All Roads Lead to Fiber
The supremacy of fiber as a delivery mechanism for high-quality, high-bandwidth multimedia services cannot be argued. The expectation of accessing services with a premium quality of experience is so deeply entrenched by now that it almost goes without saying: one day we will be living in a fiber access world.
Where questions arise is in relation to how we’ll arrive at that future. How rapidly should the transition be made? What are the priorities? What is the optimal copper-fiber mix for the forthcoming migration period?
As this is one of the major telecom transformations for the coming 10 to 20 years, operators must be strategic when migrating their existing networks to fiber optics. Given competitive and bottom-line pressures, capital investments must be made shrewdly. Given end-user expectations, ensuring a consistent service delivery throughout this migration exercise is absolutely essential, too.
This article examines the different approaches operators may take to fiber deployment. It discusses the main decision criteria driving operators toward any particular FTTx (fiber-to-the-home [FTTH], fiber-to-the-building [FTTB], or fiber-to-the-node [FTTN]) deployment model.
This article also outlines five key concepts that apply to any FTTx deployment scenario, breaking down the step-by-step considerations operators must make to retain a position of success today and tomorrow.
What’s In the Driver’s Seat?
If it is true that all roads lead to fiber for network operators today, where is all that fiber leading? Ultimately: to the home. FTTH is widely acknowledged to be at the end of the migration now underway. Yet, how operators reach that end must be the result of considered, strategic thinking that takes into account the specifics of their present context.
Figure 1, for example, shows how the introduction of new, high-bandwidth services and increasingly varied, intensifying competition are often cited as drivers of operators’ fiber-deployment decisions - as are outside plant investment conditions and the operator’s available assets and resources. (See Figure 1. Factors determining the operator’s FTTx strategy.)
Driver 1: Internet Protocol Television (IPTV)
This is perhaps the strongest, most common service driver propelling operators’ migrations to fiber, with standard- and high-definition TV, picture-in-picture, Video on Demand, and other modes of interactivity falling under that umbrella. Services are becoming more symmetrical, at download/upload ratios of just about 2:1. This creates significant bandwidth demands, demands that will only continue to grow. After all, FTTx deployment models have the common goal to increase the average revenue per user (ARPU) by offering bundled services.
Driver 2: Competitive Differences Across Markets
As Figure 2 shows, some markets remain asymmetric digital subscriber line (ADSL)-based. Others have migrated to widespread FTTN deployments, while some have rolled out FTTH locally and are expanding gradually. (See Figure 2. FTTx competitive segmentation.)
As expected, the competitive forces in a country are often the main drivers of an operator’s decision to adopt a specific FTTx deployment model. Some of these may include:
• Cable competition, for example, is driving most telecom operators to deploy FTTN with very high-speed DSL (VDSL). VDSL is perfectly able to compete with cable at the service level, while FTTN allows relatively fast nationwide coverage of very high-speed (20+ Mb/s) broadband. Belgacom, for instance, has covered more than 60 percent of all its subscribers with FTTN/VDSL, following a rollout period of only 3 years.
• New operators (municipalities, certain competitive local exchange carriers, etc.) often leapfrog incumbents with disruptive technologies, examples in this case being FTTH or FTTB.
• FTTH competition is driving other telecom operators to deploy FTTH as well, because fiber access is a strong marketing asset with which other technologies find it difficult to compete.
For instance, this is happening in France and Norway, where FTTH deployments are taking off in local areas while nationwide there will be a mix of DSL and fiber for a long time. (See Figure 3 for the French example.)
Driver 3: Availability of OSP Investment Conditions
A third determining factor is the availability of outside plant and other investment conditions. In some regions, governments are willing to spend on fiber rollouts to support public policies of mass broadband. As pointed out by the FTTH Council in Europe, the socioeconomic benefits of FTTH are coming increasingly clearer, and many economic stimulus packages around the world (e.g., in the U.S., EU, China, South Korea), take this into account. In others, an abundance of greenfield opportunities (fresh developments where construction is necessary and the ground is being opened up anyway) eases the cost of fiber deployment as well.
Also, residential area density has a significant impact on the average cost per subscriber. An area with double the user density of another will have about a 30 percent lower average cost per subscriber.
Driver 4: Resources Available
Resources such as time and money are also important to consider as the operator chooses its fiber migration strategy. Competitive pressure demands expedient action, yet FTTH takes time. As well, capital expenditure (CapEx) has to be managed carefully.
All of this informs the pragmatic view that a mix of fiber and copper will continue to be out there for many years to come. Indeed, by leveraging their copper plant, operators can reduce the CapEx associated with fiber rollouts. (See Figure 3. CapEx considerations and time to market.)
Bumps in the Road Toward Migration
Given all of the preceding, several typical mixed deployment scenarios emerge. An operator must decide on its main strategic FTTx model and, often, complement this with a second technology for cost and time-to-market reasons. Examples of such mixed approaches include:
• FTTN/VDSL nationwide, complemented with FTTH for greenfield deployments in response to cable competition. This allows fast and maximal reuse of the copper plant while anticipating the FTTH endgame. AT&T and KPN, respectively, have chosen GPON and Active Ethernet in such cases.
