about all the recieved wisdom about technology, all the rubbish masquerading as fact.

One of those is country league tables for broadband speeds. It may be interesting to know where the UK is – 26th apparently – but does this mean that we are really way down the list of broadband competitiveness, or indeed if broadband competitiveness has any baring on the digital economy? Does the relative position of where we a country is in the league table mean that somehow that its internet users are less evolved, that with 5mbps they do not operate on the same level of conciousness of citizens graced by 50mbps? Or does it mean that those with higher speed, more reliable connections simply are recipients of even more mass media channelled downwards through these fat pipes.

I love my fast broadband, I genuinely like the experience of BT Vision’s IPTV, and I regularly use BBC iPlayer and download games to my PS3, I use Spotify and spend huge sums on TV and music on iTunes. But will i be disappointed if in two or three years this isn’t a 50mbps or 1gbps connection?

My current 16mbps pipe is a conduit to mass media. Of course, that’s not so say that my internet experience is limited to this – quite the contrary, much of my working life is spent researching online, and I buy online in preference to visiting stores – but this does not need require a constant race for increased broadband access speeds. The impact of high speeds means that much of my Internet experience is now a sit-back rather than sit-forward experience. I watch, listen and play much more now than read and browse. Any rich media I want, it’s on demand. And i can’t help thinking its a little addictive, and that i’m spending less time discovering and learning. So tell me now – what does broadband competiveness means to the digital economy? It means more supine people, able to consume media in more ways, more often. Hardly enlightened! So why do writers, consultants and politicians continue to bang on about the need for broadband competitiveness without thinking about what it means?

Footnote:

***O2′s lower GSM spectrum band – 900Mhz – means it had quite large cell sizes originally. The high spectrum of 3G – 2100Mhz – needs smaller cells sizes, and therefore more of them. O2 is still in the process of trying to acquire additional cell sites rather than using just the GSM sites it already has, a process known as infill. This may have been fine if it wasnt for the boom in mobile apps and content created by the iPhone, which has taken O2 by surprise. The shear volume of data traffic generated by apps and content has highlighted another weak point – backhaul. Even when there is sufficient wireless capacity, many cell sites do not have sufficient capacity to bring the traffic back to the core network. That’s why as an iPhone user you are offered free access to BT Openzones – its cheaper for O2 in the short term to pay BT to backhual its apps and content over WiFi. More backhaul is being provisioning but at the moment, it can’t keep pace with demand.