Fiber to fortify service provider revenue in 2024 – Omdia

Fiber will be a strong foundation for service providers' revenue growth in 2024, according to research firm Omdia.

"Global fixed broadband revenue grew 8.2% and 7.4% in 2021 and 2022, respectively, as opposed to 3.5% and 4.7% for mobile services," reported Ronan de Renesse, senior research director for Service Provider Markets at Omdia, a sister company to Light Reading.

However, fixed broadband revenue growth slowed to 4.6% in 2023, which is around the same as mobile growth, said de Renesse. Last year marked the first time services revenue from fiber exceeded 50% of total broadband revenue. Services revenue from fiber is forecasted to grow to 53% this year, a net revenue increase of $17 billion globally, according to Omdia.

"The transition to fiber has been driving growth in the past couple of years and triggered a wave of investment in FTTP network roll-out – sometimes at the expense of 5G deployments," de Renesse said. "We anticipate that fiber will continue to be a big focus for operators throughout 2024."

Omdia predicts market consolidation, in particular among alternative network providers (altnets), in competitive markets where fiber overbuild and high borrowing costs could slow network deployments. This consolidation is likely to occur in markets including the UK, Germany and Brazil.

Related:Here's where BEAD planning funds are rolling out first

BEAD helps US market

The US market will benefit from government-funded initiatives such as the Broadband Equity Access and Deployment (BEAD) program to expand fiber investment in rural areas. The majority of the Biden administration's $42.5 billion BEAD program funding is expected to be dispersed later this year and early in 2025. The BEAD program will provide "the largest injection of federal cash into broadband network deployment in US history," reported Light Reading's Nicole Ferraro.

US fiber provider Frontier Communications is among service providers performing well from fiber deployments in recent months. In Q3 2023, Frontier added 75,000 fiber subscribers for a total of 1.79 million, reported Light Reading's Jeff Baumgartner. Frontier added 332,000 new fiber locations in Q3, which put it on track to achieve 1.3 million locations for the full year. The company's fiber revenues hit $760 million in Q3, up from $691 million in Q3 2022.

Omdia forecasts Central and Southeast Asia to be the largest fiber growth areas, predicting that they will experience a broadband revenue increase of 20% in 2024, 30% in India alone.

Mobile and fixed broadband service revenue growth by region, 2024 (%)

Fiber for AI

In addition to closing the digital divide, fiber buildouts will also be vital to supporting AI workloads in 2024, reported Light Reading's Mike Dano.

"Fiber is the key to enable a system to grow smarter and smarter at exponential rates," Corning executive Nate Hefner wrote in a Data Center Dynamics article. "For example, when a person poses a question to a digital assistant, AI functions will be interlinked with fiber connections that will analyze untold amounts of data and possible answers in real time. And as those answers become faster, more accurate and more 'human' sounding, these features will become more useful and more integrated into everyday life."