For high-capacity fixed access network build-outs, GPON technologies have often been seen as the clearest way forward -- deploying fiber to the premises instead of investing more in copper-based technologies like VDSL2. But rather than take the path most travelled, operators with embedded copper should take a closer look at the business case.
At Bell Labs Consulting, our goal is simply to find the best and most economical solution that meets our client’s needs. We look objectively at a situation, dispel myths, and present quantitative results showing operators the optimal way forward. We break down challenging problems into manageable units for our customers. They have the ability to decide how to proceed and understand the implications of their decisions.
A great example of how we work is shown in the area of fixed access economics. Here we’ve recently proven that service providers, under certain circumstances, can cost effectively deliver high speed, ultra-broadband access with VDSL2 technologies using existing copper plant.
Revisiting assumptions about fixed access economics is challenging but well worth the effort. Continuous changes to technology and business models can muddy the waters, but with high quality data and the right analytical framework, the pros and cons of various options become considerably clearer.
So how do we distinguish myth from reality in the fixed access business case? At Bell Labs Consulting, we partner with telecommunications service providers who provide much of the hard data based on their networks and experiences. We provide additional data based on our experience with other service providers all over the globe. Then we analyze and test our assumptions using our state-of-the-art, techno-economic modeling tools.
That’s important because operators are at a critical juncture. The rise of bandwidth intensive applications and increasing competition has created unprecedented demand for higher broadband access speeds to homes, as well as small and medium sized businesses.
At the same time, developments in VDSL2 vectoring and bonding technologies are changing the equation, too. Formerly, fiber-to-the-home (FTTH)-based solutions such as GPON were generally accepted as the best way to meet ultra-fast bandwidth demands of 20 Mbps, 50 Mbps, or higher. However, with the latest VDSL2 technologies, operators can cost effectively deliver speeds of up to 100 Mbps while preserving their investment in the existing copper plant. And, using G.Fast over copper, they can soon expect speeds of up to 1 Gbps over short distances.
In short, fiber isn’t the only viable technology option. With VDSL2, copper is back in the picture.
Fixed access economics
That brings us to the changing economics of fixed access network evolution. Working with major telecommunications service providers, we’ve conducted a number of studies to evaluate and compare the total cost of ownership and business case for VDSL2 and GPON technologies. Results show how technology breakthroughs and the changing marketplace, in certain circumstances, have changed our understanding of several commonly held pre-conceptions.
Here are the top line findings from our fixed access economics research:
Myth 1: GPON and point-to-point Ethernet are the only technical solutions for serving fixed access subscribers with ultra-broadband speeds.
Reality: The availability of bonding and vectoring allows for speeds of up to 100 Mbps reusing existing copper loops with VDSL2. The evolution path exists for bandwidth of up to 1 Gbps using copper. By reusing parts or all of the existing copper plant, a service provider is also able to upgrade the network much quicker than if they need to deploy a fiber plant.
Myth 2: In order to compete in ultra-broadband, a service provider must offer up to 100 Mbps to every subscriber.
Reality: The demand for access speed of greater than 50 Mbps in the residential and small/medium enterprise market is limited. Operators should conduct traffic studies in their markets to verify this objectively.
Myth 3: OPEX savings of GPON over VDSL2 are a differentiating factor in favor of FTTH.
Reality: While GPON is generally much less expensive than VDSL2 to operate on a per subscriber basis, the absolute OPEX savings may not be enough to offset the initial capital investment required to deploy GPON over a 5-year or even 10-year horizon.
Myth 4: VDSL2 is not economically feasible in areas with poor loop quality.
Reality: Even when including the additional cost from loop refurbishment in the business case, in many cases VDSL2 is still more cost effective than GPON.
Myth 5: Service providers need to lock into a single access technology when upgrading to ultra-broadband.
Reality: Multiple access technologies can be deployed in the same network to meet subscriber needs across different areas and demographics. Our latest studies show that VDSL2, GPON, and ADSL will still need to coexist in the network. Furthermore, initial deployment of VDSL2 does not preclude the later introduction of FTTH/GPON. In fact, our comparison of initial versus deferred deployment demonstrates that an up-front investment in VDSL2 with a subsequent upgrade to GPON presents a better business case than Day 1 deployment of GPON.
Get the full story. Stay tuned for the release of our Bell Labs Consulting white paper, “Recent Developments in Fixed Ultra-Broadband Network Economics.”
-  A recent Bell Labs study for a major Western European operator concluded that 40 Mbps is sufficient for a compelling high quality video, content, and data residential customer experience. A typical household with 2 high quality definition televisions (using IPTV) and two PCs or tablets will consume approximately 25 Mbps during peak usage. An Alcatel-Lucent study evaluating home bandwidth demands and forecasting them over the next several years shows that the current upper bound for this value is ~50 Mbps with it growing to ~100 Mbps by 2020 (with some additional bandwidth to handle bursts above this value). Verizon recently announced that only 62% of FiOS (FTTH) customers are subscribing to (Quantum) speeds of 50 Mbps or above, although the service offers speeds ranging from 25 Mbps to 500 Mbps Akamai provides information on their web site regarding the average bandwidth that broadband subscribers receive by country. A recent review of the site showed that most developed countries had approximately 10-30% of broadband subscribers experiencing speeds of 10 Mbps or higher. It can be assumed that subscribers measured by Akamai represent a combination of those receiving the maximum bandwidth available to them (who would upgrade to a higher speed if possible, i.e., pent-up demand) and others who subscribe based on their actual need/desire. A February 2015 press release by Ofcom, the government regulator in the United Kingdom, showed that the average fixed line residential broadband subscriber received was 22.8 Mbps. Another Ofcom report during the same time frame stated that super fast broad band (SFBB, defined as having download speeds of at least 30 Mbps) was available to 75% of the subscriber premises in the nation with a take rate of 21%.
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