FTTH with European Flair

“Point-to-point networks carry one fiber all the way from the [central office] to the end customer, and you can resell that on a wholesale basis,” Yankee Group's Felten said. “With PON, you have one feeder fiber all the way to a splitter in the field, so if you want to wholesale the customer fiber, you have to do it in the field, where you have very limited space. That implies that your competitors have to connect to your cabinets in the field, not your CO.”

That approach eliminates some of the cost savings of PONs by requiring active electronics to be deployed in the outside plant.

Regulators have taken note of PON's potential competitive limitations, Felten said. But because of its widespread deployment in Asia and its popularity in the U.S. market, PON technology has been considered a more cost-effective approach.

“PON vendors have been saying PON is cheaper,” Felten said. “But with the experience of PON and point-to-point solutions here, that is looking misguided. The difference in cost is limited; there is not a huge gap in costs.”

Where a point-to-point network shines is in delivering more bandwidth in the long term, Felten pointed out. “There is a question whether PON is absolutely future-proof,” he said. “For a number of players, it makes sense to make the choice of going with a slightly more expensive infrastructure to make sure they are laying it out once and for all.”

In France, for example, alternative provider Free chose a point-to-point FTTH network, while others have gone with PON.

“It's fairly evident at this stage that as soon as they reach a critical mass, Free will start launching services at above 100 Mb,” Felten said. “PON doesn't allow you to do that because you are splitting a 2.5 Gb service among multiple customers. With point-to-point, you don't have that issue if one customer wants a Gig. We don't know what demand is going to be like, but speed has always sold, so a point-to-point network can become the lever for differentiation. That is speculation at this stage.”

RABID COMPETITORS

European operators have been quick to compete with one another in the IPTV space, helping fuel further FTTH deployments in some cases.

Source: tvstrategies