• FTTH deployed directly with GPON. This is the case with Verizon and France Telecom. SFR deploys GPON in France as well, but for specific reasons point-to-point Ethernet will be deployed in certain parts of Paris (complementing GPON). Telenor announced its main strategy based on GPON as well, but complements it with VDSL from the central office (CO) to rapidly get very high-speed coverage to up to 30 percent of subscribers. Telefonica follows a similar FTTx strategy.
• FTTB with GPON backhaul. This is Telecom Italia’s mainstream model, with small VDSL “pizza boxes” in the basements of buildings - as in Italy more than 50 percent of the population lives in medium-sized (old and historical) buildings.
Given the above-mentioned migration drivers and actual mixed deployment examples, which should now be the strategy to guide operators’ decisions? This strategy must be driven equally by business and network considerations. The business drivers, sketched out earlier, basically boil down to competition, CapEx, and time to market for new services.
On the network side, the trend today is toward consolidated COs serving networks populated with a mix of technologies. The endgame is a long-reach passive outside plant streamlining to a large extent the access operations. The objective is to eventually have a single intelligent IP/IMS service-delivery architecture on top of the FTTx network. Managing the whole should be a unified management system that brings all services and elements within a single sphere of control.
Based on a survey of carriers around the world, their competitive circumstances, business drivers and market dynamics, there is a sound strategy to use as you attempt to determine which migration tactic your company should follow. This strategy employ five pillars.
The Five Fiber Pillars
The following strategy shown in Figure 4 consists of five pillars and can be applied universally:
Pillar 1. Bring fiber to the most economical point, given competition.
Pillar 2. Match FTTH technology, topology and scale.
Pillar 3. Guarantee uniform IP service delivery across all modes of broadband access.
Pillar 4. Maintain unified subscriber, service and network management for all access technologies.
Pillar 5. Anticipate FTTH as the endgame while rolling out FTTN or FTTB.
Pillar 1: Fiber to the most economical point, given competition.
The 'most economical point' concept differs from operator to operator depending on the variety of factors already discussed. From a common starting point of CO-based ADSL, the most economical point may be central office VDSL, FTTN, FTTB, FTTH — or a mix of all of these. The existing copper infrastructure completes the connection to the user in most cases via either ADSL or VDSL, complemented by a fiber-based option — where economically and competitively possible.
Pillar 2: Match FTTH technology, topology and scale.
Worldwide, PON technology accounts for more than 80 percent of FTTH subscribers. Considering the number of subscribers connected, however, point-to-point dominates Europe as it did in the United States three or four years ago. Municipalities and utility companies account for the majority of FTTH subs today. These new operators deploy local FTTH networks, typically point-to-point or Active Ethernet — which is often an extension of their existing 'enterprise' network, and based on the same technology since smaller ICT departments may not have the necessary scale to consider new state-of-the-art GPON technologies.
Recently, however, there has been an uptake of GPON for these new operators as well, as GPON skills have become more widely available locally, and GPON is now considered a mainstream technology. (See Figure 5. Three main FTTH technologies and architectures.)
Six examples of these real life deployments are:
1. Asturias (muni, Spain) - www.asturias.es
2. Cygate (integrator, Sweden) - www.cygategroup.com
3. Jönköping Energi (utility, Sweden) - www.jonkopingenergi.se
4. NRGi Fibernet (utility, Denmark) - www.nrgifibernet.dk
5. Örebro (municipality or "muni", Sweden) - www.orebro.se
6. TransACT (Australia) - www.transact.com.au/
Compared to the smaller city-net deployments, nationwide FTTH deployments are almost always done with PON. The point-to-multipoint PON architecture has strong operational advantages compared to P2P because each PON optical line termination (OLT) port at the CO serves 32 or even 64 subscribers.
Having fewer fibers in the feeder section brings the following advantages:
• In brownfield areas, existing ducts are limited in size. Having many feeder fibers in the case of P2P requires new ducts, which results in significant CapEx and time to market disadvantages.
• In cases where right-of-way is charged per cable for access to ducts and sewers, the PON topology provides significant running cost advantages (OpEx).
• For aerial fiber, PON is the only option (c.f. NTT and Verizon), as the number of fibers has to be limited in this case.
• Fewer feeder fibers result in smaller CO space needed for PON.
• Typical power consumption for GPON is 0.5-1W/user and 3-4W/user for P2P.
Many conclude that GPON is the best technology for large-scale, nationwide FTTH deployments, enabling long-reach access and CO aggregating a large amount of users. Active Ethernet can be deployed locally in distributed network architectures with smaller nodes.
Pillar 3: Uniform IP service delivery.
Several requirements must be satisfied to ensure uniform IP service delivery, irrespective of access technology. An effective architecture will be scalable, flexible and resilient, capable of upholding service-level agreements. The network must also be inherently secure. The appropriate architecture, therefore, is one designed specifically to support Triple Play service delivery.
