The evolution of fixed networks to next-generation access (NGA) involves deploying fibre closer to the end user, and is currently of huge interest to operators, content owners, regulators, governments, financiers, and most importantly consumers. There is a lot of uncertainty surrounding NGA, but the biggest one is probably how any investment will be recouped. Consumers do not currently want to pay more for broadband, and many video services from operators have struggled to generate significant revenues.
Compare this to mobile broadband, which has exploded in the last 18 months from a niche business service to the mass market with many consumer electronics retailers now trying to give away a free netbook, with a lengthy contract for mobile broadband. In contrast to fixed broadband, mobile broadband is experiencing strong revenue growth in developed markets.
As mobile broadband technologies improve with the eventual deployment of long-term evolution (LTE), some industry commentators are asking if mobile broadband will displace a lot of fixed broadband connections. In reality, it may not be this simple, and the two technologies may actually need each other.
Fixed and wireless networks are converging. As increasing numbers of broadband homes have Wi-Fi already, the fixed network is no longer truly fixed as Wi-Fi enables many rooms in the home to be connected without additional wiring. Mobile operators are moving away from large base stations to a model where the network has many more localised base stations (e.g. street works that resemble lamp posts). Mobile base stations are increasingly reliant on fibre as end-user demands continue to grow. All networks will have fibre close to the end user with a final wireless connection. The question is how close to the end user will the fibre be deployed, and will the base station be in the street or the home?
Figure 1: The deployment of fibre closer to the consumer in wireless networks [Source: Analysys Mason]
Femtocells, which are smaller and cheaper base stations, provide an alternative to wireless connections by enabling fixed broadband subscribers to benefit from high-quality coverage in their home through fixed connections. As mobile data speeds increase, femtocells will require connection speeds in excess of those provided by current technologies. Under such a scenario, the fixed and mobile networks could truly converge with both working together to provide seamless coverage and services.
With the challenges in FTTx business cases, and the constant pressure to lower costs for mobile operators, is it possible that we could see both types of network sharing a common infrastructure in the future?
Analysys Mason is currently advising fixed and mobile operators on NGA and NGN issues. Analysys Mason has also been at the forefront of the debate about femtocells, having published five reports on the topic, and is currently providing guidance to clients on how to best benefit from femtocells.