Fiber at any price

10 Mar 2006

The need for IPTV is driving demand for FTTx, but as ever, cost remains a major issue, especially the opex. Managing those costs is partly a matter of selecting the right architecture and technology for the job, but it also means devising the right business model to cover the opex bill

With the ongoing quest for triple-play services driving higher bandwidth requirements in the local access loop, industry analysts are becoming increasingly bullish on the prospects of fiber access deployments. Rollouts have been ramping up both in markets that have been sluggish on the fiber front, and markets that have been at its vanguard.

Asia, for example, sports some of the most aggressive fiber buildouts in the world, particularly in Japan, Korea, China, Hong Kong and Australia, according to a January report from analyst firm In-Stat. Meanwhile, Europe - which has been slow to embrace FTTx - is now seen as the newest fiber hotbed because demand for video and sophisticated services is growing quickly, says Michael Arden, principal analyst of broadband and multimedia research at ABI Research.

'As demand for TV technology increases, so must the capacity and capabilities of the access technology,' Arden says. 'Operators and equipment vendors are increasingly interested in this market because they see IPTV starting to gain more and more traction.'

Indeed, support for IPTV is the chief driver in many markets. ADSL can easily handle the 4.5-Mbps bandwidth necessary to send a standard-definition MPEG-2 video stream to a set-top box (under the right line conditions), but IPTV in the future will be multiple high-definition streams on an access line that will also have to support heavy multimedia downloads and uploads, which will boost bandwidth requirements upwards into the symmetrical 40-Mbps range.

The catch is that fiber does not come cheap. The cost of the equipment itself isn't a problem so much as the cost of running the network, particularly in the backhaul, where bandwidth costs grow as traffic increases.

Interestingly, how big a barrier this is varies from market to market and carrier to carrier. Some carriers find FTTx very cost-effective to deploy, while others find it tremendously expensive. The regulatory environment is a factor in some cases, but it's also a matter of choosing the right technology and the right FTTx architecture for the job, as well as the right business model to cover the opex costs.

Hitting close to home

The basic choices operators face when shopping for an FTTx solution involve deciding how close they want to bring fiber to the user, and how much bandwidth they want to dedicate to each user.

For example, operators can roll out fiber directly to the home (FTTH), to the neighborhood/node (FTTN) or the curb (FTTC). Each has their own pros and cons, says Stefan Neidlinger, Siemens VP of solutions management for PON systems. For example, he says, FTTN shortens the loop lengths enough to allow DSL to connect the end-user at optimum speeds, which translates into cost savings by reusing existing infrastructure.

'FTTN allows you to reuse existing copper in the first mile, and share infrastructure such as ports in the second mile,' Neidlinger says.

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