Wednesday, July 02, 2008

World Shifting to Fiber

Milepost passed; fiber outpaces cable:

Broadband Reports notes that Fiber To The Premises providers gained more broadband subscribers worldwide than Cable for the first time, 4.2 to 2.5 million. Though the press release from Point Topic that the story is based on is not specific, one has to assume that moves Fiber into a growth position behind DSL. Unlike the US, in most of the world the incumbent telcos are dominant players and they are still extending service. In most countries the movement to fiber will be driven by the incumbent telco replacing DSL. The next milestone will come when DSL adds are outpaced by fiber ones...

According to Point Topic consumer acceptence of fiber is driven by the cheapness of the bandwidth that it is possible to provide over fiber:

There have been doubts expressed that consumers will find additional
speed necessary or attractive but the evidence is that users value
bandwidth. A significant factor in their choice of technology is price.

"If you look at the cost per megabit then DSL comes in at around $20
per megabit per month taking global averages. Cable does better at
roughly $12 but they are both completely eclipsed by fibre where costs
can get as low as 50 cents per megabit per month," continues Johnson.


There are sizeable variations from country to country, region to region and operator to operator but a rule of thumb is that DSL can cost the consumer 15 times as much as fibre to get a megabit of bandwidth and cable is 7 times as expensive.

The cost per megabit is significantly cheaper. That is a message we've tried to drive home here at Lafayette Profiber. Sure, new infrastructure is expensive. It always is. But fiber is cheaper to maintain and because the new network is so much more powerful than the old hybrid networks the cost of the basic fiber product, bandwidth itself, is a fraction of the total that a less capable network needs to charge. Underneath all the bluster, from both sides, that is the basic competitive advantage of fiber to the home.

The incumbent providers in the West have claimed that consumers really don't need or want the sort of bandwidth that only Fiber To The Home provides. They certainly said exactly that to us here in Lafayette. But in the east where fiber is being made widely available the consumer begs to differ: they prefer to get more bandwidth for less. (Shock! Surprise!) The press release goes on to note:

The growth in fibre numbers is being driven by China, Japan and South
Korea where cable and DSL are losing subscribers to the fibre
technologies. While in the US, UK, France and Germany low availability
means low adoption.
The worldwide shift to fiber is underway. Lafayette is one of the few places in the United States positioned to actually occupy the leading edge in the shift toward big broadband.

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