Two key characteristics that are emerging more and more with Triple Play service delivery over fiber access are:
1. enhanced IP Layer 3 functionality that brings additional service and user intelligence in access; and
2. the capacity for more distributed functions such as upstream policy enforcement for more robust security.
Such an architecture has been adopted today by carriers as diverse as Telstra (IP DSL), AT&T (FTTN/VDSL), France Telecom (GPON & CO/ADSL), Fiberdata and NRGi (new operators with GPON).
Pillar 4: Unified network management for all access technologies.
Adopting a unified network management system allows operators to achieve the necessary level of operations support system (OSS) consistency to meet their own business needs as well as subscriber expectations.
The four key components of this kind of system are:
1. Automated tools to reduce provisioning and maintenance costs.
2. Accommodation of the full set of legacy and future-oriented access technologies.
3. Scalability and high availability.
4. Integration with the carrier's existing OSS for flow-through processes such as fulfillment and assurance.
Pillar 5: Anticipating the FTTH endgame while transitioning to FTTN or FTTB.
Obviously, this final pillar is built into the overarching strategy described at the outset of this section, but specifically at the time of an FTTN rollout, considerations must be made for the down-the-road conversion to FTTH. Figure 6 indicates the various possibilities for FTTN to FTTH migration. (See Figure 6. Anticipating FTTH)
As the captions in the right-hand column state, Active Ethernet from a VDSL cabinet is a good option for small FTTH penetrations because it emulates the FTTN deployment topologies of copper and fiber and offers high scalability for small take rates.
Conversely, GPON from the VDSL cabinet is not ideal for smaller penetrations as it is simply too expensive, and fails to leverage the full advantages that would lead an operator to choose GPON in the first place. Rather, GPON from the CO is better suited and scales for larger penetrations.
The Road Less Traveled - Hardly!
Large-scale rollouts of VDSL began in 2007, announced by numerous operators including A&T, Belgacom, Telenor, Swisscom, KPN, Sasktel, Telecom Italia, Deutsche Telecom, Telefonica, and Chunghwa Telecom. Projections by Dell'Oro Group suggest that 100 million VDSL shipments will occur in the next 5 years.2 This is sure evidence that the higher-bandwidth evolution is underway, and that research-driven advances in DSL are enabling a staged migration, allowing operators to leverage their existing infrastructures and keep up with next-generation demands.
The all-fiber world of the future is often described as that of a fiber nation. Realizing this vision begins today with bandwidth uptake and a widespread co-mingling of technologies: VDSL, GPON, and FTTx, generally. Moving forward, networks must be, and will be, simplified.
The technology mix, however, will persist for decades (wisely) as this will allow operators to get the most out of the investments they've made, and to prepare their businesses in a measured, strategic way for the ultimate migration to fiber. It will also afford the necessary network consistency to ensure that user services are not compromised or affected negatively by the transition. This is crucial to maintaining customer loyalty and protecting service providers' market share.
Certain enablers will be required throughout this process, such as local political initiatives to deliver fiber-based broadband to citizens, and where they exist the transition can be expected to proceed more rapidly than elsewhere. Cross-industry partnerships — between telcos, utilities and municipalities — may also lower the barriers for FTTH and enable larger penetrations nationwide. Infrastructure sharing among operators may be part of such a transformation as well. Operators could benefit also from partnering with vendors to carry out mass deployments, gaining the advantage of turnkey solutions, integration support and, conceivably, the capability to deal with the growing complexity of digital home care at the customer endpoint.
About the Authors
Danny Goderis is CTO Alcatel-Lucent Bell, Managing Director Bell Labs Belgium. In his decade with Alcatel-Lucent, Danny has been active in product innovation, strategic marketing and telecommunications technology research. In his present position, he is leading Bell Labs in Belgium, the Research and Venturing organisation of Alcatel-Lucent. Research areas include fixed access (DSL, fiber), home networking, (3D) Video, IcT Web2.0 applications and infrastructure software services. Danny was formerly Marketing Director for the Fixed Access Division, responsible for DSL and Fiber Access in Europe and Asia.
Thomas Kallstenius is in charge of Alcatel-Lucent’s wireline networks product marketing for Europe, Middle East, Asia Pacific, Central and Latin America. Thomas was appointed to his current role in May 2008 and was previously responsible for GPON product marketing. He has headed research projects within the European Commission’s Framework programs and has dealt with a variety of different research topics, such as FTTH, WDM, free-space optics, network convergence and component reliability.
Stefaan Vanhastel is Product Marketing Manager FTTx for Alcatel-Lucent. He is responsible for the global marketing of Alcatel-Lucent DSL products and technology. He was appointed to his current role in 2005. Prior to joining Alcatel-Lucent, Stefaan worked at a start-up company specialized in network and datacenter infrastructure management, and in the Broadband Communications group at the University of Ghent (Belgium). He has managed research projects focusing on network performance and network management.
For more information, visit www.alcatel-lucent.com.
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