Europe calls for end to copper

Businesses, governments and consumers are demanding the opportunities offered by faster access. So why aren’t operators offering the fibre networks that make this possible and still invest in upgrading copper networks? HARTWIG TOUBER of the FTTH Council Europe gives us some insight.

From the operators’ point of view, continuing to invest in copper may seem a logical choice. They want to protect their legacy networks after having invested in them for decades. Operators have a vested interest in harnessing local loop copper ADSL, as connections that have been earned back some time ago provide them with a fixed monthly revenue. Replacing these would require costly planning, digging, building, testing and maintenance. Ensuring copper stays in place allows operators to control unbundling and, therefore, competition. Furthermore, shareholders expect a faster return than fibre investments can provide. However, these are all short-term arguments. To keep up with today’s demands, copper networks require costly upgrades, such as Dslam cabinets for advanced multiplexing and high Operating Expenditures for power, service and so on. But the reality is that this technology is already outdated and can hardly meet the Next Generation Access specifications of today – let alone tomorrow. While copper may be keeping shareholders happy – at least, for the time being – the long-term gains of fibre are significantly greater. Recent research has indicated that the actual cost of rolling out fibre is significantly lower than earlier estimates imply. In addition, alternative financing models, such as Public-Private Partnerships and municipality projects, offer significant possibilities for realising roll-outs without traditional shareholder involvement. The costs of fibre may seem prohibitive at first. But the only way to get a really clear picture of the overall cost is by making a solid business case. This should compare the year-on-year expense of copper upgrade over a decade with an FTTH investment based on a ten-year business case. In Germany, for example, total operators investments from 1998-2008 amounted to 82.7 billion euro, including wireless, 3G and fixed upgrades. An investment of this magnitude could have laid the basis for a fibre network – the only alternative that can guarantee support for future bandwidth requirements. All in all, it is hardly surprising that today’s copper operators aren’t keen on communicating the benefits of higher speeds to their professional and consumer clients. But increasing competition, encouraged by European and national government bodies, recent legislative decisions and well-thought out National Broadband Plans may soon be forcing them to reconsider their point of view. Financial stimulus has an important part to play in this, with the European Commission’s 7,2 billion euro injection acting as a trigger required for operators to migrate toward FTTH. Copper supporters may point out that today’s copper networks are no longer the same as those of decades ago. True, their capacity far exceeds that of earlier generations. But these speeds are still insufficient to keep up with demand when all users want the fastest possible performance at the same time. When it comes to transmitting high-bandwidth data such as video content over long distances, there is no competition. Data loss in fibre is exceptionally low and there’s no electrical crosstalk between the – passive – cables. In addition, more and more applications, such as cloud computing, require symmetry of bandwidth, which is an integral property of fibre. Copper networks just can’t upload and download at the same high speed and quality – and this poses a real threat to the roll-out of healthcare and education services which tomorrow’s society simply must have in order to maintain standards of living for a fast-growing, longer-living population. The demand for new types of service and a higher quality of services continues to rise, along with the number of connected devices, both in urban and rural regions. Although Europe appears to be at an intermediate step on the path to FTTH, reports indicate that fibre is growing faster than in previous years. Uptake doesn’t depend entirely on what the client wants, but largely on the operator’s strategy. And with fibre, an average operator can generate 46% more Average Revenue Per User and uptake levels up to 93% have been recorded. There is an undeniable, growing demand for fibre, offering operators an opportunity to significantly boost ARPU – possibly even with the help of EU funding. Fibre has higher data capacity, is more resistant to pulling, impossible to tap into without causing noticeable attenuation. Fibre takes up less space and – although the associated electronics are initially costly – it is far cheaper than copper. Really, there’s no reason to postpone the inevitable.

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