Two announcements made on 12 May 2011 add to the distinct sense of energy emanating from the UK next-generation access (NGA) market:
- BT stated in its FY2011 results that it expected “to roughly double fibre-to-the-cabinet (FTTC) speeds to up to 80Mbit/s” in 2012 and that “future changes are expected to take the potential for FTTC to over 100Mbit/s”.
- Jeremy Hunt, Secretary of State for Culture, Olympics, Media and Sport, announced that he had formally set 90% NGA coverage by 2015 as the UK Government target.
These announcements come just a few weeks after Fujitsu announced that it aimed to build out mainly FTTH networks to pass 5 million rural premises within “three to five years”. It has not yet been made clear whether this 5 million would build upon existing Virgin Media coverage (51% of premises) or planned BT NGA coverage (66%).
BT will be able to double FTTC speed by using the increased frequency allocation for VDSL in a recent change to the national access network frequency plan. The obvious rationale is as a low-risk means of competing against Virgin Media cable broadband.
As telcos are fully aware, copper cannot compete against cable broadband in the long term if the main differentiator is speed. Nonetheless, there are three good reasons to continue to push copper.
- Consumers are increasingly interested in multiple personal wireless devices, such as smartphones and tablet PCs, rather than single bandwidth-hogging applications, which indicates that speed may not be such a key differentiator as it used to be. BT’s success – and the success of the other communications providers using BT FTTC – will depend on product bundling, pricing and marketing.
- There is the additional threat of 4G LTE on the horizon. Where 4G mobile broadband is already available, it looks, from a fixed operator’s point of view, worryingly like ADSL, and therefore fixed operators need to maintain service differentiation.
- There are several more ways in which the performance of copper can be improved, including pair-bonding, vectoring and phantom mode. A combination of some of these coupled with copper’s near ubiquity will be the most cost-effective way to extend the availability of superfast broadband.
BT’s current plan increases maximum potential speeds for those who can already get VDSL2 in its current form, but it does not increase coverage. Speed deteriorates over distance in such a way that those with sub-loops that are currently only just long enough to support a superfast broadband service would not get a significantly better service with the new frequency allocation. Access network frequency plans differ between countries.
BT also indicated that future improvements to its FTTC could include pair bonding. From the point of view of coverage, pair bonding has a lot to offer, because by increasing the speed of a connection, it allows subscribers on long lines where standard VDSL2 delivers sub-superfast speeds to double their speed. Extra coverage rather than extra speed is the sole reason AT&T uses pair bonding.
An estimated 83% of UK D-sides (between the cabinet and the footway box or telegraph pole) are under 800m and thereby theoretically support 40Mbit/s VDSL2 service over a single pair. If bonding added only a further 10% to this figure, then a further 1.5–1.7 million premises (6–7% of the total in the UK) would be enabled for superfast broadband, thereby nudging NGA availability closer to political targets. Figure 1 below shows potential availability of >30Mbit/s broadband in the UK if BT sticks to its plans, if the Fujitsu plan materialises, and if pair bonding extends the reach of planned FTTC deployment by a further 6%.
Figure 1: Potential premises passed by >30Mbit/s broadband by 2015, UK [Source: Analysys Mason, 2011]
Pair bonding is not without its drawbacks:
- Not every premises has a multiple-pair final drop. We believe that the majority of residential premises in the UK do have multiple pairs and many actually have four. In the USA, three is common.
- The level of overprovisioning on the D-side will almost inevitably be lower than that in final drops. This would create congestion only if a high proportion of subscribers wanted bonded services.
- Bonding requires different and more-expensive CPE.
- There will inevitably be the usual squabbles in Europe around retail, wholesale and physical access pricing.
Several incumbents, including Swisscom, Telekom Austria and Türk Telekom, have indicated interest in other technologies that extend copper performance beyond standard VDSL2:
- Vectoring reduces interference between DSL circuits on the same ‘binder’ of copper lines and thereby improves access speeds on single and multiple pairs. This could result in marginal coverage gains.
- Phantom mode can increase the speed of multiple-pair bonds even further. In a copper pair, one wire is a ground wire and one a signal wire. Phantom mode converts n-1 ground wires into signal wires in an n-multiple bonded copper connection, so in theory four copper pairs could deliver seven times the speed of one pair. We do not expect commercial products to be ready for another 12–18 months.
- Pole-mounted equipment can shorten the DSL circuit even further, and it is possible to convert the individual drops into a shared-access ring.
Our recent report FTTx roll-out and capex in developed economies: forecasts 2011–2016 argues that the threat from LTE as well as cable makes it more important for telcos to get an NGA product out as fast as possible and to as many premises as possible, than to concentrate on the admittedly insuperable access speeds of FTTH. This appears to us to be the way the wind is blowing at the moment, and we confidently expect fixed operators to make more announcements about advanced copper technologies.