Render defends his FTTH data

Michael Render, president of RVA Market Research and Consulting, is defending the data in his most recent fiber-to-the-home (FTTH) report following questions from another analyst about its accuracy.

Earlier this month, RVA reported 2.14 million FTTH subscribers in North America, a number Teresa Mastrangelo, principal analyst at BroadbandTrends, called “too aggressive.”

In a letter to Telephony following that criticism, Render stood by his numbers. He wrote:

“Certainly all estimates of markets have error, but RVA uses one of the most extensive processes ever used in the telecom industry to minimize this error. We don’t just talk to vendors, we interview hundreds of providers in detail, and we interview thousands of consumers at random.

“As to Verizon’s subscriber numbers, RVA believes that 1.44 million is a good estimate for all Verizon homes connected with fiber at the end of the third quarter, with the caveat that this is an initial estimate and is not based on final official numbers from Verizon (which are usually delayed for a month.)

“Regarding Verizon, the mistake many analysts make is to solely consider the reported FiOS Internet subscribers. But there are some Verizon customers who take video over fiber and do not take the broadband Internet. This number of video-only customers is actually growing as FTTH services are introduced into areas that have strong television demand but weaker demand for broadband Internet. Dare I say it, but there are even a few voice-only customers receiving telephone service – but no video or Internet – over Verizon fiber. These need to be added to the total as well.

“As to non-Verizon FTTH providers, Teresa comments that small ILECs average a customer base of only 2,800 lines, so an average of 1,902 customers each looks excessive. But we are talking about many types of FTTH service providers, and averages are skewed upwards by a few relatively large ones such as AT&T (which is doing FTTH in greenfields), Surewest, the Jackson (Tenn.) Energy Authority, and about 25 other reasonably large deployments. (And, yes, many of the 369 other FTTH suppliers have fewer than 500 FTTH customers!)

“Her specific comment about Surewest only adding 1,200 subscribers a quarter is incorrect – Surewest is currently converting many VDSL customers to FTTH.

“As to her comment about vendor data, there is a basic problem with only relying on known vendor information and not doing in-depth field research. The PON market is highly fractured with many players, and the active/P2P piece is much higher than most analysts give credit for. There are even other types of direct fiber connections such as MSO RF/Docsis delivery over fiber instead of coax.

“I have no doubt that Teresa Mastrangelo does excellent work, so please note that I am only commenting on her criticism of our work and the fact that RVA benefits from a very deep, expensive, and time-consuming look at this specific market segment in a limited geography.”