Telco’s Face Increasing Financial Dilemma in Choosing FTTP Over Existing DSL Technologies to Meet Broadband Demand

Oyster Bay, New York - 02 Jul 2012

Copper networks continue to be a cash cow for telephone companies (Telco’s), delivering broadband over DSL to more than 367 million subscribers worldwide in 2011.  Fiber to the Home (FTTH) technologies bring ten times the bandwidth compared to advanced DSL technologies.  However, upgrades to advanced forms of DSL require a fraction of the investment of upgrades to FTTH. “Financial instability in the advanced economies of Western Europe and lack of innovative internet video services force Telco’s to look into the cost to value proposition delivered by making large scale investments into FTTH,” according to Adarsh Krishnan, senior analyst of TV & Video at ABI Research.

“Strong government initiatives to develop fiber infrastructure have in most cases been a necessary prerequisite to fund FTTH or fiber to the building (FTTB) deployments.  These incentives have been strongest in Western Europe and Asia-Pacific.”, according to Sam Rosen, practice director of TV & Video at ABI Research. Worldwide, FTTH/B service revenues reached $29.6 billion in 2011.

 

Innovative internet video services including IPTV and OTT (at HD resolutions) give Telco’s the necessary competitive edge for triple play (telephone, internet and TV) and quad play (telephone, internet, TV and mobile phone) services that have been lacking against competing cable operators. Even in the absence of fiber upgrades Telco’s can compete with triple-play services; for example, AT&T U-verse delivers IPTV over ADSL2 at 15 Mbps bandwidth. Global revenues from DSL broadband services have seen incremental growth in service revenue to reach $106 billion with a CAGR growth of 14% in the last 5 years up until 2011. Asia-Pacific continued to be a critical growth region for DSL broadband with China playing a dominant role accounting for 33% of the worldwide subscribers in 2011.

 

These findings are part of ABI Research’s Broadband CPE service, which provides an outlook on Telco’s network deployments, consumer adoption and service revenues for DSL and fiber broadband services. An analysis of key trends, current/emerging technologies, as well as drivers and inhibitors influencing consumer adoption of Telco broadband services is also presented.

 

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 40+ research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.

 

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