Data growth in the Indian telecom market has reduced the prominence of traditional wireline broadband technologies such as digital subscriber line and cable modem. These technologies are not efficient enough to meet the customers’ demand for high-bandwidth applications such as high speed internet access, video-on-demand, high definition TV, IPTV and online gaming. In this scenario, fibre-to-the-home (FTTH) technology, which offers advantages like high bandwidth capacity and the delivery of high speed, high quality and multi-play services (data, voice and video) through a single channel, presents a strong business opportunity for telecom operators.

FTTH networks’ ability to deliver high bandwidth has made investments in this infrastructure very important for operators. They are increasingly deploying FTTH technology to complement their wireless networks. Spectrum crunch is another major factor that has led operators to look for viable alternative mediums. Also, to achieve the broadband targets set by the government under the National Telecom Policy, it will be important to drive FTTH growth along with other technologies.

Though the FTTH segment offers several opportunities, the roll-out of these networks by service providers in India has been slow. Operators face several challenges in FTTH deployment. Planning for access network fibre deployment requires a serious consideration of factors such as the demographics, geography and topology of the area to be served; the household density; the available right-of-way (RoW); selecting underground or above-ground cabling; and the service mix to be offered through the network. While operators agree that fibre is the best medium for catering to the growing data demand, the deployment of such networks involves several challenges. High RoW charges, issues in deployment, lack of consumer interest, limited government support and operator preference for next-generation technologies such as 3G and 4G are being stated as the key challenges for the Indian FTTH market.

tele.net takes a look at some of the these issues…

High costs: One of the major challenges in FTTH deployment in India is the high costs associated with network roll-out. RoW charges for laying fibre in towns and cities are very high. Service providers are being reportedly charged Rs 2 million-Rs 2.5 million per km for laying fibre, which weakens the business case for FTTx deployment.

Further, the return on investment in FTTH networks is realised only when a subscriber uses services at the connected location. The returns are impacted when subscribers shift from their location as unlike wireless connections, the FTTH network deployed at a premises remains idle until the next user occupies it. Wireless connections allow operators to provide services to customers irrespective of their location.

The high cost of the related consumer premises equipment and optical network terminals is another challenge. Currently, most of this equipment is imported, which accounts for a significant part of overall costs.

Deployment challenges: There are various issues in constructing and installing an FTTx network. These are the efficient transportation of the huge bandwidth, selecting the FTTx access mode and design, ensuring quality of experience for multi-play services, fibre resource saving, long distance coverage, reliable fibre transporting and rational planning of the optical distribution network.

Greenfield fibre deployment involves fewer challenges as compared to industrial or commercial brownfield deployment, in which case the copper infrastructure cannot be replaced completely. Also, the operator has to work with a mix of existing copper lines and new fibre links.

Currently, the RoW within housing projects or resident welfare associations is controlled by the builder, which generally gives access to one or two operators. Rolling out FTTH in these areas is viable for an operator, if it is guaranteed a subscriber base. Otherwise, competition from other operators reduces the maximum penetration an operator can expect.

Improper fibre handling: Operators have reported that most fibre-related issues result from improper installation and fibre handling practices. It is critical that each fibre strand is accurately installed and the splicing used in passive optic network installations is properly verified. The fibre must also undergo end-to-end testing before being offered to customers. However, the limited availability of a skilled workforce to deploy FTTx networks is a major issue, particularly for last mile fibre deployment.

Limited government support: The process of laying fibre involves securing approvals from multiple agencies, which is a key challenge. The lack of government intervention in addressing this issue is a major roadblock.

The governments in countries such as Finland, Germany and Singapore have been instrumental in facilitating the roll-out of FTTH networks. For instance, in Germany, the Munich government has laid an underground duct system, which can be used by all utility service providers including telecom operators to provide services to customers. The Singapore government has made it mandatory for every household to allow access to operators for deploying fibre infrastructure. Such initiatives requiring the involvement of municipal corporations have not been taken in India.

Lack of consumer awareness: The limited uptake of FTTH services is as big a challenge as the deployment of the service infrastructure. Besides the high cost of these services, the lack of relevant content to be delivered through these networks has weakened the business case for FTTH deployment in India. However, entertainment offers high potential for these services. High speed infrastructure such as FTTH needs to be supported with relevant applications and content in order to encourage users.

LTE versus FTTH

The wireless segment has put competitive pressure on fixed broadband services. The current scenario is no different with long term evolution (LTE) technology competing with FTTH. The global telecom industry remains divided on the success of LTE and FTTH when deployed on a commercial scale. FTTH supporters argue that it is the only technology with the ability to offer upload speeds that are required for services such as videoconferencing, e-education and cloud computing. On the other hand, analysts believe that 4G has the potential to connect rural and remote areas, where traditional fixed line broadband cannot be deployed. Further, wireless network roll-out involves lower time requirements as compared to that for FTTH networks. According to IDATE, as of end 2011, there were 9 million LTE subscribers globally as against 220 million FTTx users. However, the scenario is expected to change by 2016. The company predicts a tenfold increase in LTE uptake with the subscriber base reaching 900 million by that year as compared to 230 million FTTx users. Further, with the growing demand to stay connected, LTE can be seen as an important platform for offering broadband services, at least in the medium term.

Currently, operators in India are also focusing on rolling out 4G networks. However, there is a general consensus that going forward, FTTH will complement 4G instead of being replaced by it.

The way forward

Challenges notwithstanding, a fibre connection from the service provider to a customer’s premises is considered the ultimate future-proof access medium. Further, the majority of the data usage takes place within the customer premises and wireless technology does not provide the best indoor coverage as the speed provided by it depends on the signal strength. Thus, for users at home, high speed broadband services can be best availed of either through Wi-Fi or FTTH.

In fact, industry analysts believe that the Indian FTTH market will be more successful than its global counterparts on account of the country’s large population. While building new housing complexes, builders are now making a conscious effort to lay fibre instead of copper for providing cable television and telephone connectivity to each apartment. They are providing optical network terminals and optical line termination devices within the complex.

Thus, the exponential growth in data uptake has made the adoption of FTTH crucial. Addressing the challenges facing the segment will strengthen its business case going forward.