Has Europe Switched to a Fiber Diet? Not Yet...
VALENCIA -- FTTH Conference 2018 -- As you'd expect at an event organized by an industry body that lives and breathes to promote fiber-to-the-home/building (FTTH/B), there has been a lot of positive noise about fiber-based broadband in Valencia this week and, indeed, there are some healthy growth numbers to support the notion that FTTH is (finally) picking up in the region.
For sure there are some encouraging signs: Across the extended European region (39 countries) covered by an annual report from research house IDATE (for the FTTH Council Europe, which runs this conference), FTTH/B connections are up by 20.4% in the 12 months to the end of September 2017 to 51.6 million. In the previous year the year-on-year growth was at 23%. (See BBWN article.)
And without doubt there is growth in this market for the technology suppliers, systems integrators, network builders and broadband access network operators in the coming years thanks to increasing competition from disruptive challengers such as CityFibre in the UK and Deutsche Glasfaser in Germany, wholesale efforts from the likes of Open Fiber in Italy and markets such as Spain and France, that are now reaping the benefits of helpful regulation and other factors. (See Partners Unveil 375M Plan to Build FTTH Network in Rome.)
And don't forget the impact of 5G. It's long been my view that 5G is a dead duck in the water unless it's supported by extensive, ubiquitous and dense fiber-to-the-whatever (home, building, street light etc) that can deliver backhaul and fronthaul capacity for the radio access network (mobile) operators as well as deliver residential and enterprise broadband connectivity. If the large mobile operators are serious about 5G (and I believe they are) they will need fiber to the very edge, whether it is their own or someone else's. This is a key reason why, I think, Vodafone has been acquiring cable operators and investing in FTTH projects in Europe and recently hooked up with CityFibre in the UK. (See Eurobites: Vodafone Goes Hand in Glove With CityFibre, Lays Down the Gauntlet to BT, Vodafone, CityFibre Take Their Gig to Concrete Cowland and Vodafone Commits to Gigabit in Europe.)
But the European region FTTH/B success stories are still few and far between. Russia accounts for almost 37% of all the connections, while Spain and France together account for a further 20% of the total between them. So that's three markets accounting for about 57% of the region's total and 36 countries managing just 43% of the total. That's not a good mix.
The are a number of good reasons why other countries and operators need to pull their euro fingers out and start building the foundations for more fiber access network investments (and I mean proper fiber, all the way, not just to a street cabinet that feeds copper lines).
National and regional economics should be the main driver. Every single vertical industry is undergoing some sort of digital transformation that, to hit full potential, needs a couple of key things from the tech and comms world -- affordable and efficient truly high-capacity fixed broadband connections (don't even talk to me about sub-100 Mbit/s ) and reliable cloud services. In my view that points to fiber in the ground and all the way.
For the nations that are slow off the mark, I think they will find themselves regionally disadvantaged and in the years to come will find themselves losing out on industrial investments to the countries that have a much better digital infrastructure -- Spain looks in good shape to attract new business if it can avoid a messy political break-up. The UK is a classic example of a country that still needs to look hard in the mirror and stop trying to convince itself that it's doing well. Brexit aside, the UK is lagging in terms of the fiber broadband revolution and the impact of that will start to hit home soon enough. It will likely be clouded by the impending hammer-blow that (in my view) Brexit is likely to deliver: In many ways, the Brexit factor makes it even more important that the UK gets its arse in gear over fiber infrastructure.
And as a region, Europe needs to ensure it isn't trumped (see what I did there?) by the US and Asia on global investment and innovation just because it sat on its trench-digging hands. There are other factors to consider, of course, but not having a great end-to-end fiber and cloud infrastructure should not be the reason for being a second-class industrial and economic region.
And as already mentioned, any country that wants to benefit from the 5G age won't be able to do so without an amazing fiber infrastructure. That's often overlooked.
So what Europe needs more than ever is more challengers like CityFibre and more holistic national frameworks like the one that has emerged in Spain. The business, technical and regulatory models exist, so there's no excuse.
Make Europe a truly fiber first region -- it'll be worth it in the long run.
Ray Le Maistre, Editor-in-Chief, Light Reading