Head of Research, Telecoms Business Unit, IDATE
Ultra-fast broadband revenues will grow by 95% over the 5 next years to reach 182 billion EUR in 2017
We have released the latest issue of our World FTTx database, which is part of our ongoing service covering the ultra-fast broadband market. It provides key data on this market across the globe, covering more than 70 countries and 150 key players, and providing forecasts up to 2017.
Valérie Chaillou, FTTx lead analyst at IDATE, notes “growth perspectives remains still high when superfast technologies (For definition of superfast platforms we have considered here 3 main architectures: FTTH/B, FTTN and FTTLA) represent 22% of broadband access subscriptions at mid-2013, and we expect ultra-fast broadband revenues will grow by 95% over the 5 next years to reach 182 billion EUR in 2017”
Source: IDATE, December 2013
• Eastern Europe will see its take up rate increase from 28% to 49% in 5 years, much higher than in Western Europe during all the period, from 21% at end 2012 to 32% at end 2017.
• FTTH/B is the leading ultra-fast broadband solution, far from FTTLA then VDSL : FTTH/B represents 66% of FTTx subscriptions at mid 2013, compared to 22% for FTTLA and 12% for FTTN+VDSL
• But the regional breakdown is very heterogeneous
- FTTH/B is clearly the technology of choice in APAC whereas
- FTTLA is leading the ultra-fast broadband market in Western Europe and North America.
- VDSL is a technology of choice for several European incumbents.
- Latin America and Middle East countries are at the very beginning of their NGA rollouts: they will participate to the global growth of superfast broadband more and more in the coming years.
• There are still questions from large players regarding the opportunity to deploy FTTH/B or VDSL, mainly in Europe.
- Several parameters are to be taken into account among which, of course, the required investment. Nevertheless FTTH/B rollouts did progress in certain European countries which are encouraging at a time when EU Telcos are seeing their margins shrinking.
- Some players are betting on the future capacities of copperbased networks.
Source: IDATE, December 2013
FTTH Operators ranking: 6 Asian and 4 American telcos make up the world’s Top 10
Only one player involved in large FTTN+VDSL deployment among them (AT&T), then two cablecos
upgrading their infrastructures to FTTLA (Comcast and TWC). 7 operators among this top 10 have choosen the FTTH/B technology.
More data on our FTTx Whitepaper Updated with 2014 figures
More information on Worldwide panorama of FTTx rollout Status report & database
Head of Research, Telecoms Business Unit, IDATE
Inventory of the British NGA market
The British NGA market is quite complex. On the one hand, two national players, BT and Virgin Media (now acquired by Liberty Global), have deployed their FTTN networks and already reach 20 million households who can access to at least 20-30 Mbps. On the other hand, several local players have decided to get involved in FTTH (more often called "FTTP" in the UK) as they consider that this is the infrastructure of the future and that they cannot wait for national players to get involved.
Then, the government is also involved through the BDUK programme (mainly for FTTx in rural areas) but only BT and Fujitsu can apply to tenders launched by local authorities and then indirectly benefit from public funds. However, at mid-2012, Fujitsu withdrew itself from two tenders (Cumbria and Wales), considering that it would be too difficult to attract RSPs to provide services over the infrastructure in those areas.
BDUK is also involved through the very recent launch of the "super-connected cities" project, aiming at ensuring the coverage of areas in large cities that would not be concerned by private investments.
Whatever the project, FTTH/B is not, and will not be, the main architecture deployed in the UK. This has been much more the case since BT announced its "FTTP on demand" pilots: the incumbent does not plan to roll out FTTP any more unless the demand is clear from end users.
• 199,000 FTTH/B homes passed and 17,000 FTTH/B subscribers at end-2012
• Very low take-up rate: 8.5%
• Several local players are involved in FTTH/B rollouts but they generally cover restricted territories; some interesting business models are emerging such as the B4RN and Fibre GarDen ones, involving people from the communities.
