On the eve of the 2012 Broadband World Forum event it is worth looking at how far things have progressed over the last 12 months.
A look back at last year’s event reminds us of two key messages: Digital Agenda targets were unlikely to be met while operators believed they could sweat their copper assets more than they were currently doing.
In response, the European Commission took matters into its own hands and released a policy statement in July aimed at jumpstarting investment in superfast broadband rollout.
As European Communications reported at the time, operators broadly welcomed the news – which focused on creating a level playing field, reducing intervention and maintaining consistency – that is due to be formally adopted later this year.
As such, it has been 12 months of stasis, with notable announcements thin on the ground.
Despite many European operators seeing broadband revenues maintain their upward curve, continued losses in voice and messaging revenues allied to an investment focus on 4G LTE and the continued economic uncertainty has stymied any “big bang” on fibre roll out.
That is not to say there has been no investment – figures seen by European Communications suggest investment in fibre is increasing, just not a rate the EU would hope for.
Juniper Networks’ David Noguer Bau highlighted some of the major problems.
“Over the past 12 months we can certainly see an increase of bandwidth per subscriber demanded, with less oversubscription, that is heavily influenced by the rise of video but also new access technologies including FTTx.
“But the price per Mb has declined. Those service providers with legacy infrastructure are suffering as they have to either decrease their end user price or increase bandwidth with new investments.
“Over the next 12 months broadband will require heavy investment to be able to provide higher capacity.”
JDSU’s Russel Taws said that “a solid business model” is growing behind fiber-to-the-home deployments.
“The challenge for the pricing model is to keep overall deployment costs down … while the ROI model relies on very low opex and maintenance costs to overcome the high cost of fibre build turn-up.”
That is easier said than done but with the afore-mentioned operator support for the EC’s new proposals, 2013 might be the year to watch.
Frank Kaufhold, managing director of broadband R&D centre UTEL, told European Communications that the French model was the way to go.
“The fibre revolution has happened in France [as the regulator decided] to divide the core and access network. Any supplier can deliver services via their core network but only one supplier can control the access network in any local area,” he said.
“This strategy has created a competitive gold rush as all of the operators are trying to claim turf by rolling out access fibre as this will become a long-term cash cow for them. This strategy will undoubtedly be copied by the rest of Europe.”
While we wait and see if this comes to fruition – and there are no guarantees – UK data from analyst firm Point Topic highlights the growing threat to operators.
Alt-nets have increased their residential customer base by 85 percent since mid-2011, and had around 8,400 fibre-based superfast end user connections at the end of 2011, the research house found.
Such figures are admittedly small, but it serves as a reminder that operators cannot be complacent – as last year’s Google Fibre announcement proved.
Progress on roll out will be seen more transparently thanks to the announcement last February that Point Topic will map broadband coverage across the continent to ascertain where gaps in service exist.
But while we get a clearer picture, experts have been keen to reiterate that speed should not be the main focus of any such roll out.
Given that, according to his company’s data, 40 million homes across Europe still can’t get 2 Mbps, Point Topic’s Tim Johnson said: “20 Mbps with good quality of service is better than 100 Mbps without.”
UK Broadband CTO Philip Marnick agreed: “There is lots of industry talk about superfast broadband and marketing is again concentrating on speed. We need to ensure that we give customers a realistic view of what they will get and when.
“Over the next year the big challenge is to ensure that we meet customer expectations.”
We will investigate how the pressure/incentives to deploy fibre marry with reality over the next few days.
Photo: (c) Eimantas Buzas - Fotolia.com