Copper still the future of broadband

For at least a couple of decades now, fiber has always been envisioned as the ultimate broadband access technology. It's only become economically viable as a last-mile option in the last five years or so, but nowadays FTTx is the fastest growing fixed-broadband access technology, according to Point Topic, as well as the most talked about - especially now that the data exaflood is on the way, generated by high-def 3D video and other bandwidth-hungry data apps and services.

Meanwhile, just about every government-spawned national broadband plan either specifies FTTH as the preferred access technology, or is designed to encourage its deployment.

Little wonder the future is fiber. Unless it isn't.

And it might not be, according to a September Analysys Mason report that advises telcos to be cautious of fiber and focus on copper-based broadband.

"FTTH is often said to be 'future-proof', but the future appears to have veered off in a different direction," says report author and Analysys Mason principal analyst Rupert Wood.

Specifically, he says, while FTTH delivers super-fast data speeds, it lacks the kind of sexy service innovation seen in the wireless broadband space.

"The vague promise of future services may appeal to some early FTTH adopters, but will become increasingly ineffective as a selling point unless the rate of innovation in devices and services that are uniquely suitable for FTTH gets some new impetus from vendors and service providers," Wood insists. "The future cannot be simply plotted against increasing fixed-line bandwidth."

Meanwhile, government-funded broadband initiatives focused on fiber face budget issues in these economically uncertain times. Witness the debate in Australia where the NBN plan went from a wireless-based plan to a fiber-based plan as a result of the Labor Party winning the 2007 elections - and threatened to switch back this year if the Liberal/National Coalition won this year's elections due to concerns over the project's A$43 billion price tag.

The Analysys Mason report doesn't recommend that telcos abandon FTTH, but does advise them to focus more on copper-based broadband technologies like VDSL.

"Conditions vary between markets, but in general the business case [for FTTH] to move much beyond trials just isn't there and we are already beginning to see some scale-back," explains Wood.

Copper innovations

It's an interesting point, considering that to date, FTTH rollouts have mainly taken off in markets where regulators have actively encouraged operators to deploy it, such as Japan, Korea and China (the three biggest FTTx markets in Asia, with China set to steal the top spot from Japan next year, according to Pyramid Research).

The wireless factor is also a key consideration. It may be years before mobile broadband is fast enough to compete with fiber speeds, but HSPA+ already boosts cellular data speeds well into ADSL2+ territory, and LTE will take it further - maybe not fiber-level speeds, but close enough for most users.

Moreover, wireless will dominate the overall broadband picture in the next few years - Ovum predicts 3.2 billion mobile broadband subscriptions worldwide by 2015, compared to just 785 million fixed broadband subscriptions.

On the other hand, the fixed-broadband space will still grow at a CAGR of 7% in that time, Ovum adds, and mobile broadband growth generally won't come at the expense of fixed-broadband subscriptions via fixed-mobile substitution.

As for good old-fashioned DSL technology, it's not standing still either, as vendors develop techniques like DSL bonding and vectoring to milk even more data speeds out of copper.

Earlier this year, Alcatel-Lucent demonstrated a 300-Mbps connection over VDSL using "Phantom Mode" technology, which creates a "phantom" channel between two physical copper pairs, applying vectoring to eliminate the cross-talk and bonding all three pairs. And last month, Huawei Technologies showcased a 700-Mbps DSL prototype in Hong Kong using SuperMIMO technology across four twisted pairs at a distance of 400 meters.

Both technologies are at least a couple of years away from commercialization, of course. But the point is that for telcos working out their broadband access roadmap, fiber isn't necessarily the most important tool in the toolbox anymore.