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Written by Dave Burstein
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Thursday, 16 February 2012 22:27 |
 All in the name. Korea’s #1 in penetration if 100 megabits on copper from fiber to the basement is “fiber.” Japan is #1 if only fiber all the way to the apartment is considered. The U.S. is far behind in either case, with the larger countries of Europe - except Russia - even further behind. Nearly 60% of Korean homes subscribe to one or the other and over 40% of Japanese. So do 27% of Lithuanians.
Yes, Lithuania leads Europe. They, the Russians and other Eastern Europeans generally deliver broadband by fiber to the basement and copper to the apartment, Speeds are often 100 megabits; Russia often is near the top in average Internet speeds.
"Fiber" in the U.S. only reaches 8% of homes. The vast majority of U.S. fiber lines are Verizon, which has essentially stopped building. Russia is at the same level, expanding rapidly. China is only at 4%, although they are expanding at a rate of 10M a quarter.
The charts below, from iDate and the Fiber to the Home Council, are worth a look.
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Written by Dave Burstein
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Wednesday, 02 November 2011 01:32 |
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“Growth Still A Challenge” Nikos Theodosopoulos writes about Tellabs, but he could be writing about almost any supplier to telcos or cablecos. The total market is limited by the carriers cutting investment. Nearly all suppliers will be flat to down for the foreseeable future. Even being just slightly down is doing well on the wireline side, where so many carriers are dis-investing.
High expectations hit particularly hard at Calix, down 20% in a day when sales disappointed and 60% in three months. Actually, Calix is doing fairly well, sweeping most of the contracts in the U.S. independents. They lost a large contract to Adtran when Adtran cut the price so low it noticeably reduced overall corporate margins, but are winning far more than they are losing.
Now it’s been announced, I can report that Calix was the winner for gigabit CPE at Vermont Tel where I’ve done some consulting. Because it was part of a $100M stimulus project, the Vermont contract was intensely contested. A careful staff review decided Calix was their best choice. Calix had provided good support to VTEL in the past and has a good reputation for support among independent carriers. They have a substantial engineering department that can modify equipment for the customer’s needs.
Europe is currently far ahead of the U.S. in gateway capability. Among other thing, Deutsche Telekom and France Telecom now provide high definition voice and 3x3 high-speed MIMO 802.11n in standard gateways. Calix assured me that if VTEL wanted that capability they could design it. |
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Written by Dave Burstein
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Friday, 15 July 2011 17:13 |
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Verizon wants to shut down the copper where it has FiOS, so it's offering a sweet deal at the low end. Karl Bode at DSLR reports Verizon is offering "select users 3 Mbps downstream and 1 Mbps upstream FiOS service for just $20 a month." He quotes Verizon's Bob Elek "We're using the 3 Mbps FiOS Internet offer principally to migrate our 1 mbps High Speed Internet (DSL) customers and as a retention offer." However, this may only be for the first year and jumps after that. It requires a Verizon landline, otherwise a disappearing species.
Fiber costs less to maintain than copper and Verizon wants to kill the old network ASAP. Australia's NBN is going further, cutting deals with Telstra and Optus that gives customers no choice but to transfer. That was the original plan at British Telecom but ran into operational problems.
Getting the most reluctant to move to the new system will be a challenge. That's one of the reasons AT&T and Verizon are pushing the FCC to "turn off the PSTN;" it will give the stragglers no choice, even if the prices are higher.
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Written by Dave Burstein
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Sunday, 26 June 2011 14:35 |
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 Australia's Shadow Communications Minister Malcolm Turnbull believes the national fiber network is too expensive and only cabinets should get fiber because 60 meg is more than any home would need. Many disagree, Dean of communications scholars Eli Noam writes "There is no doubt in my mind that within 20 years virtually all American households will use bandwidth well above 200 Mbps.'
That 50 megabits is enough for most people was the underpining of the U.S. National Broadband Plan. No one would say it directly, but the decision was made early on that the cost of fiber was too high. Unlike Australia, the U.S. has cable to 96%, nearly all of which is upgrading to 50 and 100 megabits down and 20 megabits up. Deciding that was enough, the plan moved on to other things, including the last 5-10%. There are a number of similar decisions made by the planners and at the heart of FCC policy. Julius is comfortable abandoning the last 2% to satellite. Rural telephone carriers will be allowed to go bankrupt where cable is serving. Several at the top of the FCC want to extend that "we won't subsidize phone wires" to areas served by wireless.
60 megabits from "fiber to the node" is an amazing claim to most of us, even limited to 750 meters. AT&T gets 25 megabits and British Telecom is hoping for 40 megabits. Vectoring, now in early trials, is working well on new networks with short loops. The 60 megabits 750 meters should be achievable. Existing builds with complicated interference and cross-binder hook-ups are proving tough, but a clean new build like Turnbull hopes for the NBN should reliably go 50-60 meg the 750 meters.
Turnbull's opinions from delimiter.com.au. I'm glad the NBN is moving forward, although the costs need to be controlled very effectively.
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Written by Dave Burstein
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Thursday, 03 November 2011 13:50 |
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First must raise $800M. Goldman and other bankers are looking hard for European infrastructure investments, encouraging both established companies and entrepreneurs to consider fiber builds. Greg Mesch’s (Esat, Versatel) CityFibre has now retained aggressive Australian bankers Macquarie to raise £500M to connect a million homes directly to fibre. They are already building FTTH in Bournemouth aswell as fibre rings in York and other cities.
