November 16, 2015
Germany's Deutsche Telekom has been gradually warming to emerging fixed broadband technology G.fast and is now suggesting a recent innovation might support gigabit connection speeds for customers -- twice what the UK's BT has been trumpeting as a long-term G.fast objective.
The German incumbent has yet to announce any firm G.fast plans but has flagged its interest in the technology several times this year. At its capital markets day in February, the operator indicated that G.fast might be an option for providing services of around 500 Mbit/s in the 2018 timeframe. In the meantime, its stated aim is to focus on rolling out vectoring and super-vectoring as a means of supercharging last-mile copper connections. (See Copper Soldiers On: Broadband Special Report Part 1.)
But could recent developments persuade Deutsche Telekom AG (NYSE: DT) to invest in G.fast much sooner? The technology was originally intended for use at distribution points close to customer premises, meaning fiber would have to be rolled out that much further. BT Group plc (NYSE: BT; London: BTA), however, wants to deploy it at fiber-connected street cabinets about 300 meters away from end users, lowering rollout costs substantially. And feedback from G.fast vendors suggests this may be feasible. (See Long-Range, High-Speed Gfast Is Coming – BT.)
There is no doubt that other service providers are closely monitoring BT's current G.fast trials and subsequent moves. If the UK operator can demonstrate that G.fast combined with fiber-to-the-cabinet technology works effectively, interest in G.fast seems bound to soar among other incumbents under pressure from high-speed cable offerings. That includes Deutsche Telekom, which continues to lose out to its cable rivals -- its share of Germany's broadband market dipping to 41.2% in the July-to-September (third) quarter from 41.8% a year earlier. (See NBN Looks to G.Fast to Reduce Fiber 'Hassle'.)
Yet BT's G.fast bullishness might not be the only influencing factor. During Deutsche Telekom's recent third-quarter earnings call with financial analysts, CEO Timotheus Höttges highlighted the opportunity presented by G.fast "bonding" -- whereby copper pairs are combined to deliver even higher-speed services to customers.
"G.fast is [an] opportunity [to provide] up to 500 Mbit/s… and if you go to bonding you could double up that speed," he said during a discussion of the operator's high-speed technology options, according to a Seeking Alpha transcript. "So there are a lot of interesting technologies which could help us to accelerate the build-out."
Those remarks are especially intriguing because they came just a few weeks after G.fast chipset vendor Sckipio Technologies claimed to have made a breakthrough on bonding at the Broadband World Forum in London. "Pair bonding gets us up to 2 Gbit/s [maximum] and gives us 1 Gbit/s over 300 meters, which is a fantastic number," said Michael Weissman, Sckipio's vice president of marketing, during a recent conversation with Light Reading.
Widely regarded as the most advanced of the various G.fast chipset vendors, Sckipio is involved in BT's trials through its partnership with Adtran Inc. (Nasdaq: ADTN), a broadband equipment supplier. Although he could not disclose details of other service providers currently in discussions with Sckipio, Weissman hinted that a number of European players involved in Celtic Plus, a European ICT research initiative, could be among them. Celtic Plus lists Deutsche Telekom as one of its core members -- along with BT, France's Orange (NYSE: FTE) and Spain's Telefónica -- while Sckipio has been contributing its G.fast expertise to the initiative since March.
The rollout of gigabit broadband access networks is spreading. Find out what's happening where in our dedicated Gigabit Cities content channel here on Light Reading. Clearly, a 1Gbit/s service enabled by G.fast would be a huge step up from the 250 Mbit/s that Deutsche Telekom expects to be able to provide through super-vectoring, the next on its list of technology upgrades. It would also allow the operator to boost connection speeds without having to spend heavily on a fiber-to-the-home (FTTH) rollout, especially if it can introduce the technology at street cabinets, as BT is planning. G.fast might even allow Deutsche Telekom to bolster its broadband capabilities while bypassing some of the regulatory problems it has encountered with vectoring. Because that technology interferes with some of its wholesale offerings, the operator has had to seek permission from German authorities to restrict some of its competitors' options before it can introduce vectoring at 8,000 "close-range cabinets" throughout Germany. Although a regulatory decision on this is expected imminently, progress on vectoring has been halting ever since late 2012, when Deutsche Telekom first outlined plans to use it. At the end of last year, the operator's fiber-based (mainly VDSL) network reached 44% of German households, or about 17.7 million homes (based on data from Germany's Federal Statistical Office). Yet vectoring was available to just 2.5 million of these, a Deutsche Telekom spokesperson told Light Reading in July, and the target then was to cover just 6 million by the end of this year. Asked for a recent update on the rollout of vectoring, a Deutsche Telekom spokesperson would not disclose numbers, instead directing Light Reading to a website (German-language) that simply features broad details of the areas in which vectoring is now available. (See DT Expands Its Vectoring Commitments.) Whether G.fast would give Deutsche Telekom a speedier route to higher-speed broadband is by no means certain: BT plans to start deploying G.fast technology next year, but it will be another five before it is available to just 37% of UK homes (based on data from the UK's Office for National Statistics), if the operator's plans come to fruition. Nevertheless, G.fast could provide Deutsche Telekom with a quicker response than super-vectoring to the competitive threat coming from Germany's cable operators, some of which are now offering services of up to 400 Mbit/s. (See Tele Columbus to Launch 400Mbit/s Service.) "G.fast could play a role in Germany… [but] we will start with super-vectoring," insists a Deutsche Telekom spokesperson. But if cable competition continues to mount, and G.fast quickly delivers on its recent promises, that strategy may begin to look desperately short-sighted. — Iain Morris, , News Editor, Light Reading
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