BTE 2015: It's the Fiber, Stupid
Forget the gigabit hype. As far as most operators are concerned, it's not gigabit speeds they need to invest in, but deeper fiber networks.
So says Matthew Apps, manager of Internet product management and development at TDS Telecom . Apps believes that selling gigabit broadband is necessary from a marketing perspective, but that understanding the business case for building out fiber connections is what's really important from an economic point of view. For a telco with legacy copper assets, TDS continuously analyzes when and where it needs to upgrade to fiber to reach its performance objectives.
"It's all a business case," said Apps in a conversation with Light Reading. He said TDS has to evaluate "if we kept the copper network where it is, would we erode our customer base? Or if we put fiber in here, what would that do?"
Fiber gives TDS the flexibility to market gigabit services. But it also gives the company the ability to offer broadband packages with speeds that beat out what copper can deliver, yet still fall well under the gigabit mark.
Apps talked about the halo effect of gigabit services at Light Reading's Gigabit Cities Live event in Atlanta last month. (See 6 Steps Towards a Gigabit City.)
TDS has found that while the adoption rate for gigabit broadband is still low, many customers upgrade their speeds to 50 Mbit/s or 100 Mbit/s when gigabit service is introduced. Those upgrades have a financial impact, and they're part of what has made TDS aggressive in its fiber deployments.
"Last year was a big year," said Apps, referring to fiber buildouts, "and this year will continue to be a big year as well."
Meanwhile, where gigabit service is concerned, Apps thinks the biggest problem today takes place in the home. In previous years, home networks were always faster than the Internet. Even WiFi at home outpaced the wireline connection. However, with gigabit service, home networks are now the bottleneck, and that limits what users can do with an ultra-high-speed connection to the premises.
"There's a big customer education piece," noted Apps.
In the near term, consumers need to understand that gigabit service is not really all that it's cracked up to be. At least not for most people in most homes.
Apps will speak next week at Light Reading's Big Telecom Event on the panel IoT: Partnering and the Role of Telecom in Smart/Cities/Smart Utilities.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading