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Europe to the rescue?

Broadband received a boost last month with the news that the European Commission has taken an important step that will make more money available for investment in strategic infrastructure, including digital infrastructure projects like FTTH.

The Investment Plan for Europe will mobilise public and private investments of at least €315 billion over the next three years (2015-2017). In May, European legislators reached political agreement on a Regulation to establish the European Fund for Strategic Investments (EFSI), which means it should be operational by September as planned.

“When the fund becomes operational at the end of the summer, it will create a wonderful opportunity for fibre access projects to get financing for deploying FTTH,” said Edgar Aker, President of the FTTH Council Europe.

FTTH could play an important role in helping Europe meet its Digital Agenda targets, which require 30 Mbps broadband speeds for all Europe’s citizens and at least half of subscribers taking connections at 100 Mbps or faster by 2020. Progress on the second of these targets has been slow, and some reports cast doubt that it is achievable, especially with only five years remaining. The availability of new sources of investment could dramatically change the situation.

The EFSI is being created in close partnership with the European Investment Bank (EIB), which has considerable experience in managing investments in broadband and FTTH infrastructure projects. Previous EIB investments in FTTH include Iliad in France, Deutsche Telekom in Germany, Jazztel in Spain, and Reggefiber in the Netherlands.

2015 broadband equipment sales start strong but may not finish that way

First quarter sales of DSL, PON, and point-to-point Ethernet fiber to the home (FTTH) broadband aggregation equipment grew by 14% year-over-year, according to the latest figures from IHS (NYSE: IHS). However, the market research firm believes the space will end 2015 down versus 2014.

Sales of broadband gear totaled $2.1 billion in the first three months of 2015, according to the most recent IHS Infonetics "PON, FTTH, and DSL Aggregation Equipment" report. While that number is significantly better than the total for 1Q14, it represented a 5% decline versus 4Q14.

"Broadband aggregation equipment spending went above $2 billion in each of the last three quarters, so there was bound to be some slowdown to start the year,&" said Jeff Heynen, research director for broadband access at IHS.

A relatively mild slowdown versus the $8.2 billion spent during 2014 likely will continue throughout the year, he added. &"Though we look for spending to drop to around $7.8 billion for the full-year 2015, that total is well above historical years and shows operators' continued commitment to providing premium fixed broadband services around the world," Heynen said.

GPON and VDSL proved particularly hot in the first quarter of 2015. PON sales in general grew 18% year-on-year, with North America a particularly strong market for GPON. IHS says that telco operators and competitive carriers there are warming to gigabit FTTH deployments as a means of staying ahead of cable operator competition, whose DOCSIS-based hybrid fiber/coax networks currently can't support similar equivalent symmetrical speeds. A growing number of municipalities also have launched gigabit broadband projects based on FTTH.

While upcoming DOCSIS 3.1 technology will enable cable MSOs to offer 1 Gbps downstream, the technology's limitations will make symmetrical 1-Gbps services a challenge. Some cable operators, most notably Comcast, have turned to FTTH in response (see, for example, "Comcast one ups Google Fiber, AT&T with 2-Gbps broadband in Atlanta").

Meanwhile, IHS reports that Latin America is becoming a more vibrant market for broadband equipment, thanks to the lifting of regulatory restrictions as well as a slowing of operator consolidation.

The quarterly IHS Infonetics "PON, FTTH, and DSL Aggregation Equipment" report covers BPON, EPON, GPON, FTTH, FTTB, PON, and DSL aggregation equipment and subscribers. The research service provides worldwide and regional market size, vendor market share, forecasts through 2019, analysis and trends.

CNMC Reports Growth in Spanish FTTH Market

Fiber to the home broadband connections in Spain has shown a steady growth for the past many years and now the telecom regulator CNMC reports that the number of FTTH connections in the country grew to 1.81 million at the end of February 2015. There is a clear trend among subscribers to move towards fiber based broadband services.

Fiber to the home and Hybrid Fiber Co-axial connections continue to grow while there is a decline in the number of DSL subscribers. This indicates that more number of DSL subscribers are shifting to FTTH connection and new subscribers directly opt for fiber based broadband plans instead of choosing DSL connections. Service providers in Spain could add 127,735 FTTH connections in February to take it over the 1.8 million mark, while HFC lines grew by 23,820.

CNMC report also indicates that by the end of February 2015, Spain had 12.79 million broadband connections. There is an addition of 722,000 subscribers compared to the previous year suggesting a growth of approximately 5.64 percent.

