Global Survey Confirms Importance of DSL Acceleration Technologies to Telcos

Broadbandtrends recently conducted a global service provider survey of Telco operators regarding their plans to deploy VDSL2 Vectoring and G.fast.  Both DSL Acceleration technologies employ noise-cancellation technology that enables operators to significantly increase the speeds offered over their existing copper infrastructure.

Key findings of the survey include the following:

  • 57 percent of respondents are actively deploying VDSL2 vectoring technology or are  in trial and plan to deploy by the end of 2014
  • The overwhelming driver for deployment of VDSL2 Vectoring is to offer faster speeds; with most operators planning to offer speeds of 50-75Mbps
  • CPE compatibility remained the greatest challenge facing operators as they deploy VDSL2 Vectoring
  • Operators have low expectations for self-installation of VDSL2 Vectoring, with only 19 percent expecting 60 percent or more of their customers to self-install
  • The #1 challenge addressed by specialized software-based management for VDSL2 Vectoring was Qualifying customers for service 
  • 42 percent of respondents are currently evaluating G.fast technology, while 52 percent are unsure of its impact on VDSL2 Vectoring deployments
  • Alcatel-Lucent is perceived as the top VDSL2 Vectoring DSLAM vendor by respondents, followed by Huawei and ADTRAN

KeyDrivers_2014

“DSL Acceleration technologies – whether VDSL2 Vectoring or G.fast offer an economic alternative to Fiber-to-the-Home –  providing an interim solution that can  offer customers faster speeds in a much shorter timeframe and at a much lower cost than FTTH”, notes Teresa Mastrangelo, principal analyst with Broadbandtrends

Broadbandtrends VDSL2 Vectoring Deployment Strategies and Vendor Leadership survey analyzes results from interviews with 36 incumbent and competitive operators in North America, EMEA, Asia Pacific, and CALA about their plans for VDSL2 Vectoring deployments.  The respondents, from all major regions, represent 31 percent of all deployed DSL lines at the end of 2013. In addition, the survey features operator ratings of 8 vendors (Alcatel-Lucent, ADTRAN, Calix, ECI, Huawei, Iskratel, KEYMILE, and ZTE) on 5 criteria.

For additional information or to purchase the report, please contact Teresa Mastrangelo at 540.725.9774 or teresa@broadbandtrends.com or visit http://www.broadbandtrends.com/2014_reports to purchase online.

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Is Google Fiber Coming To YOUR town? GoogleFiber Talks Expansion.

The pressure is mounting on incumbent operators to step up to plate with its broadband services – as Google Fiber announced that it was in early discussions with 34 cities in 9 metro areas around the United States to explore what it would take to bring a new fiber-optic network to their community.

GoogleFiber_Map2014

Google plans, as early as next week, to send teams to these potential cities to meet with city officials and begin the two-part planning process.

  • Part 1:  Provide checklist to cities to help make them fiber-ready – including providing information for planning and construction as well as being the permitting process
  • Part 2:  Begin detailed city study:  Google Fiber will begin the cost and timeline analysis which includes topology assessment, housing density and condition of local infrastructure.

Each of these markets is home to either major universities or high-tech industry.  In the case of Salt Lake City – Google Fiber will likely take advantage of the UTOPIA Network which is in place to 14 communities within the area.

Google Fiber plans to announce the next city (or cities) by the end of 2014.

So what’s the Impact of this announcement?

The competitive pressure is on!  Although, nearly every incumbent operator has essentially blown off Google Fiber as a competitor – but clearly they are keeping an eye on activity – as was evidenced by AT&T matching Google Fiber in Austin, TX for 1Gig services last year.

If you look at the competitive environment in the potential cities – you see that AT&T and Comcast (including the future acquired TWC properties) will be impacted the most – as they both serve the majority of the potential cities.

GoogleFiberCities

For AT&T, we could see a possible shift in strategy away from FTTN towards FTTH, particularly in key markets such as Atlanta and Charlotte.  For Comcast, the pressure will be on pricing.  Yes they can offer 105Mbps across all of their markets – but can people afford to buy it?

Developing the Blueprint for FTTH

Another key impact is the knowledge gained from these deployments – which has been instrumental to other communities as they plan, build and market their networks.  Understanding what is required to make the business case (% of customers, ARPU, OPEX) before building is critical to success and clearly the pre-registration process is proving to be a key element being adopted by other providers.

