The many flavours of international fibre

Comparisons between New Zealand and other broadband markets are of limited use

New Zealand’s broadband inferiority complex has us positioned as the tortoise trailing in the wake of South Korea, Japan and France’s fibre fast-track.

But is it true? Are we really as backward as portrayed? And just as critically, are these comparisons even relevant?

At the June telecommunications summit, many examples of international fibre rollout were cited – but not always contextualised. Korea and Japan have environmental, regulatory, political and indeed competitive regimes that bear little or no resemblance to those in New Zealand.

These are markets where multi-tenanted, multi-storey apartment blocks make fibre to the basement a more cost-effective option; managed economies where the government and regulator exercise considerable control over industry investment and direction. These are cities where it is not unusual for a fibre link to be run from an outside aerial in through the window — a practice that simply wouldn’t be accepted here.

Colleagues in Europe talk of the fierce competition, bandwidth growth and future-proofing behind their operator’s fibre strategies — but they also tell of markets where utilities roll out fibre to underground their electricity networks. And cities where ducts are an established public asset, like sidewalks. In short, there are often unique factors in each market that influence the business case. Factors not present here.

This is not to say that we should not observe and understand the lessons of international deployment — we absolutely must. International best practice is critical. But all too often we take an illogical leap and seek to benchmark our performance against markets, without referencing whether their local market conditions are relevant or indeed considering the scale of deployment.

Let’s look at Western Europe. In 2008, next generation access (NGA) technologies were only 3 percent of total broadband connections. Next Generation Access includes many flavours of fibre — fibre to the premises (PON and point-to-point Ethernet), fibre to the building, or fibre to the street cabinet plus VDSL2 — in addition to the cable upgrade DOCSIS3.

We are predicting significant growth out to 2012, to 28 million connections or 21 percent of all broadband. In the long term, this growth in next generation access will lead to a decrease in “first-generation” broadband connectivity after 2010. But by 2012, only 5.7 million connections will be fibre to the premises — less than a quarter of next generation access forecasts.

The cable technology DOCSIS 3 will have grown to 23 percent of NGA connections. The vast proportion of connections will be fibre to the kerb or cabinet, plus VDSL. In other words, there are different flavours of fibre and deployment according to different environments and requirements across Europe.

In 2009, IDC expects a number of Western European operators will announce further plans to deploy fibre all the way to the home, or at least to the building, as the bandwidth race between operators heats up and more clarity with regards to regulation is provided.

In some cases this will mean a de-emphasis of cabinet-based VDSL as a medium- to long-term alternative compared to earlier announced deployment plans. Nevertheless, IDC believes VDSL will be the leading NGA technology in terms of connections in the foreseeable future, given its lower cost to deploy and faster time to market.

New Zealand has, without question, been a latecomer to this NGA race. But this is changing: the sheer scale of cabinetisation to small regional centres of just 500 lines more, the growth in utility and regional fibre deployments, and new greenfields developments show New Zealand is gaining ground with its own flavours of fibre.

So rather than benchmark ourselves against these other markets, let’s take the time to understand what has driven international deployments, assess the relevance to New Zealand — but then focus on outcomes that will best serve our own unique and often challenging needs.

Nelson is telecommunications research manager for IDC New Zealand

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