FttH business model is gaining strength

The message I am getting from talks with some of the European telcos is that many of them who began to implement FttN solutions a decade or so ago now see that a profitable business model for a full FttH network is within reach. The uptake of higher-speed packages is steadily increasing. In general terms, where they still operate ADSL and HFC networks they will move straight to FttH – FttN is no longer on the agenda.

While FttN and HFC are still performing well they can see the need for upgrading – perhaps in 3-5 years’ time, but most certainly within 10 years. This also fits in with their investment models. Most of the FttN models were based on a 15-20 year investment plan and a return on their FttN investments can be reached within this timeframe.

What does this mean for Australia? Obviously we are running quite a few years behind the European and American FttN cycles and it is unlikely that we will be able to catch up with them in the next 10 years, because we don’t even have our initial FttN networks in place. Their European, American and several Asian counterparts will be well and truly underway with their full fibre networks by the time Australia has completed its FttN rollout.

However, this also brings me back to earlier comments made during the FttN vs FttH debate. A key point here was that if we are determined to roll out FttN we need to have a plan in place that will bring us to the next phase of full fibre deployment.

Based on the overseas comments it is now clear that it is economically viable (ie, profitable) to move from FttN to FttH. An issue here could be that the Australian government has a monopoly on the NBN and so market pressures to upgrade to FttH might not exist, or might be hampered in our country.

So with the reality of the MtM network for Australia we will now have to concentrate on how to best migrate from FttN to FttH; but once again, because this is a government monopoly, such a migration will not simply be driven by market forces.

Paul Budde

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