Be Careful of Overcommitment

The big concern right now is overcommitment on the part of Google Fiber.  Although they have not provided any updates on the status of Kansas City – they appear to be behind schedule on the original build.  Additionally, it appears that the process of assessing Austin is taking significantly longer than expected. Yes, Provo is off the ground, but they didn’t have to do much – which is why I suspect they will choose cities with ALOT of available infrastructure for their next city.

Drumming Up Consumer Excitement…and Frustration

Judging by the comments on articles, twitter and Facebook after this recent announcement demand for Google Fiber is far greater than I believe most of these operators have anticipated.

Dissatisfaction with the quality and price of their current services has consumers grasping for an alternative – and who can argue with $120/month for 1Gb connectivity and 200+ HD channels – no incumbent operator can even come close to offering this type of package.

It is unlikely that Google will ever become a major operator on the scale of AT&T, Verizon or Comcast – but they are a disruptor and a catalyst for change and their impact will likely be far and wide – from more innovation in pricing and packaging to the improved quality of broadband.

According to Netflix, Google Fiber offers the best streaming  experience during primetime and with 28 million streaming customers – it would behoove broadband operators to provide a good experience for Netflix because that translates into a happy customer and one that is less likely to churn.

usa

Undoubtedly, Google Fiber is making waves in the U.S. market.  But they are also illustrating what can be done and how to do it.

 

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1-800-FREE-DATA – The Future of Mobile Billing?

Broadbandtrends is guest blogging over at ADVA Optical’s blog “Technically Speaking”  on AT&T’s Sponsored Data Plan.  To read the post, please click here.

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2012 FCC Broadband Data: 55% of Fixed Broadband Greater than 10Mbps

The FCC issued its latest Internet Access Services report for the period ending December 31, 2012, which provide details on fixed and mobile broadband in the United States.  Total broadband connections were 261.7 million, consisting of 92.6 million fixed and 169.2 million mobile broadband connections.

Some highlights from the report include the following:

  • 55% of fixed broadband subscribers receive download speeds > 10 Mbps (up from 48% in 1H12 and 46% in 2011);
  • 59% of mobile broadband subscribers receive download speeds < 3.0Mbps (down from 69% in 1H12 and 78% in 2011)
  • Mobile Broadband experienced the strongest year-over-year growth at 19 percent, followed by FTTH at 45 percent, while overall fixed broadband grew by 4.8 percent
  • Total FTTH Subscribers were 6.726 million

The impact of 1GB networks was neglible during 2012.  In fact, at the end of 2012, there were only 200,000 subscribers with speeds of 100Mbps – almost evenly split between cable and FTTH (with Cable edging out FTTH).

Surprisingly, the majority of FTTH subscribers (63%) receive speeds of 10-25Mbps.

FCC_BB_2012

The most notable takeaway from this most recent report (2012) was the growth in higher speed connections.  For the first time, more than 50 percent of fixed broadband connections exceeded 10Mbps downstream, while the number of mobile broadband subscribers with speeds 3Mbs or greater grew by 125 percent within the past six months.

Although these newer FCC reports do provide additional granularity, we believe they continue to miss the opportunity to provide a more well-rounded view of the market by eliminating useful information that was included in past reports such as segmentation of broadband subscribers by operator type (RBOC, IOC, CLEC, etc.).

Additionally, we believe the following granularity would also be useful to fully assess the U.S. broadband market:  residential versus business by type of broadband; downstream/upstream information by type of broadband (right now they only provide downstream); average downstream/upstream speeds by state to better understand just how big the bandwidth gap is from state to state; as well as pricing by region/zip code to better understand the affordability factor.

Finally, it will be interesting to see if the FCC will add a speed category for 1Gbps – given its “gigabit challenge”.

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The Latest Issue (Nov 21, 2013) of our newsletter “The Voice of Broadband” is available for download

The latest version of our  newsletter, “The Voice of Broadband” – Volume 8, Issue 8 and is available for download at http://www.broadbandtrends.com/newsletter

This issue focuses on the following:

  • Highlights from our Global Service Provider Survey on Smart Home Services
  • Akamai’s 2Q13 State of the Internet Report Highlights
  • Gig.U Issues Progress Report
  • Ericsson issues Mobility and Networked Society City Index Highlights
  • EU:  100% basic broadband coverage
  • Opinion:  Do we really need Gigabit Speeds?

