Optimize Your FTTH Investments De-risk Your Strategy
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1 Optimize Your FTTH Investments De-risk Your Strategy Ryan McCowan & Ronan Kelly ADTRAN Product Management Adtran, Inc All rights reserved
2 2 Demand Drivers Speed Marketing creating demand for higher bandwidth DOCSIS 3.0 Competing on speed 100Mbps is the showcase offering New Entrants creating market disruption Google Fiber - Focused Gbps service offering LTE Wireless Operators Government Broadband Initiatives 100 Squared EU 2020
3 3 Evolution towards Cloud Culture Kbps Mbps 10Mbps 100Mbps Gbps Physical Content Local Storage No - Download
4 4 Evolution towards Cloud Culture Kbps Mbps 10Mbps 100Mbps Gbps Physical Content Local Storage No - Download Online Content One Time Download Local Storage
5 5 Evolution towards Cloud Culture Kbps Mbps 10Mbps 100Mbps Gbps Physical Content Online Content Cloud Services Local Storage No - Download One Time Download Local Storage Cloud Storage Regular Repeated Downloads
6 6 Evolution towards Cloud Culture Kbps Mbps 10Mbps 100Mbps Gbps Physical Content Online Content Cloud Services Local Storage No - Download One Time Download Local Storage Cloud Storage Regular Repeated Downloads Bandwidth & Service Consistency Increasingly Important
7 Access Evolution to 1Gbps and Beyond 7 Street Cabinet
8 8 What are the risks? Cross Box Subscriber Drop
9 9 Typical Operator Network Phase 1 ADSL2+ Emerging Market Phase 2 VDSL2 Developed Market Phase 3 FTTX Mature Market Cross Box Subscriber Drop
10 10 Typical Operator Network Cross Box Subscriber Drop
11 11 Typical Operator Network Cross Box Subscriber Drop Greenfield FTTP for sure Brownfield FTTP is tricky and risky There are great FTTx alternatives: Vectored VDSL2 G.fast
12 FTTH: What is the Consumer market? 12
13 FTTH: What is the Consumer market? 13 Prepared to pay a premium because it is a Fibre Service
14 FTTH: What is the Consumer market? 14 Prepared to pay a premium because it is a Fibre Service Likely retain or take up Service offering Because of the Bandwidth Speed
15 FTTH: What is the Consumer market? 15 Prepared to pay a premium because it is a Fibre Service Likely retain or take up Service offering Because of the Bandwidth Speed Service Selection Primarily driven by cost
16 Emerging Threats to FTTH Investment Model? 16
17 Emerging Threats to FTTH Investment Model? Million 20 Million 24 Million 12 Million Where will the next ARPU Erosion come from?
18 Emerging Threats to FTTH Investment Model? 18 1 Billion 40 Million 500 Million 20 Million 200 Million 24 Million 600 Million 12 Million Where will the next ARPU Erosion come from?
19 19 Google At A Glance Google At A Glance Founded 1998 (2004 IPO) $ 38 B 50 B REV ( ) $ 4.5 B annual capex $ 28 B for Google Fiber (Estimated) 54 k employees Targeting 50k to 500k homes (FTTH) Google Fiber in Kansas City Metro Announced KC project March 2011, Announced construction April 2012 (both aerial and buried fiber) Launched service July Gbps speeds offered in 180 Fiberhoods $300 fee for Free Internet 5/1 Mbps $75/mo for Gigabit Internet 1000/1000 Mbps $120/mo for Gigabit Internet + TV Building own gear and leveraging higher service take rates to improve profits. Building own STB, direct sourcing ONTs Using Social Networking to ensure higher take rates (5 25%) of neighborhoods. Additional cities announced in April 2013 Austin, TX and Provo, UT
20 20 FTTC Increasing 100 Mbps reach Street Cabinet
21 21 New Investment in FTTCab/FTTN Project Velocity IP November 2012 $14B to boost broadband Extend U-Verse FTTN coverage by 8.5M homes by 2015 FTTCab Expansion September B+ cooperative deployment FTTCab to 6.1M homes in 100 cities by the end of 2014 Compete, Transform, & Innovate December B for FTTC w/ vectoring in Germany Increase VDSL coverage from 36% to 65% by 2016
22 VDSL2 with Vectoring Mass-Market 100 Mbps Service Delivery 22 Vectoring Gain m with vectoring VDSL2 w/ Vectoring: Latest generation copper access technology for FTTN architectures Mass deployable technology in 2013 Delivers 100Mbps out to >1km/3kft with 2pr bonding Enables cost-effective and widespread delivery of 100M services Small form-factor DSLAMs optimized around vectoring coming to market Vectoring eliminates Far End CrossTalk (FEXT) and allows service providers to deploy 100 Mbps out to >1 km over two pairs of copper
23 Inherent Synergy of FTTx and FTTP 23 CO/Exchange Deep fibre is making loops shorter. Remote Terminal or Street Cabinet And shorter Small Form-factor sealed DSLAMs Distribution Point under sidewalk
24 24 Ultra Low Cost for Video Delivery Install anywhere This pit fills with water when it rains!!!
