FTTH still growing, but needs marketing push

HOUSTON – The economy did slow the rate of growth of fiber-to-the-home deployment, but even a miserable housing market didn't stop FTTH from growing, according to the annual survey conducted for the FTTH Council by RVA Marketing Associates.

"We all wondered what would happen to growth this year," said Michael Render, president of RVA Marketing Associates, in an interview after his presentation to the 2009 FTTH Council Conference & Expo. "We did see some decline in the rate of growth, but there was growth."

Since FTTH is often a greenfield technology – deployed in new housing areas – the decline of the housing market delayed or eliminated some FTTH construction and capital budget cuts slowed other deployments, Render said. But the fact that growth continued is an indication of market strength for FTTH.

At the same time, consumers remain largely unaware of the value of FTTH, Render said, and that is something FTTH service providers may have to address.

"The general public is not generally aware of fiber-to-the-home," Render said. Only 28% of consumers surveyed understand the difference between FTTH and other access technologies, he said, and that's something service providers themselves will have to change, especially if they want to overcome marketing by non-FTTH players that sometimes blurs the lines of how fiber is used in access networks.

"The FTTH Council is not in a position to have the marketing budget to promote the technology," Render said. "Service providers themselves don't necessarily tell consumers that their service is fiber-to-the-home. Sometimes it goes by other names, like FiOS [the Verizon brand]. And there is confusion because people are talking about all-fiber networks that aren't actually fiber-to-the-home."

For instance, many cable companies talk about their fiber optic networks when those network are hybrid fiber-coaxial cable, Render said.

"I think service providers need to promote not just the technical part of the product, but what it can do, the applications that an all-fiber network can support," Render said. "Sometimes, it's hard for people to visualize the future."

Among the quantitative findings:

• 16.3million homes are being marketed for FTTH of the 17.2 million homes passed by FTTH. There are 5.3million homes currently connected to FTTH, which is a 1000% increase over 2001.
• About 15% of North American homes are now passed by fiber and about 5% are connected.
• FTTH is being adopted at a faster pace than either copper or coaxial cable were when they were first introduced.
• Consumers perceive FTTH to be faster (67%) Internet access with more consistency (63%) and better customer service (55%); better high-definition TV service (69%) and better video on demand (56%).
• The average overall take rate for FTTH is 32.5%, but it's higher on average (53%) among non-RBOC providers, some of whom have take rates in the 70% to 80% range. The average RBOC take rate is 28%.
• 17% of those who have FTTH say they are working from home more as a result and more of them had home-based businesses as well

Due to improvements in Internet access speeds offered by cable companies, FTTH and cable are "leaving DSL in the dust," Render said. "We are seeing significant speed differences," he said.