Ubiquitous fibre-to-the-home is not unaffordable, claims lobby group
The money that incumbent operators are currently spending on upgrading copper networks could be put to better use
The switchover from copper-based to completely fibre-based broadband is moving at a snail's pace, but the widely held perception that fibre-to-the-home (FTTH) is unaffordable is simply wrong, according to the FTTH Council Europe.
The word “fibre” is often used to describe fibre-to-the-cabinet (FTTC), which means that fibre optic cables are laid to street cabinets, and then traditional copper cables are used to connect homes and businesses to the street cabinets.
However, true fibre broadband is FTTH, whereby the fibre link continues from the street cabinet into the building. This is generally believed to be the more expensive option, because more of the road needs to be dug up in order to lay the fibre.
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With FTTH, end users can get connection speeds of up to 300Mbps, as opposed to FTTC, which currently offers speeds of up to 40Mbps. This means that they can take advantage of a much broader range of next-generation applications, such as telemedicine and smart energy management.
The latest annual report by the European Telecommunications Network Operators’ Association (ETNO), a consortium of incumbent network operators across Europe, states that investments in wired networks in Europe amounted to €24.8 billion in 2011. However, research by Ventura Team reveals that only €3 billion a year is invested in FTTH.
A separate report commissioned by the FTTH Council Europe last year, and carried out by analysts Comsof and Atesio, found that fulfilling the European Commission's Digital Agenda target of connecting up 100 percent of European households to a bandwidth of 30Mbps by 2020 – using just FTTH – would cost approximately €202 billion.
Nadia Babaali, communications director at the FTTH Council Europe makes the point that, if the incumbent operators continue to spend €24.8 billion a year on wired networks, they will have spent €198.4 billion by 2020 – just slightly shy of the figure needed to connect all of Europe up to FTTH in that time.
“This is only the incumbents. You’re not even talking about the alternative operators, you’re not talking about public money available for the rural areas,” Babaali told Techworld. “Why are we saying there is no money? I don’t know. There is money.”
Babaali acknowledged that the return on investment in FTTH does take longer, and shareholders tend to be looking for quick wins. However, she argued that FTTH is the only truly future-proof technology that will continue to operate when there are increasing bandwidth, quality-of-service and latency demands on the network, without the need to upgrade the infrastructure.
“If the operators had already made the choice to invest in FTTH, like Sweden did in 2001, they wouldn't be having this discussion. They would have saved a lot of time and jumped directly to the future-proofed solution,” she said.
Babaali said that FTTH is not just about doing the same things faster. It is also about enabling a whole new set of applications that can, in turn, have a positive impact on the economy.
“It's having an online health consultation on your TV set, it’s the smart grid for electricity, it’s the entertainment experience, it’s helping elderly people stay home as long as possible, it’s allowing families to move out of city centres and have a better quality of life and work from home as if they were in the office,” she said.
“It’s all these things that can be enabled by FTTH, and only by FTTH, and can actually tackle a lot of the economic challenges that we’re seeing today – like ageing population.”
She added that the European Commission is proposing to make €7 billion available for high speed broadband infrastructure as part of its Connecting Europe Facility (CEF), which in turn could generate €50 billion to €100 billion in public and private investment over 10 years to 2020.
Meanwhile, banks are willing to invest in FTTH. French operator Free recently obtained a €200 million loan from the European Investment Bank (EIB), of which 65 percent will be used to expand the operator’s fibre-optic connections.
“We’re not saying the public sector should pay for all of it – the operators are investing money, the investors are willing to lend money, and there’s public money also under European rules in certain rural areas,” said Babaali.
“So if you put the whole thing together and you think, let’s invest now in fibre to the home, some of these economic issues will get solved over the never few years, and it will prevent things getting worse in the future.”
The FTTH Council Europe's Conference 2013 will take place at the ExCeL Centre in London from 19-21 February 2013.