Mobile Needs a Fibre-Rich Diet - Mobile World Live

Mobile Needs a Fibre-Rich Diet

05 AUG 2010

News today that NTT, Japan’s largest telecoms company, now has almost 14 million subscribers to its Hikari fibre-to-the-home service, providing transmission speeds up to 1Gbps, underlines the Land of the Rising Speed’s leadership in the deployment of next generation broadband networks. By contrast, in Germany, Europe’s largest economy, Deutsche Telekom’s target is to connect up to four million homes to fibre by 2012, while there are less than 5,000 fibre subscribers in the U.K., according to figures published by the Fibre to the Home Council Europe in June.

At the end of 2009, more than 20% of Japanese households already had fibre-to-the-home (FTTH), while FTTH penetration in South Korea was about 15% and in the U.S. it was 5%, according to a joint study by the FTTH Councils of Asia-Pacific, Europe and North America. Lithuania, the most advanced European country, had 13% FTTH penetration at the end of 2009.

Why should the mobile industry care about the progress of fibre deployments? In developed countries, such as Japan, South Korea, Europe and North America, the extent to which fibre is deployed is going to be a major gating factor in the long-term development of mobile multimedia services. In time, fibre-to-the-home, apartment block or office will be used to provide lightning fast backhaul for femtoells (mini mobile base stations designed to provide coverage within a building) or for WiFi hotspots, easing the strain on the capacity-constrained macro mobile networks.

Similarly, fibre-to-the-curb and fibre-to-the-neigbourhood connections could be used to bolster the backhaul links for conventional mobile base stations, as well as fulfilling their primary role of improving the performance of the existing copper fixed-line connections into buildings and homes.

Precarious economics

Indeed, giving fibre networks a dual role enhancing both mobile and fixed connectivity and capacity would improve the precarious economics and business models underpinning the typically sluggish deployment of this very expensive infrastructure. One of the reasons Japan and South Korea are so far ahead in terms of fibre-to-the-home penetration is their high-levels of population density, which makes the cost of deployment per household lower. NTT said today that its Hikari fibre-to-the-home service should become profitable in the financial year to March 31, 2012, as its subscriber base rises and its average revenue per user (now about 5,825 yen or 68 US dollars) continues to creep upwards.

Of course, the extent to which new fibre networks will be used to bolster mobile connectivity and capacity is going to depend largely on how they are regulated. Many European countries have seen fraught and sometimes inconclusive negotiations between fixed-line incumbents and regulators about the level of wholesale charges competitors will have to pay to make use of these ultra high-speed links.

As the data traffic on existing networks rises inexorably, the pressure on regulators and telecoms companies to resolve these pricing issues is increasing. In the meantime, Japan’s and South Korea’s head-start on fibre, combined with their belated, but increasingly enthusiastic, embrace of smartphones, will likely help East Asia cement its global leadership in the development and deployment of mobile multimedia services.

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