29 OCTOBER 2008 -- A new report by Tariff Consultancy Ltd. finds that FTTH services are becoming increasingly competitive with conventional triple-play broadband services in Europe and are already undercutting traditional ADSL2+ services.
In a new report called "FTTH Pricing in Europe 2009," Tariff Consultancy says that an increasing number of European FTTH providers are offering a 100-Mbit/sec service at 30 euros per month. The price point of 29 to 35 euros is the most frequent price point adopted for a basic 100-Mbit/sec broadband FTTH service, and frequently an FTTH triple-play service in a competitive market.
"Although there remain significant differences in FTTH pricing, it is clear that where there are competing service providers in Europe FTTH rates -- even at 100 Mbits/sec - are becoming highly competitive with ADSL services that are a tenth of the speed," says Margrit Sessions, managing director of Tariff Consultancy.
Out of 13 FTTH providers in Europe, more than half are providing 100-Mbit/sec FTTH and triple-play services that are the same or less than the monthly rate of a lower-speed ADSL2+ triple-play service. There is also a growing threat to traditional broadband providers posed by the cable-TV operator. Cable-TV operators are in the process of upgrading existing coaxial access networks using the DOCSIS 3.0 standard to cater for high-speed IP traffic of up to 120 Mbits/sec per household.
Telecoms operators as varied as Telefonica, BT, and Swisscom are considering how to deploy FTTH networks in response to the cable-TV operators. But across Europe the deployment of FTTH is being made at different speeds.
"Operators such as FASTWEB in Italy see only a limited market for FTTH for the consumer as ADSL services are still becoming established," commented Sessions. "But in France a number of telecoms providers are offering FTTH services as the next stage as the DSL market reaches saturation. Increased fibre capacity is becoming a key differentiator for service providers."
There are a wide range of FTTH service providers in Denmark, the Netherlands, Sweden, Norway, and Finland, where a number of utility and municipal providers sell fibre capacity to a large number of service providers including in some cases the incumbent telecoms provider.
"Although it is certain that there will be new investments in FTTH, it is unlikely that there will be any major uplift in revenues if FTTH is provided as an access mechanism," Session says.
It is not enough to provide a pure fibre access, and operators are discovering that there is no single "killer application" that is driving FTTH deployments, the firm asserts.
"Instead FTTH operators will find that the increased demand for capacity plus the opportunity to offer supplementary services including TV on demand, symmetrical bandwidth, music, and storage services to boost ARPU,"
concludes Sessions.
It will be those FTTH providers that are most successful in selling additional services that will see a greater return on their fibre investment, Tariff Consultancy says. But providers should be aware that as equal access networks will be the preferred model to deploy FTTH, as it is more economic to lay a single network infrastructure but offer multiple service providers through that infrastructure.
Service providers need to focus on delivering added value services over FTTH it is likely that intense price pressure will result in a commoditised access pipe service.
"FTTH Pricing in Europe 2009" profiles pricing of more than 26 FTTH infrastructure providers are profiled across Europe. Pricing is also included of a number of service providers who offer services to the end user household over an open access FTTH infrastructure. The report provides pricing examples from key European FTTH suppliers and also compares current provider pricing with the established FTTH providers in Hong Kong, Japan and South Korea. South Korea offers clearly the lowest cost FTTH service worldwide.
The report costs 995 GBPs for a single user licence.
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