Brighter Outlook For Dark Fiber in 4G Era
The term 'dark fiber' appeared to sum up the fortunes of the telecoms sector during the boom-and-bust years of the late 1990s and early 2000s, when investors ploughed funds into optical fiber rollout, convinced an explosion in network traffic was imminent, only for the companies to end up bankrupt and the optical fiber 'unlit.'
But dark fiber now looks to be making a comeback, and it's the surging usage of 4G mobile services that appears largely responsible.
Mobile operators, of course, use fixed-line infrastructure as well as microwave technologies for backhaul -- the part of the network that carries traffic from base stations to the core. When it comes to the fixed-line option, copper-based T1 (North America) and E1 (Europe) lines have been up to the backhaul task in the 2G and 3G eras. Operators needing more capacity could simply use more T1s or E1s as required.
Even in aggregate, however, these legacy technologies are proving incapable of coping with the bandwidth demands of 4G LTE services.
Microwave technologies also appear to be falling short of the LTE backhaul challenge. According to mobile operator Vodafone, these technologies will need to be regularly upgraded and furnished with additional spectrum if they are to handle the growing demand for high-speed mobile services over the next three to five years. But that could entail considerable expense.
There is little doubt that optical fiber represents the optimum solution to the backhaul problem. As noted in a 2013 white paper from the FTTH Council Europe, which represents the interests of a number of infrastructure vendors, the capacity of optical fiber is virtually unlimited, and operators can upgrade the technology without having to install new cables. The XG-PON1 standard is supposed to provide downstream bandwidth of 10 Gbit/s and 2.488 Gbit/s on the upstream, but forthcoming standards promise even more capacity.
Unfortunately, the cost of rolling out optical fiber from scratch is usually prohibitive, and fixed-line incumbents tend to own most of what already lies in the ground. If those incumbents also happen to operate a mobile business -- as many do -- their rivals may be at a distinct disadvantage. Across much of Europe, wholesale optical fiber services are either unavailable or priced too highly to be economical for customers.
Vodafone has been urging the European Commission to take action, arguing that mobile competition will suffer if operators cannot access fiber backhaul at reasonable prices. This week, it was also reported to have piled pressure on Ofcom, the UK's regulatory authority, to make fixed-line incumbent BT provide dark fiber arrangements -- allowing Vodafone and others to assume control of high-capacity links. "We support the introduction of dark fiber," Vodafone is quoted as saying by the UK's Daily Telegraph newspaper in a submission to Ofcom. "With Vodafone's fixed and mobile capabilities in the UK there are huge opportunities for greater innovation following the availability of passive access."
Dark fiber is also becoming a big deal in the US market, with dark fiber provider Zayo Group hoping to raise up to $100 million in a forthcoming initial public offering. (See Zayo Files for IPO and How Zayo Spent $3.7B on Acquisitions.)
Writing in a blog, Aaron Blazar, a vice president for consulting company Atlantic-ACM, says dark fiber would allow LTE operators to "gain owner's economics at the cell site" -- essentially lowering their future operating costs after they have made the necessary upfront investments. With traditional backhaul providers shunning the dark fiber opportunity, the likes of Zayo, Fiberlight and Fibertech look set to capitalize on mobile operator interest in this area.
One issue in the US is that dark fiber providers have not always built infrastructure out to base station sites, forcing mobile operators to spend heavily on filling the gaps. In Europe, meanwhile, regulation has yet to catch up with the needs of the market.
It may be unwise to begin talking about a dark fiber boom, but the prospects for this market look brighter than they have in a long time.
— Iain Morris, Site Editor, Ultra-Broadband