The future relies on FTTH

It is widely recognized that the future relies on FTTH. There is still much work to do, however, before everyone can enjoy the undisputed superiority of fiber connectivity – bringing the networks to those regions that are not yet covered – and ensuring that fiber is actually chosen by end subscribers should be the top priorities for the industry in 2023.

Every year, the FTTH Conference aims at covering the most crucial challenges and opportunities ahead for the fibre industry, from a variety of angles, by bringing on stage the perspective of regulatory bodies, investment funds, and top operators across Europe.

The FTTH Council Europe, being held in Madrid, April 18-20, 2023 will help all stakeholders accomplish these goals, and find actionable solutions to address the challenges ahead for them.

Spain is a mature market in terms of FTTH deployment, and we take the opportunity to reflect on the lessons we can learn from the successful fiber rollout seen in this country and, more generally, on the next steps our industry needs to undertake once the network deployment is nearly completed. Stimulating the adoption of fiber and fiber-enabled services is definitely on top of this list, and we will delve into this theme by reflecting on the most effective strategies to accelerate its take-up, both from a business and a regulatory perspective.

Particular attention will also be given to the sustainability issue and the need to rapidly adapt corporate strategies to the undergoing climate and energy crisis, by significantly reducing energy consumption and lowering our carbon footprint. Talent management and diversity will also find relevant space within the conference agenda, by means of a dedicated panel session on how to attract and retain skilled labor in a time of shortage for the industry, and by the announcement of the new Champion of Diversity Award, introduced for the first time at the FTTH Conference 2023.

In addition to this, the program will also feature the usual focuses on some key European markets like Germany and the UK, as several deep dives into the latest developments in terms of technology (moving to 10G and beyond, the decommissioning of copper networks, future applications to run on fiber networks, and the importance of in-home connectivity among these) as well as on the most recent policy and regulation initiatives that interest our industry.

Types of usage across different regions
In 2022, we saw a continuation of the growth rate we saw in the last few years in terms of coverage (the percentage of premises passed with fiber versus the total number of premises in a certain area), with point-to-multipoint technology being the top choice, when it came to deployment strategies across Europe. Fiber rollouts advanced steadily, each country with a specific pace, and the progress versus 2021 wass tangible.

If we look at the development of networks across Europe, in 2021 we officially passed the threshold of 50-percent coverage, and more than one in two households in Europe now have access to full-fiber connections. On the other hand, this also means that the road to full coverage is still long. The bulk of the remaining areas to be fiberized concentrates in three countries – Germany, Italy, and the UK – accounting for 60 percent of the remaining potential for network infrastructure deployment. Filling this gap will be crucial for Europe to reach its objective of bringing gigabit connectivity to every household by 2020.

In addition, among those households that are reached by the infrastructure, only approximately half of them are subscribing to internet services based on fiber, which translates into a big gap between having access to a full fiber network and effectively benefiting from it by engaging in a fiber subscription. Therefore, the adoption of fiber is the challenge that the FTTH Council Europe sees as the most crucial for the industry.

Finally it is the rural areas in most countries that are less covered than the rest of the population and come last in deployment plans. These are more difficult technically, and it is much more difficult to make a business for fiber rollouts in these regions. However, underserved locations have been attracting alternative operators with very agile business models that focus their efforts there as incumbents and large players are very often focusing on urban areas.

Key challenges and strategies adopted by FTTH industry
The main challenge for the FTTH industry as we see it today is how to make sure that everyone in Europe can enjoy the utmost benefits of fiber. As a matter of fact, more than 50 percent of the European population currently has potential access to fiber connectivity; however, only 1 habitant in 4 has effectively subscribed to a fiber-based service. As clearly spelled out in our latest study analyzing FTTH demand drivers and hurdles in Europe, we have made important progress in terms of making the infrastructure available to the larger population, but a lot is still in front of us and important efforts are still required to convince subscribers to adopt fiber. Take-up rates are too low in many countries and demand drivers are multiple and complex, requiring full attention from policymakers as well as from service providers. Clearly, there is no silver bullet to solve the problem of low take-up; yet we have elaborated a set of policy recommendations that can make a real difference. Based on these, the FTTH Council Europe is committed to pursue the dialogue with decision makers and industry leaders to ensure that the issue of FTTH adoption gets the right attention.

In-home connectivity should also be on top of service providers’ agenda, as the last element of the communication chain. Wi-Fi is now the natural extension of fiber and must keep up with the level of performance brought by the fixed infrastructures, to avoid the end of the network from becoming a bottleneck, especially now that the booming of web-based services, such as cloud computing, artificial intelligence, telemedicine, e-learning, and entertainment is real.

It goes without saying that particular attention nowadays should also be given to the sustainability issue, and the need to rapidly adapt corporate strategies to the undergoing climate and energy crisis, by significantly reducing energy consumption and lowering our carbon footprint. In fact, fiber has the lowest environmental impact among access network technologies – this is why a transition to full fiber network and ultimately the decommissioning of legacy copper network can bring great savings in terms of energy consumption and significantly reduce the carbon emissions generated by the telecom industry.

Ultimately, talent management also currently finds relevant space in board rooms, as retaining and attracting skilled labor is perceived as a bottleneck impacting rollout plans by many players within the FTTH value chain.

Addressing all these challenges will require important investments; we count on policymakers to support the rollout in areas where there is no viable commercial business case and, more importantly, we encourage governments and regulators to keep on creating an environment favorable to healthy competition and attractive for private investors.

Developments and trends in fibre network deployment
We can expect a continued push toward increasing fiber network coverage across Europe, with governments and regulators playing an important role in driving this expansion. In particular, there may be a focus on ensuring that underserved areas, such as rural regions and low-income neighborhoods in urban areas, receive access to high-speed broadband.

As fiber networks become more widely available, I expect to see an increase in the take-up of these services by consumers and businesses alike. This will likely be driven by a growing demand for high-speed internet access, fueled by the increasing use of bandwidth-intensive applications, such as video streaming, cloud computing, and virtual reality. Furthermore, the ongoing Covid-19 pandemic has accelerated the trend toward remote working and online education, which will also contribute to increased demand for reliable high-speed internet. However, as mentioned above, the industry needs to rapidly adopt concrete strategies to stimulate the take-up of fiber services, with the help of the regulators and the governments.

Finally, in terms of the technologies used to deploy fiber networks, we may see a continued usage of point-to-multipoint technology over the coming years, enabled by an increased capacity and a reduced latency for newer PON technologies, and a desire to run as many services as possible over a single fiber network. The transition to 10G and beyond will play a crucial role in this regard.

Overall, many opportunities and challenges are ahead for the FTTH industry, and all involved stakeholders require the knowledge and connections to address these. The FTTH Conference, and more in general the FTTH Council Europe, are committed to creating favorable conditions to make this happen.