The EU is planning ten billion for infrastructure building and Britain likely several billion more. Cable covers only half of Britain and BT’s FTTN/DSL/FTTH is only set for two-thirds. So one-third of the country has no good choice in sight and will be welcoming to a new high-speed build. CityFibre understands and is happy to work with governments who want open access systems, a major plus.
Sky and TalkTalk each have substantial shares of the market while renting BT local loops. They - and Virgin Cable out of territory - are natural customers for any new network with the ability to take large numbers of lines from the beginning. That scale means a new build can reach breakeven and a return on investment much more quickly.
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Written by Dave Burstein
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Sunday, 21 August 2011 17:50 |
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Kei Takahashi at Merrill Lynch Japan has a buy on incumbent NTT, a company struggling since 2002. Takahashi believes “growth in IP services such as FTTH are offsetting the decline in legacy services such as telephone revenue.” He sees FTTH revenues as stable and is optimistic about the company in both the short and intermediate term.
Masayoshi Son shocked NTT a decade ago with low priced DSL, coming in at $20 when NTT was at $40 and soon adding inexpensive VOIP calls. I've reported Son took millions of customers and set a model which was confirmed by the incredible success of Free in France. NTT’s first response was to cut prices just to stay in the game while they built the world’s most extensive fiber network.
The Japanese regulator allowed NTT very favorable pricing on fiber unbundling, leaving minimal margin for broadband competitors. Over time, customers have been abandoning DSL for the faster fiber despite higher prices. NTT has a dominant position in fiber and also captures most of the value added in fiber resold to competitors.
Son’s Softbank has done very well in wireless as the first with the iPhone in Japan. Takahashi reports “Growth is slowing [as] earnings continue to decline in the broadband and infrastructure divisions due to a decline in ADSL subscribers.” He rates the other Japanese giant, KDDI, underperform.
The Japanese paradox is why some of the lowest prices in the world yirld only an average take rate. Remarkable early growth leveled off years ago. Today, fewer in Japan take DSL, fiber, or cable than in many Western countries. NTT Docomo was early with wireless data, but that’s only a partial explanation.
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Written by Dave Burstein
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Monday, 27 June 2011 13:59 |
The stimulus is paying $33M to run fiber to 340 "community anchor institutions" - schools, libraries, government buildings etc. (I'll just call them schools). Some schools are unhappy, because they feel pressured to spend $100K-$150K and more in addition. The money goes to a private company, Sovernet, working with a quango, the Vermont Telecommunications Authority. The controversy has been reported by Vermont Public Radio, the Boston Globe, Muninetworks, Burlington Free Press, and others.
Whether the deal is good or bad is a separate article. There's so much confusion around I wanted to get into the facts. It would be simpler if things were set up as perhaps $2,000/month for a 100 meg Internet connection but that's not how the NTIA proposal played out. Sovernet has broken the service into two: transport (the fiber itself) and ISP (the connection to the Internet.) A school could buy transport from Sovernet and ISP connections to the net from someone else. I consider that a theoretical sidepoint unless I see many of the schools actually doing that.
Sovernet's offer to the schools
Their primary service they describe as "100 megabits burstable to 1 gigabit." "Burstable" means that the service is 100 megabits all the time and can "burst" for limited periods to a gigabit. Usually, that means up to 5% or 10% of the time. It's a good deal because it allows for far more throughput than 100 megabits for occasional peaks.
Here's what it costs from Sovernet:
Transport: $1,000/month for "transport" to a "hub"
(Discounted to $700/month to connect an additional location. such as another school in the district.)
ISP services: Price not yet disclosed. Until Sovernet publicly offers a price, I'm going to use a figure of $1,500/month. Depending on volume, location, and services needed, similar in well connected areas can cost from $400 to $2,500. That's a pretty broad range, but Rich Kendell of Sovernet would not provide me a price. I'm not the only one in the dark about Sovernet's actual pricing; there was a complaint at the Readsboro Board of Selectman meeting. The schools need to know that cost to make an intelligent decision, because many will feel they have no choice.
Term: 5 years
Total cost over 5 years: $150,000 if the price of ISP service is $1,500/month, all included. $120,000 if ISP costs are $1,000/month. That's a substantial sum that the school should make a wise decision about, looking at all choices. I can confirm that most schools in the country pay substantially more if they want that level of service.
Fairpoint cost for similar: Fairpoint offers 100 megabits for five years for $135,000, $2261/month. Mike Smith of Fairpoint says they'd like to offer service over the "open access" fiber from Sovernet/VTA, which might be even less expensive. Neither he nor I have been able to determine what's involved in interconnection or even where the network will be going.
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Written by Dave Burstein
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Wednesday, 25 May 2011 19:18 |
 If you want to buy five million lines of fiber, Huawei will offer an incredible price on the OLT system box. Jeff Heynan of Infonetics tells me China Unicom is paying only $1/home, hoping to thereby also sell the ONT home box and the rest of the system. Unicom could go elsewhere for the home units, so it's not a deceptive "give away the razor and then they have to buy the blades," although carriers prefer to buy both sides from a single source. OLTs this cheap mean there's no reason to install anything else in a new building, thereby ensuring the fiber vendors continuing sales of cpe, maintenance and system support. Ericsson has part of the Unicom contract as well and a senior source tells me they also had to bid very low. With ONT, the price is less than $100 home. Outside of China, volumes are much lower and prices higher. Carriers in the U.S. typically need an outdoor housing and backup battery, further driving up prices. I bet Mike Quigley in Australia is paying Alcatel far more than the Chinese pay. Quantity 1,000 and even quantity 10,000 buyers are in a completely different situation, because the total system cost must be spread over very few units.
Heynan expects U.S. fiber sales to partially recover from truly terrible last year.
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