• FTTN+VDSL from BT and FTTLA + DOCSIS 3.0 from Virgin Media are the leading architectures regarding superfast broadband in the UK:
20,000,000 FTTN2 homes passed,
3,341,000 FTTN subscribers.
• This will not change in the coming months if we consider the current strategy of BT
regarding FTTH roll outs ("FTTP on demand").
Head of the Telecoms Business Unit at IDATE
Measuring costs for each EU-27 member state to reach the Digital Agenda in Europe
In May 2010, the European Commission adopted its Digital Agenda policy programme. It was one of the first flagship initiatives of the EU 2020 strategy. It sets ambitious targets to provide all European households with ubiquitous coverage of 30 Mbps as a minimum and half of them with a subscription of 100 Mbps by 2020. IDATE has published recently a report providing different possible cost scenarios – with a breakdown by technology and by population density (urban, peri-urban, rural).
Today, some voices are raising concerns that the goals of the Digital Agenda (DA) will not be reached in many Member States as the necessary expenditure is beyond reach, especially in the current European economic situation. This is why this report focuses in particular on the cost of the Digital Agenda in reaching the ambitious goal of coverage of 30 Mbps and 100 Mbps, and further tries to clarify, per country, what it will be. It puts forward a theoretical model with the distinction of various scenarios involving distinct technologies, namely fixed and wireless.
"In several European countries, the rollout of FTTH networks has started and the European Union disposes already of a 40% NGA net coverage amongst all its member states. Indeed, copper local loop will ultimately be replaced by fibre, it being the medium that can guarantee an almost infinite bandwidth capacity for the future. Nevertheless, good quality copper, especially in Western Europe, and the current economic situation, could lead some telcos to consider other alternative scenarios involving VDSL, LTE or even satellite in Ka band", says Roland Montagne, Director of the Telecom Business Unit at IDATE. He adds: "The adoption of a FTTH-oriented scenario by telcos will not only depend on the amount of capex necessary but also on a viable business model. On this, telcos should be innovative not only with the services they propose but also on their pricing approach (tiered pricing) and their strategy regarding smart access."
Deployment costs by scenario
- Four scenarios in different constellations have been modelled, including a full FTTH/B coverage scenario. Depending on the mix of technologies deployed, these scenarios will cost between 51 billion EUR and 229 billion EUR.
- These amounts, whilst certainly substantial, are within the expected range and therefore come as a confirmation of the ambitious nature of the broadband objectives of the DAE.
NOTE: Scenario names are chosen to reflect main technological characteristics, but do not express a preference for any given
technology to reach the broadband objectives of the Digital Agenda.
90% FTTH/B = 90% FTTH/B only + 10% LTE
Base case = FTTH/B+FTTLA+VDSL2+LTE
Vectoring = FTTH/B+FTTLA+VDSL Vectoring+VDSL2+LTE)
Wireless = LTE+FTTH/B
NGA Costs model
In order to build our theoretical model of the costs of reaching the DA goals, IDATE started by drawing up several assumptions about ‘overlapping’ in each country with the aim of establishing the ‘net’ number of FTTx homes passed, and thus the effective level of NGA coverage. Consolidating this in the EU27 gives a net NGA coverage rate of 41% of European households in late-2011. Among the four fixed NGA architectures considered (FTTH/B, FTTLA+DOCSIS 3.0, FTTN+VDSL and FTTx/LAN), regarding our estimates at that time, FTTH/B accounted for 22%, FTTN+VDSL for 25% and FTTLA+DOCSIS3.0 for 50% of the European NGA coverage.
Using these coverage estimates as a baseline, IDATE modelled the investment required for each of the 27 Member States to reach the broadband objectives of the Commission's DA. We also took into account, nevertheless, for each Member State, the national broadband or ultra-fast broadband plans already launched, with their associated objectives of coverage up to 2020.
We then considered no duplication of infrastructure in our cost model. Indeed, the model's output shows the minimum cost of reaching the DA targets by rolling out one single network per coverage area1.
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