Acquisition of Ono had helped Vodafone to contain or compensate the outward flow of subscribers from Vodafone's service schemes. Vodafone alone claims about 8.8% of the market in Spain. CNMC reports that, Vodafone was the one among fixed broadband operators in Spain to lose customers in February. Service provider Ono has reported growth in its subscriber base. Ono was acquired by Vodafone in 2014. The combined company claimed a market share of 21.9% at end of February 2015, that places them in the second place in ranking.

Telefonica is the largest service provider in terms of number of subscribers and the fiber optic networks it owns. Telefonica had a 45.2% market share in Spain. Orange with around 15.9 percent market share is the third largest service provider in Spain. Orange recorded highest growth in Spain in February 2015 with the addition of 19,000 subscribers to its service.

Orange is moving towards to acquire Jazztel. CNMC had cleared the proposal for take over. Orange had proposed a 3.4 billion euro plan to take over relatively smaller telecom service provider, Jazztel. The acquisition will make the combined company stronger to offer broadband services at competitive price in Spain. Orange and Jazztel together would have had a 27.9% share of the broadband market at the end of February. The acquisition will place them in second place replacing Vodafone-Ono team.

CNMC also reports that the Spanish mobile market as a whole has been losing customers since September 2014. The decline is reported from the prepaid market while postpaid customers continue to inch up, accounting for 36.31 million of the total 50.47 million connections at the end of February. Interestingly, many operators including Vodafone, Telefonica's Movistar, and Yoigo lost customers in February, while Orange could add fewer than 3,000 customers. Virtual operators, including Vodafone's Ono, together added almost 99,000 subscribers.

Broadband prices continue to fall

The average cost per megabit of both residential and business broadband continues to decline worldwide with services delivered over cable and fibre networks remaining less expensive per megabit than those delivered using copper/DSL, Point Topic claims.

Point Topic has compiled the latest edition of its global tariff analysis exploring the state of fixed broadband services worldwide, looking at prices and speeds from thousands of services across multiple countries in Q1 2015.

Their analysis confirms that the average cost per megabit of residential and business broadband continues to fall for services delivered over cable and fibre networks.

They also find DSL services provided over copper networks continue to be more expensive per megabit, particularly in the absence of competition from other providers. “As is the case with residential services, the average cost per megabit prices for fibre and cable are more closely matched at comfortably under US$5 while the average price for copper broadband services is much higher at US$18.25 in Q1 2015,” the researchers claim. Across the world on a cost per megabit basis, “Services delivered over copper networks continue to be by far the most expensive and are now more than ten times pricier than those delivered over cable or fibre networks,” they said.

Western Europe enjoys the lowest average price for residential broadband services, Point Topic confirms, while Albania and Iran offer the lowest price entry level residential broadband services.

Western Europe offers the best combination of speed and price when it comes to business broadband services, the analysts point out. Asia Pacific region services are marginally faster, but are also the most expensive. “Business broadband services in the MEA and South and East Asia regions tend to offer the worst combinations of speed and price,” said analysts.

Overall the cost of broadband connectivity seems to be in decline. Point Topic assesses the global average cost per megabit of business broadband services to be $3.77 in Q1 2015, down from $4.10 in the previous quarter. Residential broadband prices declined 1.6 percent to $1.23 per megabit.

PointTopic’s research is generally good reading, but the reality of digital infrastructure deployment remains challenging. The difference between those who have and those who lack broadband access means that even in the US 17 percent (55 million) Americans lack access to fixed broadband, according to the FCC, and this pattern of lack of available service is replicated worldwide. Non-fixed line alternatives such as mobile or satellite broadband provision may help mitigate this digital divide.

PointTopic compares entry level and average tariffs from the pool of 3,086 residential broadband services from operators across 86 countries in Q1 2015.

Each 10 percent increase in broadband penetration generates a GDP increase of 1 per cent, according to the ITU.

Wave funds fiber network expansion

West Coast gigabit fiber-optic network and broadband services company Wave says it has raised $130 million to build its fiber network footprint. The company raised the funds via a corporate bond sale led by Deutsche Bank and supported by Wells Fargo, Sun Trust, and RBC Daniels. Wave also announced a new executive team to spend the money.

