FTTH market numbers bode well for small telcos

At the 2012 FTTH Conference in Dallas, TX, the Fiber-to-the-Home (FTTH) Council Americas released its annual update of FTTH market progress in North America. The number of homes passed has risen by 10% over the past six months, the council asserts. While Verizon far and away serves the most subscribers – more than half of the total – small incumbent telephone companies have taken up the FTTH mantle and represent the current engine for growth, according to the council’s research.

"While large providers such as Verizon in the U.S., Bell and Bell Aliant in Canada, and Telmex in Mexico continue to be very important, small providers such as rural telcos, real estate developers, small competitive providers, and even rural electric co-ops are playing a key role in driving the expansion of fiber to the home," says Michael Render, president of RVA LLC, a market research firm that tracks FTTH deployment for the council.

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There are now 9 million homes connected by FTTH networks on the continent, with the number of homes passed reaching 24.3 million. To underscore the importance of smaller carriers in the FTTH space, RVA says that all but 8 of the nearly 880 FTTH service providers surveyed have fewer than 30,000 subscribers. A mere five have more than 50,000 access lines; 97% of carriers using FTTH have fewer than 10,000 access lines.

Which is not to say that large carriers other than Verizon have ignored FTTH. "In addition, other large providers are growing in importance,” adds Render. “AT&T is increasing its deployment of FTTH in new developments, and the new Google Gigabit fiber deployment in Kansas City is now fully underway."

In a presentation Monday at the annual FTTH Conference, Render revealed that the average FTTH service provider take rate in North America is 42.2% -- a figure that rises to 44.2% in the U.S. More than a half million households in North America enjoy Internet connectivity of 100 Mbps or more, according to RVA. Median tested download speeds were above 20 Mbps for FTTH subscribers, versus less than 15 Mbps for cable modem users.

Upload speed on FTTH networks average more than 9 Mbps, while cable modem upload speeds are around 3 Mbps, RVA asserts. The cost per megabit for FTTH services is $2.64 RVA states, the lowest figure among alternatives such as cable modem, DSL, and wireless. FTTH connections also are growing in Latin America, according to supplementary research presented at the conference. All-fiber networks now pass 4.2 million homes in the region, with 350,000 homes connected, according to research conducted by the consulting firm IDATE for the FTTH Council Americas LATAM Chapter.

"We found that the main fiber architecture being deployed in Latin America is FTTH, as opposed to fiber to the building, and that GPON is the preferred technology -- involving more than 80% of the deployments in both cases," commented Roland Montagne, director of the Telecoms Business Unit at IDATE. Mexico leads the region in FTTH connections, followed by Brazil. Chile and Argentina trail Mexico and Brazil by a significant margin, but show potential for growth as new deployments are underway.