FTTH's Second Decade Begins:
Where We Are, Where We Are Going
North American FTTH: 10 Year Report Card
Presented by:
Michael C. Render
Has FTTH Had An Impact?
Economy
Quality of User Experience
New Technology
Has FTTH Become A Household Name?
Consumer Recognition
Have We Overcome Challenges?
Political
Funding
Has FTTH Deployment Grown? Will It Continue?
Greenfield Construction
Existing Overbuilds
“Has FTTH Had An Impact?”….
….Economy (Grade: A)
How would you best describe the
organization you work for?
Select one:
•
•
•
•
•
•
•
•
•
•
•
RBOC
ILEC
CLEC
MSO
Municipal government
State or regional government
Real Estate Developer/Integrator
End-user business
Consultant
Equipment vendor
Contractor
Billions In Home Based Business Impact
- Average revenue from home- based
businesses in FTTH homes is $59,780
FTTH Enhanced Home Based Business Reported
- Revenue for FTTH home-based
businesses is $46.7 Billion
- Revenue estimated to be related to
FTTH performance is $11.1 Billion *
* 11% said their business would not be possible
without FTTH, and 64% said it is more efficient
Billions In Traditional Economic Development/GDP Growth
Auburn IN
Cooper Tire Expansion
Kutztown PA
Film production companies
Bristol TN
Media General
LENOSIWSCO VA
Data Centers
Bristol VA
Northup Grumman
CGI
Mason County WA
Chelan County WA
Yahoo
Douglas County WA
Sabey Corporation
Morristown TN
Louisville Slugger
Sims
Technology companies
Online engineering firms
Colgate Palmolive
Grant County WA
MSN (Microsoft)
Ask Jeeves
Intuit
Powell WY
Alpine Access Virtual Call Center
Windom MN
Trucking companies
Independence OR
Metal fabrication companies
Billions In Environmental Savings
Days worked from home increased
1 day per month on average:
- 1 day per month average (Nearly 12%
work more from home directly because
of FTTH – an average of 9 days more)
Extra Days From Home Reported
- US Carbon Emissions reduced by .06%
(5.5% of citizens * 3% * 40%)
- FTTH also lowers energy use, road
maintenance, accidents, unproductive
hours…
“Has FTTH Had An Impact?”…
…Quality of User Experience (Grade: A+)
Much Higher Satisfaction With Internet Aspects
FTTH Versus Cable Modem
Reliability – service uptime
Broadband speed
Installation process
Consistency of speed
Provider’s customer service
12
Much Higher Satisfaction With Television Aspects
FTTH Versus Cable
76%
Quality of HD picture
48%
69%
Standard television
39%
65%
Number of HD channels
38%
FTTH
56%
VOD
0%
Cable
37%
20%
40%
60%
80%
100%
13
Much Higher Tested Download Performance
Median Mbps By Year
20
18
16
FTTH
Cable modem
DSL
16.6
14
12
12.2
10.8
10
8
7.0
6
4
6.9
5.2
2.9
2
1.5
0
2007
2008
2009
2010
Much Higher Tested Upload Performance
Median Mbps By Year
5
5
FTTH
Cable modem
4
DSL
4.5
4
3
3
2.4
2
1.8
2
1.4
1
1.0
0.5
1
0.7
0.4
0
2007
2008
2009
2010
Far Fewer Modem Reboots Reported Per Month
FTTH
DSL
FTTN
Cable modem
Wireless
16
Users Clearly Understand Key Advantages Of FTTH
Open End Responses
Speed/ faster/ better Internet/ bandwidth
Picture clarity/ video clarity
Reliability/ consistency/ no hassles
Bundle of several services on one bill
Cost
Fewer weather disruptions
Quality
Number of channels/ entertainment choice
Better customer service
General positives - pleased to have it
DVR
Convenience
Better than previous cable company
Video-on-demand/ movie downloads
No satellite dish
Better technology/ up-to-date
Lines are buried/ No overhead