To subscribe please fill out the online form at http://www.broadbandtrends.com  or please send an email with “subscribe” in the subject to editor@broadbandtrends.com.

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Global Survey Confirms Smart Home Services Key to New Revenue Opportunities for Broadband Operators

Broadbandtrends recently conducted a global service provider survey of telecommunications operators regarding their plans to offer Smart Home and Premium IT Support services.  Many service providers are looking to offer new services that leverage their broadband infrastructure to drive new revenues and increase customer loyalty.

SmartHomeDrivers

Key findings of the survey include the following:

  • The overwhelming driver for deployment of Smart Home Services is the new revenue opportunity, followed closely by customer retention
  • Home Automation and self-monitored Home Security Services are the most widely deployed Smart Home Services
  • Key Challenges for both Smart Home Services and Premium IT Support Services include  Marketing & Selling , Vendor/Partner Selection, Customer Support and the Uncertainty of the Business Opportunity
  • The sweet-spot for Smart Home Services monthly fees is $20-$30USD (15 EUR to 23 EUR)
  • An overwhelming percentage of respondents plan to offer broad support for their Premium IT Support service, rather than limiting it to devices and services they sell
  • Operators are more likely to partner for Smart Home Services than Premium IT Support Services

“In many regions broadband penetration is reaching a saturation level, where new subscriber growth will be limited, notes Teresa Mastrangelo, principal analyst with Broadbandtrends.  “As such, broadband operators are increasingly looking towards “smart services” – such as home security, home automation, and energy management, as well as expanded support services as new revenue streams.”

Broadbandtrends’ Smart Home Services/Premium IT Support Services Deployment Strategies survey analyzes results from interviews with incumbent and competitive operators about their plans to offer Smart Home Services and Premium IT Support Services.

Broadbandtrends interviewed via telephone, in-person and on-line, 67 service providers during September and October 2013, regarding their plans to offer Smart Home Services and Premium IT Support Services.  The respondents, from all major regions (North America, CALA, EMEA and Asia Pacific), represent 25 percent of all deployed fixed broadband lines at the end of 2Q13 and were either the primary decision maker or had strong influence in the planning and deployment of Smart Home Services or Premium IT Support services.

Participants provided input on a range of areas including timing of deployments; types of services offered, key drivers for deployment; key challenges; type of business model implemented, monthly pricing of services; support service demarcation point, type of customer support provided and the success of their service deployment.  We compared data between those currently offering these services to those planning to offer to understand how views change after implementation.

For additional information or to purchase the report, please visit http://www.broadbandtrends.com/2013_reports

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Do we really need Gigabit Broadband Speeds? Eventually.

The great debate continues on whether or not consumers really need gigabit speeds.  Let’s take a look back on a few other times the industry underestimated the market:

“There is no reason for any individual to have a computer in his home” – Ken Olsen, founder of legendary minicomputer company DEC

and of course, the equally famous,

“640K should be enough for anybody” – Bill Gates, Microsoft Founder

On the other hand, operators can take a more pragmatic view of the market:

“If I bet wrong, I didn’t break the future of this business,” - ”For a company of this
size, $4 billion is very little money. If I bet wrong, it’s not much money for
us to burn.” We’ll just switch gears and go fiber-to-the-prem,” - then COO Randall Stephenson, AT&T

But perhaps, the market is best summed up by Amara’s Law, which states:

“We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run”

There is no argument that demand for faster speeds continues to grow – and as speeds increase – applications and services will and do adapt to utilize that bandwidth.

Are there consumer services and applications that need gigabit speeds? No, not yet; but they are coming, judging by the number of “accelerators” that are popping up in gigabit enabled cities.

All of the mediums (copper, fiber, wireless, cable) offer upgrade paths that can enable significant bandwidth increases – with many enabling gigabit speeds.  Some make more sense than others – whether it is a time to market issue or a cost issue – but the upside is that there are options.

The number one priority of every operator  should be to make broadband 100% available – by whatever means necessary – fixed or mobile.  And according to the UN – it should be affordable – which may mean that not everyone should have or needs gigabit broadband.

There is no “universal” broadband speed target – in fact the definition of broadband varies widely from country to country and organization to organization.

Even the Broadband Commission has not defined ‘broadband’ in terms of specific speeds.  Rather it views broadband as a cluster of concepts:  always-on, high-capacity connectivity enabling combined provision of multiple services simultaneously.

