The US fibre-to-the-home (FttH) market reached more than two million subscribers by September 2007, according to figures released by the FttH Council and the Telecommunications Industry Association (TIA). This amounts to more than 100% growth since September 2006, driven largely by Verizon’s ambitious FiOS network deployment. The number of homes passed has grown by more than 50%, from around six million to nine-and-a-half million. The take-up rate has thus increased from around 15% to 20%, principally due to the active marketing of the networks in 2007.
Apart from rising demand for bandwidth hungry services on high-speed broadband connections, one of the main drivers behind the fibre networks is the desire by the telcos for a share of the lucrative TV market. They have been putting their substantial political clout behind lobbying efforts to lower TV licensing (video franchising) regulatory hurdles, efforts which have increasingly been paying dividends. There are now around 15 states which have passed state-wide TV licensing reforms which remove the requirement to obtain multiple local licences in each municipality of operation. Several more states are expected to pass similar reforms in the near future. The franchise reforms have already started translating into TV-over-fibre subscriptions, with nearly half of the current FttH subscribers now receiving TV over their fibre connections, up 160% from the previous year.
The largest FttH network is Verizon’s, which has been deployed to around 4 million households in twelve states and reported more than 500,000 subscribers in June 2007. However, its target of passing 18 million households (between three and four million subscribers) by 2010 indicate that it does not yet regard FttH to be an economical replacement for all of its DSL network, which currently passes around 33 million households.
The other major fibre protagonist is AT&T, whose fibre strategy, comprising a Fibre-to-the-Node (FttN) network with VDSL2, is starting to gain momentum following some initial technological glitches related to Microsoft’s IPTV platform. By September 2007 it had reached around 100,000 subscribers from approximately five million homes passed. AT&T’s U-Verse TV uses an all-IPTV architecture with a per household deployment cost estimated at around half that of Verizon’s FiOS TV service. Thus although AT&T’s FttN-VDSL2 solution will not provide as high broadband speeds as Verizon’s FttH network, it may soon surpass Verizon’s subscriber numbers, albeit in different footprints. Ultimately, with nearly half of all US households expected to be passed by some form of fibre network by 2010, the cable-TV companies will have to respond quickly to this growing threat to their TV-markets.
For more information on the US Digital TV sector, see our separate report
Strategies for Fibreing Australia – Roundtable with Paul Budde and Industry Experts
Thursday 18 October 2007 – Opening address by Senator Stephen Conroy, Shadow Minister for Communications. Venue: The Observatory Hotel, 89-113 Kent Street, Sydney
Bookings and information: See the BuddComm Roundtable Schedule
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