The company has already decided on the outlines of its expansion. The plans include:

  • Expansion into areas surrounding Seattle, Portland, and San Francisco with the addition of more than 1,500 route miles of fiber cable this year
  • Completing redundant fiber rings that serve such California markets as Concord, San Jose, Sacramento, and San Francisco with virtual cross-connect services to multiple Bay Area data centers
  • Extending its residential gigabit Internet service to more than 10,000 residents this year in Seattle, with expansion to San Francisco and other markets starting this year
  • Introducing new business services such as hosted PBX and co-location facilities to its existing IP transport and virtual cross-connect products
  • Beefing up the company's construction organization to support network expansion in California, Oregon, and Washington markets.

Wave says it has hundreds of fiber build projects either planned, permitted, or under construction.

Meanwhile, company founder and CEO Steve Weed has named longtime Wave executive Steve Friedman as the new executive vice president of fiber design and construction. Weed also has tapped Harold Zeitz to become president and COO.

"We are thrilled to accelerate our fiber expansion with this additional funding and announce the new roles for Steve Friedman and Harold Zeitz. This furthers our commitment to provide business clients with carrier-class service, and residential customers with the fastest internet speeds at a great price, all backed by exceptional local customer service," said Weed. "Wave is uniquely positioned to deliver these services as a local, profitable, and fast-growing company with more than a decade history, 1,000+ employees and annual revenue in excess of $350 million."

China to invest $177.6b on broadband by 2017

China will invest more than 1.1 trillion yuan ($177.64 billion) between now and 2017 to enhance the nation's fixed broadband and 4G networks, according to the State Council.

The nation plans to invest 430 billion this year to improve network infrastructure. An additional 70 billion yuan will be spent in 2016 and 2017.

The State Council has instructed the nation's three state-owned operators to improve the speed of fixed and mobile broadband services while reducing tariffs.

According to the State Council, by the end of 2015 more than 80% of urban residents are expected to be able to access 100Mbps broadband services. Operators are also expected to deploy a combined 1.3 million 4G base stations for rural areas.

The Council will also continue to process of opening up the nation's fixed broadband market to private competition. This process commenced in November when the Ministry of Industry and Information Technology launched public consultations into the plan.China will invest more than 1.1 trillion yuan ($177.64 billion) between now and 2017 to enhance the nation's fixed broadband and 4G networks, according to the State Council.

The nation plans to invest 430 billion this year to improve network infrastructure. An additional 70 billion yuan will be spent in 2016 and 2017.

The State Council has instructed the nation's three state-owned operators to improve the speed of fixed and mobile broadband services while reducing tariffs.

According to the State Council, by the end of 2015 more than 80% of urban residents are expected to be able to access 100Mbps broadband services. Operators are also expected to deploy a combined 1.3 million 4G base stations for rural areas.

The Council will also continue to process of opening up the nation's fixed broadband market to private competition. This process commenced in November when the Ministry of Industry and Information Technology launched public consultations into the plan.


Currently private competition has been allowed in 16 cities. But by 2017, the market will be open nationwide.


Currently private competition has been allowed in 16 cities. But by 2017, the market will be open nationwide.

PT Telkom to launch 4K TV service over fiber

Indonesia's PT Telkom has revealed plans to add a 4K TV component to its Indihome fiber-based triple-play service.

PriMetrica quotes Telkom director of consumer services Dian Rachmawan as stating that the 4K TV service will be introduced shortly.

The company is working with set top box suppliers and content providers to develop the service.

Telkom plans to integrate the services with its existing IPTV platform, as well as with new hybrid platforms based on Android.

Telkom is currently testing 4K TV over the live Indihome network ahead of the planned commercial launch. To be effective, 4K TV streaming requires a minimum 50Mbps connection.

At present Telkom offers its Indihome service in 160 cities across Indonesia, and the operator is expanding coverage in these cities. The company aims to have 3 million fiber customers by the end of the year.

CenturyLink adds PON-based 1-Gbps business services in five states

CenturyLink, Inc. (NYSE: CTL) says it now offers its PON-based symmetrical 1-Gbps small and medium business (SMB) services in parts of Iowa, Idaho, North Carolina, Ohio, and Wisconsin. The additions bring to 17 the number of states where the operator offers such services.

The new roll out will make the 1-Gbps fiber-optic network services available to 115,000 additional U.S. business locations in the five states. CenturyLink says it also will expand its existing fiber-based SMB footprint in Arizona, Colorado, Florida, Minnesota, Nevada, New Mexico, Oregon, Utah, and Washington.

CenturyLink also provides 1-Gbps SMB services in parts of Missouri, Nebraska, and South Dakota. In all, the new deployments will bring approximately 490,000 SMB locations access to the services, which include IP networking, VoIP, and cloud capabilities.

