Western Europe Still in FTTH Slow Lane

Even FTTH Council Europe admits Western Europe is lagging behind, with its director general poking the Tier 1 operators to get a move on

February 15, 2012

2 Min Read
Western Europe Still in FTTH Slow Lane

MUNICH -- FTTH Conference 2012 -- Western Europe is still in the FTTH slow lane, with many of the major economies hardly registering as fiber access-enabled, according to the latest figures released by the somewhat concerned industry body FTTH Council Europe .

At the end of 2011, there were only 4.5 million FTTH (including fiber-to-the-building but not fiber-to-the-cabinet) subscribers in the European Union's 27 nations, even though 25.8 million homes have been passed with fiber (giving the EU 27 a take-up rate of just 17.5 percent), according to statistics gathered by research house Idate for the Council.

By contrast, there were 54.3 million FTTH/B subscribers in Asia/Pacific and 9.7 million in North America.

This is a real cause for concern for Western Europe, as not only are there plenty of studies that show a positive correlation between true high-speed broadband and GDP growth, but emerging communications applications such as cloud services will struggle to truly take hold without a more robust fixed-access network that cloud services users can trust to deliver the required bandwidth.

Major European markets such as Germany, Spain and the U.K. do not yet have a 1 percent FTTH penetration rate, putting them behind more fiber-advanced nations such as Lithuania (about 28 percent), Norway (nearly 15 percent) and Bulgaria (about 10 percent penetration).

Russia (which is not a member of the European Union), is showing many of the region's other major economies what can be achieved. It alone has 4.5 million subscribers and, with about 12 million homes passed, it has a take-up rate of about 38 percent.

So what's the hold-up? The FTTH Council Europe's Director General Hartwig Tauber says there's a lot that needs to be done in terms of better marketing and customer education.

But, of course, there are other issues as well. When asked whether one of the hold-ups in Western Europe is the short-sighted investment strategies of publicly listed Tier 1 telcos that consider their shareholders' short-term demands first before any long-term operational and ARPU margin gains that would likely come from investments in FTTH networks, Tauber said: "Yes. Convincing incumbents and investors about the benefits of long-term investments in passive infrastructure" is a major challenge.

"We are developing models to show to these companies. Others do see the potential, though. Pension funds in the Netherlands have been investing in FTTH projects because they see the long-term gains to be had," added Tauber.

Clearly, developing such potentially useful business and user case models is a far better use of the Council's efforts than trashing rival technologies, which it is still inclined to do at every given opportunity. (See Enough FTTH (Fiber-to-the-Hype).)

And there are plenty of companies and municipalities out there in Europe with models to share: According to Idate there are about 260 FTTH/B projects in the region.

— Ray Le Maistre, International Managing Editor, Light Reading

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