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GLOBAL FTTx DEVELOPMENTS

Fibre Reaching Closer to the Home

(Provided by CRU)

Growing Number of FTTx Subscribers

The wireless revolution has been underway for about 20 years, and the world now has more than 2.2 billion mobile cellular subscribers, compared with 1.3 billion main telephone lines in service. Except for early trials and small pioneering projects, optical fibre has been used to provide residential access services for less than 10 years. But now the world has about 12 million fibre-to-the-home (FTTH) subscribers and another 62 million subscribers served by fibre-to-the-building, fibre-to-the-curb or fibre-to-the-node (FTTN) systems. These architectures are collectively referred to as FTTx. The world’s FTTx tally of 0.07 billion subscribers is therefore a small fraction – about 6% – of the 1.3 billion wireline main lines. (These figures exclude CATV operations, which may use cable modems on hybrid-fibre-coax networks.)

Fibre Reaches Deeper

The use of fibre in telecom access networks is at an early stage, and the number of new FTTx systems being installed per year is accelerating. Furthermore, fibre is reaching deeper into the subscriber loop. Recent quarters have seen announcements from some of the world’s major telecom operators saying that they have decided to take fibre all the way to the subscribers’ premises rather than to a remote terminal or node that is shared by multiple subscribers.

A Wide Range of Drivers Socioeconomic factors – how people live and work – are contributing to the demand for more bandwidth, which drives the demand for optical fibre. Many of the world’s largest telecom markets have workforces that are shifting from manufacturing to information industries. These workers need faster connections for data, images, and increasingly video, in addition to voice telephony. At home, each user typically spends one to three hours per day on the Internet – the amount varies among countries. But the amount of time per month is increasing as users spend more time on-line for functions such as news, video entertainment, social networking, games, shopping, video-conferencing, education, security, banking and others.

 

Technical Developments

In addition to such workplace and lifestyle changes, there have been technical developments affecting the mix of fibre and copper in telecom network construction. These developments include:

  • Maturing optoelectronics technology is reducing size, power requirement, and cost, while increasing reliability, bandwidth-times-distance performance, and ease-of-installation.
  • Entertainment video is shifting from analogue to digital and from broadcast to narrowcast.
  • Semiconductor integration has lowered the cost of remote electronics in telecom networks, as well as the cost of home electronics and premises networking.
  • The price of fibre has dropped by more than 75% in the past six years, whereas the copper price has increased.
  • Advances in display size and resolution, digital imaging, storage and processing are contributing to higher-bandwidth applications.

 

Double-Digit Growth in Cable Demand

From a cable-manufacturer’s perspective, one important upshot of these trends is that the worldwide market for fibre optic cable in FTTx applications exceeded US$1 billion in 2006, up from US$0.5 billion in 2003. About 80% of the FTTx cable market in 2003 was in Japan, but more rapid growth elsewhere had lowered this percentage to about 30% in 2006. Over the next five years, demand for fibre optic cable in FTTx applications will increase with a compound annual growth rate (CAGR) of about 25%, whereas the CAGR for fibre optic cable in other applications will be less than 10%.

 

(Data are taken from two recent reports by CRU / KMI: North American Markets for Fiberoptics in Broadband Access Networks and Worldwide Markets for Fiberoptics in Broadband Access Networks.)

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