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Study: Telcos face dilemma on when to cut over from DSL to FTTH

Thu, 07/05/2012 - 2:17pm
Mike Robuck

When it comes to competing against cable operators’ DOCSIS 3.0-based data services, telcos are hamstrung by the limitations of their DSL offerings, but wading into the fiber-to-the-home (FTTH) waters is an expensive proposition.

According to a recent study by ABI Research, broadband over DSL was delivered to more than 367 million subscribers worldwide last year. On the plus side, advanced forms of DSL require a fraction of the investment when compared to the network upgrades that are needed for FTTH, but FTTH offers 10 times the bandwidth when compared to advanced DSL technologies.

“Financial instability in the advanced economies of Western Europe and lack of innovative Internet video services force telcos to look into the cost-to-value proposition delivered by making large-scale investments into FTTH,” said Adarsh Krishnan, senior analyst of TV and video at ABI Research.

Worldwide, FTTH broadband service revenues reached $29.6 billion in 2011. Global revenues from DSL broadband services have seen incremental growth in service revenue, reaching $106 billion with a CAGR growth of 14 percent in the last five years up until last year. Asia-Pacific continued to be a critical growth region for DSL broadband, with China accounting for 33 percent of the worldwide subscribers in 2011.

“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,” added Sam Rosen, practice director of TV and video at ABI Research.

Even without the fiber upgrades, ABI said telcos could still compete against cable operators with their quad-play services and cited AT&T as one example. AT&T’s U-verse delivers IPTV over ADSL2 at 15 Mbps bandwidth.

ABI Research also recently penned another report that said cable operators’ advanced DOCSIS 3.0 speeds give them an edge over their competitors.

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