Recent Fiber to the home markets showed a strong dynamism in 2012

Valérie CHAILLOU

Director of Studies, Telecoms Business Unit, IDATE

Inventory of FTTH/B in Europe

Europe (EU-35)  reported a solid 15% increase in the number of FTTH/B subscribers during second half 2012. FTTH/B coverage continues to progress fast in Europe with a growth of 12% in the period. There were nearly 7.3 million FTTH/B subscribers in the EU-35 at mid-2012, and 33.8 million homes passed.

During 2012, several countries showed a real dynamism both in terms of coverage and take up rates. Turkey is leading the Top 5 dynamic countries in terms of percentage of new subscribers in the total FTTH/B subscribers' basis, along with Ukraine, Spain, Bulgaria and Russia. The positioning of Spain -only Western European country present in the list- should be noted as the country has entered the European ranking only a few months ago and is facing an important economic downturn. The success of FTTH/B is therefore reinforced in such a tricky context.

Elsewhere in Europe, pioneering Scandinavian countries, sometimes already considered as mature, are still leading the European market. In Denmark, FTTH/B market growth is now higher than the mobile market growth. In Finland, FTTH/B connections are more and more considered as a utility and therefore often included in the apartment monthly rental. In Sweden, new services are benefiting from a large FTTH/B coverage and an important take up rate: customers used to subscribe to a FTTH/B connection to be able to reach e-governance services provided by national entities and they are now turning to other services such as Video On Demand… finally, FTTH/B is a driver for video entertainment!

On the other hand, Italy, which was also a pioneer in FTTH/B rollouts, is beginning to lag behind. Some projects involving several players have been announced but none of them has entered into operation. The strategy unveiled by the incumbent doesn't put a strong accent on FTTH/B. The increase in terms of subscribers during 2012 is one of the lowest in Europe (10%), but the potential is still large (12.7% take up rate at end 2012, far from the EU35 average of 21.6%).
In terms of players involved in FTTH/B projects, there was no upheaval in 2012. Alternative carriers are still leading the way, representing half of the total homes passed in EU35 at end 2012 (nearly 71% considering EU39).

The number of local authorities launching FTTH/B rollout projects on their territory is increasing a little bit more rapidly than other kind of players but they still represent only some 11.6% of homes passed in EU35. However, we have noted some interesting projects in Europe held by those players, such as in the UK where rural cooperatives have succeeded in motivating citizens to be financially and/or "physically" involved in rollouts (e.g. the B4RN / Broadband For the Rural North project).

Then, of course, incumbents are main players in all European countries now; they represent 38.4% of HP in EU35 at end 2012. The quite recent involvement of Turk Telekom in Turkey has largely participated in the dynamism of the country which was clearly dominated by the competitor Turckell/Superonline until then. The competition between those telcos will probably enhance the take up rate which is still lower than the European average at end 2012 (18.7% vs 25.8%).

In the UK, the situation is totally different. The incumbent BT has decided to deploy FTTC on the national scale. FTTH (mostly referred as FTTP in the UK) will now only be deployed "on demand". BT has been really aggressive in the past year and has now reached the same level of coverage than its main competitor, the cableco VirginMedia (13 million homes passed with FTTC+VDSL). A part from local projects, we do not see a very bright future for FTTH/B in the country.

Number of FTTH/B subscribers per country in Europe
(countries with more than 200 K subscribers)
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Source: IDATE for FTTH Council Europe

Number of FTTH/B homes passed per country in Europe   
(countries with more than a million homes passed)

Source: IDATE for FTTH Council Europe

A few months ago, we didn't note important changes in the leading countries. Russia and Ukraine are the main markets, both in terms of subscribers and homes passed. This is mostly due to the demographic context in those countries, as well as the rhythm for rollout. In Russia, several players are present on the national scale (Beeline, MTS, ERTelecom, Rostelecom), enhancing competition and driving tariffs down. Moreover, end users are migrating more rapidly because previous access solutions (copper networks) were not efficient enough.

Then Sweden is still a leading FTTH/B market. E-governance is a real success there and citizens are now very confident in their FTTH/B connections to now pay for new kind of services such as Video on Demand. Other TV services (linear TV) are most of the time included in the apartment monthly rental but customers are now ready to subscribe to new kind of services that they can reach whenever they want. In Sweden, the take up rate reaches 48.4% at end 2012, largely higher than European average.

Regarding the technology deployed, Ethernet is still players’ first choice across the EU-39, and represented 78% of all FTTH/B rollouts at end 2012.

As concerns network architecture, the gap between FTTH and FTTB has increased during last semester 2012 and now FTTB architecture represents 70% of rollouts at end 2012 (compared to 62% six months earlier). Players are favouring an FTTB configuration as it allows them to avoid the issues that come with installing fibre on private property, and especially MDUs – i.e. having to negotiate with each property owner.

Valerie CHAILLOU    
Director of Studies, Telecoms Business Unit, IDATE
v.chaillou@idate.org