And perhaps that is the right approach.  Maybe the debate should not be a fiber vs. copper or wireline vs. wireless or even Telco vs. Cable MSO.

Each operator will need to make network upgrade decisions based on their own individual circumstances – costs, competition, demand for services, etc.

And for many it will be FTTH based – so why not offer 1Gb?  Whats the harm?  If it ignites competition to upgrade – that is a good thing for everyone.

When will we need 1 Gigabit speeds? 2 years, 5 years, 10 years?  History has already demonstrated that technology typically moves faster than most people anticipate – so my advice to operators:  plan for it.

 

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Is VDSL2 Vectoring Destroying the FTTH Business Case?

This was the question posed on a recent Linked-In survey and it made me stop to think about the direction of the market.

Alot has been written about the benefits of VDSL2 Vectoring ( I myself have written extensively about this topic) – which include the ability to leverage the existing copper plant to drive significantly higher speeds (up to 100Mbps).

For many operators, VDSL2 Vectoring, provides an economic alternative to Fiber-to-the-Home – meaning they are able to offer their customers faster speeds in a much shorter timeframe and at a much lower cost.

No doubt – there are many critics of this upgrade path.  Many who view it as a ”cop-out” by the incumbent operator; stating they are wasting their money when it could be spent on FTTH.

But I would ask this – Is it better to provide 75-100Mbps to 80-90 percent of the population or 1Gbps to 10-20 percent of the population?  Especially when that 10-20 percent is already enjoying faster speeds than the rest.

When broadbandtrends surveyed operators regarding their plans to deploy VDSL2 Vectoring we asked what were their Top 3 key drivers for deploying this technology. The overwhelming driver – cited by 94 percent of respondents –  was faster speeds.

VDSL2Vectoring_Drivers

As noted, there were a number of operators that stated VDSL2 Vectoring “delayed” the need for FTTH – but in no response was this cited as the #1 driver.  In fact, in most instances, it was ranked #3.  (For further information on this survey, please visit http://www.broadbandtrends.com/2013_reports).

Deutsche Telekom which has stated it would invest EUR 6 billion for broadband roll-out  in Germany using FTTC + VDSL2 vectoring has in fact slowed its deployment of FTTH, stating that will only deploy in markets where it is profitable.  Currently, Telekom requires at least 10 percent of households to commit to the service before they will deploy the network.

However, Telekom was clear to emphasize that they are not abandoning FTTH and in fact believe that 50 percent of the CAPEX used for the FTTC + Vectoring will be applicable to FTTH networks in the future with FTTH being the long-term target for the wireline network.

In fact, I have never had a single discussion with a fixed line operator in any region that concluded with a decision to abandon FTTH in favor of VDSL2 Vectoring.  Delay is perhaps the key word.

With over 400 million DSL lines (and growing) – it simply makes economic sense for most operators to continue to leverage this infrastructure as technology allows.  And with the competitive threat that mobile broadband potentially brings – time to market is critical.

I have stated this conclusion before, but it bears repeating:

VDSL2 Vectoring is not the end-game.  But it offers operators  a solution that can address the immediate time-to-market, competitive and regulatory challenges; while allowing operators to prepare their networks for the eventual migration to FTTH.

Is VDSL2 Vectoring destroying the business case for FTTH?  I think not.  And if it is, the business case was not that solid to begin with.

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The Cable Show 2013: Too Legit To Quit

The 2013 NTCA Cable Show opened up with MC Hammer performing 2 Legit 2 Quit and while it was entertaining to most (except the gentleman sitting next to me with his fingers in his ears) the message was clear – the Cable industry is not what it used to be.  In the words of NTCA’s current president and former FCC Chairman Michael Powell – “Cable is more than great TV – it is the conduit to our future.”  After spouting a few key data points (85% of U.S. Households can receive 100Mbps+ speeds from cable and that 10 of the top 15 fastest broadband markets are U.S. states) – he closed by stating that “cable is the platform that makes our digital dreams come true.”

While this show has historically focused on the relationship between cable operators and content providers – and that theme was still quite relevant particularly in the realm of multi-screen/TV-Everywhere services - there was also considerable focus on new services such as WiFI and Home Automation/Security, the technology that makes them happen and alot of discussion around evolving business models.

Continuing a trend that started a few years ago- Comcast took the lead at the show with a number of announcements showcasing their continuing innovation and strong position/influence in the market place.  Highlights included the debut of the X2 – its next generation of its cloud-based entertainment platform, the introduction of a self-monitored home security solution, and its neighborhood WiFi initiative – to name only a few.

