I was very pleased with Telstra’s announcement in March 2004, foreshadowing the launch of its first FttH projects.
In late 2003 I reported that Telstra had denied any interest in rolling out FttH, so it is great that the company has finally bitten the bullet and is joining in with the 100 or so other projects around the world where FttH is being rolled out.
Japan is leading the world, with close to a million homes connected to FttH systems. However, some of the most exciting projects are currently taking place in Korea. Bright in Perth was the first company in Australia to roll out FttH; however its future is uncertain as its owners Western Power are in the process of selling their telco.
On several occasions Telstra has indicated that it is not interested in FttH it has labelled it as ‘uneconomic for the foreseeable future’. With its extensive legacy copper network Telstra will always have to develop an incremental approach towards FttH. The way forward for its legacy network (after the ADSL technology hits its limit) would be Very High Data Rate Digital Subscriber Line (VDSL) on existing copper. Could it be that competition is now driving Telstra more rapidly into the FttH direction? Apart from Bright other utilities are also pushing for FttH solutions and I have also reported several times on the FttH push in Victoria where five councils have indicated they want this for all new developments in their areas.
In the USA, close to 50 small-scale projects are underway, with FttH connections varying from a few hundred to several thousand. But the exciting news was announced in 2004 when the telcos committed to a $75 billion investment in FttH. This, of course, got everybody excited – especially the manufacturers – and the result will be (as I have predicted for some time) that in 2004 the cost of deploying FttH in greenfield operations will be equal to the costs of deploying copper cable.
While Telstra is being very careful not to create too high an expectation, I envisage that if these trials in south-east Queensland (280 multi-dwellings in new estates in Springfield and Emerald Lakes) are successful, from then on the company will predominantly roll out FttH in greenfield developments. This should start happening from mid-2005 onwards. However, only a few months after the initial announcement Telstra launched an extension program (see below).
Success in this field will also put pressure on Telstra to begin looking at existing infrastructure, where technical problems like so-called pair gain and RIM systems are making it impossible for over a million Australian households to gain access to broadband services.
Telstra has indicated that its copper network is reaching its use-by date; however, we will have to be realistic here, as a nationwide replacement of the old copper network will take a few decades to complete. As I have said before, roughly a third of the network replacement is in economically unviable areas and this will need to financed in one way or another. The government will have to play a significant role in this, and I estimate the costs to be around $5 billion. It will not necessarily have to be FttH – other technologies might be more appropriate for regional and rural areas.
I am rather surprised that Telstra is asking for financial contributions from developers to roll out FttH. This has not happened in other roll-out programs and it will be interesting to see how long it is able to do this. The FttH project in Victoria drew the interest of 73 providers. I am sure that if Telstra is serious about its activities here it will have to come back with a better deal, otherwise others will most certainly offer a more attractive package to councils and developers.
Telstra has selected Alcatel as its technical partner. The company will deploy a Broadband Passive Optical Network (BPON) Network (ATM-based). From June onwards, dwellings in the pilot areas will be connected to the fibre network through a box that will provide them with access to four telephone lines, digital pay TV (Foxtel) and Ethernet connection.
Exhibit 1 – Alcatel’s BPON platform
Alcatel’s 7340 is a standards-based BPON platform that uses coarse WDM to deliver 622Mb/s downstream and 155Mb/s upstream over a single fibre to a maximum of 32 subscribers over a distance of 20km. In addition, the single fibre uses a separate dedicated wavelength (1550 nm) to deliver high-bandwidth video services.
While other projects provide users with access to 10Mb/s and even 100Mb/s, Telstra is being a bit of a Scrooge here – it is starting with only 1.5Mb/s. It appears that it is going to follow a similar path as it did with DSL access. Other operators would like to encourage users to use as many services as possible, but Telstra appears to want to disadvantage such usage. For example, for good broadband TV, speeds of 4-6Mb/s are required. Why not make that available in a basic package so that people can start experimenting with it?
It was good to learn that the company will begin trialling wholesale services as well; a wholesale Internet Service Provider (ISP) will be a partner in this project. Customers will be charged for the service and various price packages will be tested during the pilot.
By mid-2005 an estimated 20 houses were linked to the FttH network.
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