FTTH Council Europe targets ten-fold increase in fibre uptake by 2010-12, could be exceeded

June 29, 2007 - The Fibre-to-the-Home (FTTH) Council Europe has announced a target to increase Europe’s uptake of the technology by a factor of ten within three to five years.

The announcement was made by the new President of the industry body, Joeri Van Bogaert, who took over the reins last April. There were around 820,00 FTTH connections in the EU’s member states, plus Norway, Switzerland and Iceland, at the end of 2006, and Bogaert aims to increase this to 8mn by 2012. Current growth indicators suggest however that this figure could be comfortably surpassed, due to a number of factors, and Bogaert added the figures are “probably more realistic than ambitious, we may need to revisit that forecast at the end of this year.”  Contributory factors to this figure being exceeded are expected to include the prevalence of FTTH connections in buildouts and city developments, such as being undertaken in Amsterdam and Vienna, and plans announced by network operators to invest significant amounts in FTTH networks.

French ISP Free, part of the Iliad Group, has for example announced plans to invest €1bn in the connection of 4mn French homes to its fibre plant by the end of 2012.  Incumbents such as France Telecom, British Telecom and Telecom Italia are also gaining interest in investing in FTTH networks, and all three have trials and small deployments in progress at the moment: “The big shots are becoming interested,” Bogaert added, “The question is, when will it take off?”  Certainly, even if the FTTH Council’s target is exceeded, Europe will still be behind North America and many Asian countries such as Japan, Korea and China.  North America’s FTTH market is projected by research company Market Research to surpass 20mn homes by 2010, due in part to a differing regulatory climate.

Indeed, the European buildouts and city developments planned to include FTTH are thought to be a reaction to Europe’s regulatory framework, which offers less guarantees that once an operator starts investing in an FTTH network they will have the same operating rights they did when they started building it.  City, municipal and regional councils Europe-wide are also allocating public funds for the installation of FTTH networks, due to the recognised benefits of a high-speed dependable network and reluctance by many operators to risk large investments.  Even remote parts of European countries such as Finland, which still require high-speed connections for their population and local industry, are investing public funds in FTTH to help guarantee future growth.  Bogaert has announced that the FTTH Council Europe will be holding a number of workshops to address fibre access issues and discuss the varying views of policy makers across Europe.  Part of the difference in regulatory climate between the US and Europe can be attributed to practical differences between a number of EU countries – for example, in Italy between 60% and 70% of the population live in multi-dwelling units, whereas this figure is well below 10% in Ireland.

With regards to other network technologies, Bogaert comments: "We don't regard WiMax to be in direct competition with FTTH.  With WiMax as a specific example, clearly there are real advantages from a technology that provides wireless connectivity to users when they travel from place to place.  In my view, these approaches have their own virtues but are complementary to fibre."  Competitor network technologies such as cable, satellite and ADSL would lose present or potential customers if the FTTH Council Europe’s target is met, and it remains to be seen whether the fourth generation of wireless technologies will supersede them all, but the growth prospects for FTTH certainly at present look strong.