Multi-screen and TV-Everywhere remain hot topics for discussion and debate – especially between content providers/originators and cable operators, but the all agree that the consumer is in control.  One thing they have agreed on is that the current products are not simple enough for the majority of users and that more work needs to be done to provide a seamless experience in both authentication and the user interface.  I believe Showtime Networks chairman and CEO Matt Blank said it best “Any way to take that on demand platform and provide different access to it, we think just helps the service.”

From a WiFi perspective, the Cable WiFi Alliance announced that it now operates about 150,000 hotspots nationwide, tripling in size since the network was created last year.  Additionally, in an CTO panel held on Monday, all of the operators named WiFi as one of their strategic priorities.

From a technology perspective, hot areas were DOCSIS 3.1, CCAP, Gigabit Services, RDK, new User Interfaces and Big Data.

DOCSIS 3.1:  The specification is moving along quickly and is expected to be completed by the end of 2013.  Trials are expected to start in 2014, with deployments in 2015.  DOCSIS 3.1 uses orthogonal frequency-division multiplexing (OFDM)  that will enable cable to use existing spectrum more efficiently – with gains up to 50%.  Potential speed offerings could run as high as 10Gbps in the down stream, while gains on the lower end of the spectrum, could push potential upstream to 2 Gbps.

CCAP:  A number of vendors were showing off their technology – even if it was behind closed doors and we were sworn to secrecy.  The operators discussed this technology, announced a few trials and addressed the key drivers – so eloquently summarized by CED Magazine:

CCAP_Drivers

Gigabit Services:  The cable operators were clear to state these are already available to business customers, but they have no near term plans to offer to residential market.  Comcast stated they would establish “innovation zones” to getter understand the demand for Gigabit broadband – but believed that 4K video would likely be a driver long-term.

RDK – a number of vendors, 20 to be exact, were demonstrating their solutions based on the Reference Design Kit (RDK). RDK is a pre-integrated software bundle that creates a common framework for set-top boxes, gateways, and  other IP-based devices. By pre-integrating core software  components, RDK substantially reduces the length of time it takes to launch new hardware and software – from years to months.

Big Data:  We all know that operators have the ability to collect ALOT of data about customer usage from the set top box – what channels you watch, how many times to change a channel, etc.  But the issues about privacy remain.  Nonetheless, operators and content provider are looking at solutions that will enable them to leverage social media analytics as well as data from multi-screen devices to gain a better understanding of consumers usage and consumption patterns.

User Interfaces:  Alot of advancements in this space as companies leverage cloud technology.  Comcast, Time Warner Cable and Cox Communications all demonstrated new UI’s which have been redesigned for simplicity, more intuitive and personalized.  Additionally, we are starting to see UI that are searchable by voice commands, integrate ratings information as well as twitter scores/trends.

Overall this show continues to attracts C-level participants who are willing to share their expertise and opinions in an open forum.  Perhaps the one disappointing panel was on Broadband Innovation – with Twitter, Jawbone, Roku, Fox Media and Charter on the panel – they never really talked about how broadband has actually enabled many of these businesses – nor did they talk about what the future may hold.  A missed opportunity.

Nonetheless, Cable demonstrated its staying power – making it clear that they are as strong, if not stronger businesses than a decade ago, fueled by multiple services. Indeed – too legit to quit.

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Latest Issue (May 29, 2013) of “The Voice of Broadband” Newsletter is Now Available

The latest issue (May 29, 2013 Vol.8, Issue 4) of our monthly newsletter “The Voice of Broadband” is now available for download.

In this issue we highlight the following:

  • Global Survey Confirms Telco interest in VDSL2 Vectoring
  • FCC Seeks Comments on Technology Trials Related to ALL-IP
  • International M2M Council Launches at CTIA
  • HomeGrid Forum and HomePNA Merge
  • The World Has Caught Gigabit Broadband Fever
  • Cisco Releases VNI Forecast (2012-2017)
  • Research Highlights

To download, please visit http://www.broadbandtrends.com/newsletter.

To subscribe please fill out the online form at http://www.broadbandtrends.com  or please send an email with “subscribe” in the subject to editor@broadbandtrends.com.  To unsubscribe, please send an email with “unsubscribe” in the subject to editor@broadbandtrends.com

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