Phone operators cannot build new fibre-based networks to enter the video market overnight. Both government and privately owned telecom operators have limited resources for such massive upgrades – capital, qualified staff, etc. But the bigger issue is whether future revenues can justify the cost. Despite the resource limitations, more and more carriers are deploying FTTx. Costs are decreasing and subscribers are showing increased willing¬ness to change service providers or to pay more for an upgraded package of services. A key factor in the new revenues from broadband services has been the “triple play” package – a combined menu of voice, data, and video services. More recently, some operators are offering “quadruple-play,” which also includes mobile services.
The business case has improved to the point that many carriers believe that FTTH is clearly more cost-effective than fibre-fed (FTTN) or all copper loops in greenfield construction – areas of new housing developments. The situation is different in “brownfields” where houses, roads and infra¬structure are already built and where customers are already served by other telecom networks. In such cases, the carriers have to evaluating whether or not the anticipated service revenues will justify the costs of upgrading with fibre.
The decision to upgrade copper telecom local loops to fibre in older brownfield situations depends on various factors, including the copper plant’s age and performance, whether it is fully depreciated, network distances and density, the community’s requirement for broadband services, and competitive factors that can affect market share and the revenue from broadband services. These competitive factors may also include the regulatory requirements for sharing local telecom facilities. Because these factors differ not only between countries but also among cities or serving areas within a country, network operators around the world are pursuing different strategies