Fibre network spend booming, may create social divisions – report

By Computing Staff
22 Apr 2012 View Comments
Fibre optic broadband

Between 2012 and 2017, fixed operators in developed economies are predicted to spend $53.5bn (£33.2bn) on fibre network rollouts, according to new research from market intelligence firm Analysys Mason.

The greatest spending is expected to occur in Western Europe, where operators will invest $25.9bn (£16bn) over the next five years.

The report, FTTx roll-out and capex in developed economies: forecasts, says that about 82 per cent of the predicted expenditure will be on fibre-to-the-home (FTTH) rather than very-high-bitrate digital subscriber lines (VDSL).

However, the report's author questioned the wisdom of concentrating solely on cutting-edge technology, saying the policy risks creating social divisions.

"Given the as yet untapped potential of copper over short distances, we wonder whether it is really sensible at this stage to take fibre right to people," said Rupert Wood, lead analyst for Analysys Mason Fixed Networks.

"Sticking rigidly to FTTH runs the risk of delivering next-generation access to a largely urban or well-to-do elite, while delaying delivery to other users and potentially losing customers. This may come to look both commercially and politically unacceptable."

Take-up of next-generation access (NGA) appears to be gaining momentum in Europe after a slow start, says the report, which concludes that five years after launch, take-up rates for telcos of 25 per cent or more in covered areas are achievable.

The report also indicates that the business case for NGA is not always best where cost is lowest. The most critical factors are more likely to be income levels and previously poor quality broadband provision.

It argues that superfast broadband has been a difficult sell in some European countries because regulation has succeeded in encouraging facilities-based competiton and, as a result, driving down ADSL prices.

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