Can run two computers at once
Easy installation
Other
17
“Has FTTH Had An Impact?”…
…New Technology (Grade: C)
Some Increased Use Of Advanced Internet Applications
Among FTTH Users Under Age 40 By Year
Shop online
Play single player games
Upload large files
Download or stream video to computer
Play multi player games
Upload video content to Internet
Use VOIP for audio
Use two-way video conferencing
Transfer files for remote offsite storage
Download or stream video to television set
Use remote software / “cloud computing”
Use remote monitoring camera video
Participate in a virtual world
19
There Is Interest In Futuristic Services
Current FTTH Users Under Age 40
Business video conferencing
Very large HDD with super resolution
Advanced websites/ full video
Remote home and pet monitoring
Online face-to-face healthcare
Advanced online shopping
One device for TV, Internet, & phone
Two-way video calling
Advanced online college
3D TV
20
There Is Interest In Futuristic Services
Current FTTH Users Age 55+
Online face-to-face healthcare
Very large HDD with super resolution
One device for TV, Internet, & phone
Advanced online shopping
Two-way video calling
Remote home and pet monitoring
Advanced websites/ full video
Business video conferencing
3D TV
Advanced online college
21
FTTH Upload Performance Will Become A
Competitive Advantage
Median Mbps By Year
5
5
FTTH
Cable modem
4
DSL
4.5
4
3
3
2.4
2
1.8
2
1.4
1
1.0
0.5
1
0.7
0.4
0
2007
2008
2009
2010
“Has FTTH Become A Household Name?”…
…Consumer Recognition (Grade: C)
General Public Awareness Of FTTH Is Still Low
By Year
2009
2010
24
Yet When Described, Users Understand The Importance
Of FTTH In New Home Development
Non FTTH Users:
Internet from a direct fiber optic line
Green space / walking, jogging
24 hour neighborhood patrol
Community pool / park
Fitness center / Clubhouse
Current FTTH Users:
Internet from a direct fiber optic line
Green space / walking, jogging
24 hour neighborhood patrol
Community pool / park
Fitness center / Clubhouse
25
“Have We Overcome Challenges?”…
…Political (Grade: A)
“Have We Overcome Challenges?”…
…Funding (Grade: B-)
Nearly $40 Billion In
Investment To Date
Total U.S. Telco & Cable Capital Expenditures Are Stable
2007
RBOC Wireline
Wireless(RBOC & Other)
MSO's
ILECs CLECs
Total
$25.23
$19.87
$12.00
$4.00
$61.10
Alternative source (total):
2008
2009
2010P
$25.41
$20.90
$11.40
$5.10
$62.81
$22.00
$21.40
$10.50
$3.90
$57.80
$19.40
$25.20
$11.00
$4.10
$59.70
Internal Reports
Inernal reports / Treflis
Skyline Marketing
Skyline Marketing
$61.60
$56.90
$57.70
Avian Securities
Total North American Telco & Cable Capital Expenditures Are Stable
2007
TOTAL US
TOTAL Canadian
TOTAL US & Canada
$61.10
$8.40
$69.50
2008
$62.81
$8.50
$71.31
2009
$57.80
$9.70
$67.50
2010P
$59.70
$9.00
$68.70
Combined RVA
IDC
But There Is Competition For Telecom Capex
Tested Download Performance Of Broadband
Wireline
Median Mbps By Year
Wireless
20
18
16
FTTH
Cable modem
DSL
16.6
14
12
12.2
10.8
10
8
7.0
6
4
6.9
5.2
2.9
2
1.5
0
2007
2008
2009
2010
DSL broadband speeds are falling far
behind the competition. Telcos are
starting to lose subscribers and need an
FTTH update. This is reaching severe
levels in some areas, such as eastern
Canada.
30
Smartphone penetration is expected to
increase from 15% to 70% in just three
years with the increasing use of higher
bandwidth applications. Some see this
as an impending crisis.
