- Language: English
- 2008 Pages
- Published: October 2012
- Region: Global
Europe Telecom Insider / Vol. 1, No 7, Edition 8 - Fiber Buildouts in Europe: A Competitive Necessity for Telcos
- Published: August 2009
- Region: Europe
- 16 Pages
- Pyramid Research, Inc
At the dawn of post-recession growth in Europe, it is time for large telcos to revise capex cuts and resume fiber rollout plans, according to this new report.
Fiber Buildouts in Europe: A Competitive Necessity for Telcos examines the potential of fiber developments in Europe and the factors that increasingly push incumbents and other DSL operators toward fiber. It contains a detailed analysis of the competitive technology and fiber developments in selected countries: the Netherlands, Romania, Russia, and Spain. The 16-page report also provides the author’s five-year forecast on FTTH and FTTB in the four selected markets and in Europe overall.
In the past year, competition in the broadband and multiplay markets has become extremely tough as operators have had to fight for customers' shrinking budgets, notes Bakhyt Weeks, analyst at Pyramid Research and author of the report. "Higher speeds and more extensive bundles were introduced, often for less money," Weeks says. Looking to 2010 and beyond, as customers begin to loosen their budget strings, they will want higher speeds and more services. "As European economies start to show progress, fiber could shield telcos from mounting competition and provide opportunity for further growth," she suggests. "Telcos are racing against cable companies – and against time."
DSL has managed to gain the dominant position among broadband access technologies in some markets thanks to its historically vast network coverage; however, the pressure from other technologies is mounting. "In CEE, where DSL is growing simultaneously with other broadband technologies, the pressure is the strongest," comments Weeks. Incumbents are missing out on broadband coverage opportunities by focusing only on DSL-covered areas all across Europe. "DSL is struggling to compete with cable and particularly fiber in terms of capacity, which is becoming increasingly important especially in multiplay offerings while mobile broadband is also a threat in the up to 5Mbps speed range," Weeks explains.
"Fiber would shield telcos from mobile broadband, as its speed provides it with a strong competitive advantage even against LTE," concludes Weeks. Mobile broadband is positioned as a substitute to basic DSL, and telcos are being increasingly pushed to provide higher speeds to differentiate their offer. "As mobile broadband speeds are expected reach at least 100Mbps, DSL will continue to lose ground," she says, "the only efficient way forward is, again, fiber."
Fiber Buildouts in Europe: A Competitive Necessity for Telcos is part of the author’s Europe Telecom Insider report series.
- DSL is falling behind cable and fiber in terms of speed and price. Even in the markets where VDSL is available, such as Germany, the maximum speed is realistically around 50-100Mbps since it quickly degrades the further the end user is from the exchange. Meanwhile, digital cable broadband speeds are on the level of VDSL in most WE and the majority of CEE countries.
- Fiber allows telcos to compete with cable operators. It can comfortably support high speeds and thus a multitude of services, one of the most important being HDTV. In the next couple of years we’ll see en masse HDTV uptake across Europe, and in the next five years, we will see some higher-definition HDTV launches. Therefore, 100Mbps speed will become the market average in most European markets within five years.
- Fiber would shield telcos not only from high-end competition but also from mobile broadband, as its speed provides it with a strong competitive advantage even against LTE. Because in many European markets mobile broadband is being positioned as a substitute to basic DSL, telcos are being increasingly pushed to provide higher speeds to differentiate their offer.
- In Western Europe, we might see some large telcos pick fiber as their nationwide technology. The majority of WE markets will use fiber as a complement to DSL for the near future, but as DOCSIS 3.0 surfaces in more markets, the switch from DSL to fiber will be imminent.
- In some CEE markets, for instance Russia, it is cheaper to roll out FTTB than copper, at $50 per line. This will create an extra impetus for FTTB and, eventually, FTTH adoption in these markets. The markets where fiber emerged at the same time as DSL will at least partly leapfrog from dial-up to some form of fiber. SHOW LESS READ MORE >
BEYOND GLOOMY 2009: SPEED AS THE MAIN COMMODITY
A. Pressure on DSL from fiber, cable and other technologies is mounting
B. DSL lags fiber and cable in multiplay and broadband speeds
C. Fiber could shield telcos from competition and boost growth
CASE STUDY: The Netherlands
CASE STUDY: Romania
CASE STUDY: Russia
CASE STUDY: Spain
Table of exhibits
Exhibit 1: FTTH and FTTB access lines in Europe, 2008-2014
Exhibit 2: Stand-alone broadband and multiplay bundles offered by competing operators in the UK and Poland, price per month (local currency), August 2009
Exhibit 3: Highest-speed broadband access price per month (€, US$), August 2009
Exhibit 4: Percentage of broadband subscriptions by technology in Netherlands, 2008-2014
Exhibit 5: Broadband accounts by technology in Romania, 2008-2014
Exhibit 6: Broadband packages, price per month (€, RON where applicable), August 2009
Exhibit 7: VimpelCom’s FTTB rollout plans, 2009-2011
Exhibit 8: Broadband packages in Moscow and Orenburg, price per month (Rb, US$), August 2009
Exhibit 9: Projected fixed access lines in Spain by technology, 2009 and 2014
Exhibit 10: Highest speed broadband and triple-play access price per month (€, US$), August 2009
As European economies start to show positive growth, operators’ position on fiber coverage will become decisive for competitiveness and post-recession growth. We believe that it is the right time for telcos to refocus from DSL to fiber, as DSL is increasingly lagging in terms of coverage, capacity and price compared with cable and especially fiber. Fiber could shield telcos from mounting competition and provide opportunity for further growth. Fiber is also a safe bet against broadband fixed-mobile substitution.
This report examines the potential of fiber developments in Europe and the factors that increasingly push incumbents and other DSL operators toward fiber. It contains a detailed analysis of the competitive technology and fiber developments in selected countries: the Netherlands, Romania, Russia and Spain. The report also provides Pyramid Research’s five-year forecast on FTTH and FTTB in the four selected markets and in Europe overall.
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