Cost remains one of the key barriers to deploying fibre in Europe as operators look to meet EU targets, provide an RoI to investors and deliver connectivity to customers.
At Broadband World Forum this week, there was a general consensus that the costs are falling.
But if we focus on the end goal, that of fibre to the home, data shows there is a long way to go.
The FTTH Council Europe’s most recent figures, from September 2016, show that there were just 20.5 million FTTH/B subscribers in the European Union.
Certainly there has been progress since, with Vodafone Germany the most prominent recent example. Last month it committed to investing around €2 billion over the next four years on fibre tech.
But with the FTTH Council Europe predicting it will cost up to €156 billion to make pure fibre technology ubiquitous across the continent, money remains front and centre of the debate.
Speaking to European Communications in Berlin, the industry body’s Director General Erzsebet Fitori points out that set-up prices could be reduced by 12 percent through the reuse of existing infrastructure and implementation of the EU’s Cost Reduction Directive – a range of proposals including equipping new builds with fibre and simplifying permit processes.
She adds that this is a “conservative” estimate and notes that the EU thinks twice as much cost could be taken out.
Much of that outlay is upfront, with Fitori saying civil engineering works take between 70-80 percent of the total.
Ronan Kelly, President of the FTTH Council Europe and CTO of ADTRAN, notes that techniques such as micro-trenching are also helping to bring expenses down.
However, a study commissioned by ADTRAN found that FTTH is still “five to six times more expensive than copper alternatives”.
Stefaan Vanhastel, Head of Fixed Networks Marketing at Nokia, puts engineering costs at nearer 90 percent of the total.
“They are coming down but it is hard to get this cost out entirely,” he says.
Overall, Howard Watson, CEO of BT’s Technology Service and Operations unit, also takes the view that deployment fees are lower than they used to be.
“If we look at the FTTP economics now compared to what they were two or three years ago then we have seen a significant change for the better,” he says.
Openreach, BT’s now legally separate infrastructure arm, has committed to upping its FTTH footprint from around 300,000 premises today to two million by 2020.
Fitori remains convinced that Europe will get “near ubiquitous FTTH” although a timeline remains difficult to pin down.
But Tony Brown, Public Affairs Manager at nbn in Australia, was on hand at the show to demonstrate just how difficult reaching this end goal can be.
The wholesale company was formed in 2009 with a promise to deliver FTTH broadband to 93 percent of premises but quickly found out that this was an almost impossible promise to keep.
A target to connect one million premises by 2013 was missed by a whopping 85 percent.
The reasons for the company’s troubled start were varied, but the deployment costs Brown revealed were startling.
While the average is around €3,000 per premise, he cited one farm in Tasmania that nbn spent around €60,000 on in order to bring fibre to its door.
The eye-watering sums and lacklustre deployment schedule forced a rethink and nbn is now embracing the likes of G.fast and fibre-to-the-node (FTTN) to reach its new target of providing speeds of 50MBps to 90 percent of premises “as soon as possible”.
Around 20 percent of the final network is expected to be FTTH, Brown predicts. The exec – who has endured what he described as “terrifying” encounters in community centres across Australia to defend the company’s performance – says consumers who were promised a pure fibre nirvana eight years ago now do not care about what the tech is as long as they get a connection that works.
While he agrees with other execs that FTTH deployment costs have come down since the build started, he notes rollout time “is still a massive issue”.
While it took nbn five years to connect the first one million customers with FTTH, using existing hybrid fiber-coaxial tech and introducing FTTN has enabled the company to connect two million users within 18 months.
Certainly, Australia is of a completely different order geographically to countries in the European Union.
But even so Brown says a key learning for him is that FTTH is “not a universal solution”.
He explains: “Flexibility is the key...it’s about having a range of technologies available that can meet the particular needs of a location.”
It is interesting to note that this opinion – often put forward by challenger operators in Europe – comes from a company set up with the express intention of delivering a near ubiquitous FTTH network.
Adds Brown: “By sticking with such a slow to deploy technology as FTTP we lost millions of dollars in subscription revenues because it took so long to activate a service.”
While nbn offers a salutary lesson in over promising and under delivering, it also adds to the debate around the need for pure FTTH in Europe – at least in the short and medium term.