25 Copper Pairs, Binders, and Cables 25
26 VDSL2 service can achieve 100Mbps 26 Symbol Key FTTC VDSL2 Port Unused Copper-pair Activated Copper-pair No Noise Customer Premises Providing there is no noise or cross-talk between services FTTC (Street Cabinet) VDSL2 solutions can provide 100Mbps over 1 km from a Fiber to the Cabinet
27 27 Cross-talk impacts performance FTTC No Noise Far-End Cross-Talk (FEXT) can reduce VDSL2 performance by 50% or more
28 Noise, cross-talk degrades performance 28
29 29 Vectoring reduces cross-talk FTTC No Noise
30 30 Vectoring reduces cross-talk FTTC No Noise
31 31 Vectoring reduces cross-talk FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk No Noise
32 32 Vectoring reduces cross-talk FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk No Noise
33 33 Vectoring reduces cross-talk FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk No Noise Vectoring was designed to eliminate self-fext and allow service providers to deploy advanced services of 100 Mbps and beyond
34 Vectoring improves VDSL2 performance 34
35 Alien services impact vectoring benefit 35 FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk No Noise
36 Alien services impact vectoring benefit 36 FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk No Noise
37 Alien services impact vectoring benefit 37 FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk?
38 Alien services impact vectoring benefit 38 FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk Alien Service No Noise
39 Alien services impact vectoring benefit 39 FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk Alien Service No Noise All pairs within a binder need to be in the Vectoring Group otherwise vectoring doesn t provide any benefit.
40 40 System-level vectoring benefit FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk Alien Service No Noise
41 41 System-level vectoring benefit FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk AS PART OF A SYSTEM Alien Service No Noise
42 42 System-level vectoring benefit FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk AS PART OF A SYSTEM No Noise
43 43 System-level vectoring benefit FTTC Receivers send transmitters key measurements Transmitters adapt signals to cancel crosstalk AS PART OF A SYSTEM Alien Service No Noise The solution to the problem of alien pairs is to take a system-level approach to vectoring.
44 44 Vectoring Summary Increases VDSL2 bandwidth 50% or more; Attain 100Mbps per pair Works best on short loops Less than 1.5km/5kft A system-level approach is key Any alien service reduces performance For more information, watch the recording of the Fierce/ADTRAN webinar Vectoring Demystified
45 45 Summary Near-term requirement: 100Mbps Make smart investments in the face of a rapidly changing landscape Stay focused on customer experience, not technology for its own sake Beware disruptive technologies and market entrants Revenue erosion Undermine business case assumptions Incremental investment with quick ROI mitigates risk
46 46 A Comprehensive Toolkit Be technology-agile Greenfield: FTTP is the obvious choice Brownfield: FTTP economics are challenging, FTTN is an effective alternative Carriers must continue to leverage existing network to fund long-term fiber buildout Successful carriers will combine both architectures to build a profitable network The all-fiber future belongs to those who survive long enough to reach it
47 Thank You! 47
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