According to Shirish Lal, CenturyLink's chief marketing officer, the PON infrastructure enables the operator to offer services based on either MPLS or IP. He reports interest in both options, with MPLS perhaps more popular.

The ability to offer symmetrical 1-Gbps also is a key feature the PON enables, Lal says. He says CenturyLink sees increasing bandwidth demands from its SMB customers because of interest in disaster recovery, off-site storage backup, cloud, and related services. The company also is seeing success for its managed LAN offerings that leverage the network as well.

The 1-Gbps pipelines also should enable CenturyLink to offer an array of virtualized services via network functions virtualization in the future, Lal says.

Where CenturyLink also offers 1-Gbps residential fiber to the home (FTTH) services, the operator has converged residential and SMB service provision over the same infrastructure, Lal adds. Those cities include Columbia and Jefferson City, MO; Denver; Las Vegas; Minneapolis-St. Paul; Omaha; Orlando; Portland; Salt Lake City; and Seattle.

Calix says it has provided GPON technology to CenturyLink for at least some of these deployments.

Products compliant to Broadband Forum standards predicted to grow by 32% in the next two years

According to a new forecast* by Ovum, the number of residential gateways, TV set-top boxes and other home broadband equipment in use that support the Broadband Forum’s TR-069 (CPE WAN Management Protocol) standard will reach 356 million in 2016, as a growing number of service providers embrace the management protocol to support burgeoning demand for ultrafast-broadband and smart-home services.

The forecast was commissioned by the Broadband Forum standards body responsible for TR-069 as part of a wide-reaching project that saw Ovum survey over 250 global industry executives, including over 100 in senior roles at broadband service providers, about their use of TR-069 and plans for the smart home.

TR-069 is a technical specification that defines a common communication protocol that enables broadband service providers to remotely configure devices, enable end-to-end delivery of new services, and then cost-effectively manage and support them.

Rob Gallagher, Ovum research director, commented: "Our survey shows that service providers are already deriving significant value from TR-069, with over six out of ten reporting benefits such as simplified service delivery, faster fault resolution and lower installation costs."

"Adoption of TR-069 will accelerate as a growing number of DSL, fiber and cable service providers alike bake technology into their ultrafast-broadband, multiplay bundling and smart-home strategies. With the number of connected devices and applications set to grow, they see a clear need to better visualise, support and control activity on the home network, with eight out of ten stating that TR-069 will play a significant role in their smart-home strategies."

Robin Mersh, CEO of the Broadband Forum states, "the Forum is delighted to see the continuing growth and expanded use of the TR-069 CPE WAN Management Protocol in broadband operators' networks and the exciting opportunities that exist as the needs of the connected home move from managing devices to managing services. The survey brings this vibrant market sector to the attention of the whole industry and shows how the complex technical work of TR-069 is making a real practical difference."

Ovum's estimate of 269 million TR-069-enabled devices by end-2014 marks an increase on a projection of 250 million made by the global research and advisory firm as part of a 2012 study commissioned by the Broadband Forum. Ovum revised its estimates upwards largely to reflect moves by a growing number of service providers to take greater control over the residential gateway as they accelerate take-up of ultrafast-broadband and multiplay bundles.

Residential gateways will account for the majority of TR-069-enabled CPE, rising from just under 200 million at the end of 2014 to 255 million at the end of 2016. During this period, the percentage of fixed-broadband connections equipped with a TR-069-enabled residential gateway will increase from 26% to 30%. TV set-top boxes will be the second-largest category, rising from 46 million at the end of 2014 to 69 million at the end of 2016. More findings from the survey can be found within the "Efficient and Automated Smart Home Rollout"** whitepaper, which was sponsored by Axiros.

Bringing fiber to Africa

Across Africa, the deployment of high speed networks is accelerating, with the continent part-way through a connectivity transformation. The landing of submarine cables around the African coast has provided high capacity links to the Internet, but networks are needed to connect inland areas to these hubs. Additionally, a growing percentage of the population relies on mobile phones, not just to make calls but also to bank, shop and access the Internet, leading to a requirement for cost-effective data backhaul.

The market need

Both high speed broadband and backhaul networks for mobile operators increasingly rely on fiber. Previous deployments of copper-based networks had cost advantages, but in many places problems with bad terminations and cable theft have led to outages, meaning that fiber is becoming the solution of choice.

Across Africa fiber is now the preferred carrier of backhaul services with SDH, DWDM and MPLS deployed for protected services and FTTx, FWA, GPON and microwave radio being the preferred methods for last mile deployments.