Other Investment Offers Opportunities
National public investment
Municipal public investment
Private investment
“Has FTTH Deployment Grown?”…
…Greenfield Construction (Grade: B-)
…Existing Overbuilds (Grade: A-)
FTTH Homes Passed Have Grown
Cumulative – North America
100 x Growth since 2001
FTTH Homes Connected Have Grown
Cumulative – North America
FTTH Penetration Has Grown
Cumulative – United States
20%
18%
16%
14%
Passed
Connected
12%
10%
8%
6%
4%
2%
0%
2
3
4
5
6
7
8
9
0
0
1
2
3
4
5
6
7
8
9
-0 r-0 p-0 r-0 p-0 r-0 p-0 r-0 p-0 r-0 p-0 r-0 p-0 r-0 p-0 r-0 p-0 r-1 p-1
p
Se Ma Se Ma Se Ma Se Ma Se Ma Se Ma Se Ma Se Ma Se Ma Se
But FTTH Penetration Is Not Uniform
Percent Of Households Connected
+
FTTH Internet Use Has Steadily Grown
Broadband Type Primarily Used At Home
USA By Year
50%
40%
43.6%
41.1%
39.7%
41.0%
44.0%
41.2%
40.4%
41.4%
39.7%
35.8%
30%
Cable modem
DSL
20%
Wireless
Other broadband
10%
11.9%
13.1%
13.4%
8.9%
FTTH
0%
11.9%
4.0%
3.0%
0.8%
1.8%
2006
2007
2.4%
3.4%
2008
4.8%
3.2%
2009
6.1%
3.3%
2010
There Has Been Some Short Term
Slowing Of Growth
FTTH Homes Passed
Annual Change – North America
4,500,000
4,170,628
4,000,000
3,500,000
3,454,876
3,000,000
2,716,967
2,500,000
2,283,624
2,000,000
1,500,000
1,000,000
500,000
9,874
109,190
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0
FTTH Homes Connected
Annual Change – North America
1,800,000
1,603,066
1,600,000
1,400,000
1,165,683
1,200,000
1,118,770
1,000,000
800,000
600,000
400,000
200,000
5,569
41,813
177,271
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Greenfield FTTH Homes Connected Will Increase
Annual – North America
700,000
643,967
600,000
500,000
481,945
400,000
359,856
300,000
280,133
200,000
100,000
2,000
12,852
55,646
164,252
140,622 149,853
109,582
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0
Greenfield Will Finally Take Off As Older Copper-Based
Developments Are Filled
Single Family Housing Starts
Annual – North America
2000-2004 (9 million lots developed, 2.5% FTTH)
2005 (2 million lots developed, 15% FTTH)
2,000
1,800
1,600
1,716
1,499
1,400 1,273
1,300
1,200
1,000
1,250
1,046
1,100
950
800
2006 (1.3 million lots developed, 37% FTTH)
2007 (.9 million lots developed, 50% FTTH)
2008 (.4 million lots developed, 55% FTTH)
2009 (.4 million lots developed, 60% FTTH)
2010 (.62 million lots developed, 62% FTTH)
2011 (.66 million lots developed, 64% FTTH)
200
2012 (.8 million lots developed , 66% FTTH)
2013 (.81 million lots developed, 69% FTTH)
2014 (.87 million lots developed, 70% FTTH)
0
2015 (1.2 million lots developed, 73% FTTH)
600
400
622
600
447
Likelihood Of Overbuilds Still Look Good In Many Sectors
Adding FTTH: Current Non RBOC FTTH Providers
10%
Very unlikely
Somewhat unlikely
6%
Somewhat likely
16%
65%
Very likely
All customers have FTTH 3%
0%
20%
40%
60%
80%
100%
43
Telecom Video Was An Early Driver
FTTH Video Homes Connected
Cumulative – North America
Broadband Line Loss Will Become A Driver
Net Broadband Adds 2009
MSO’s (Docsis2, Docsis 3)
Verizon (DSL, FTTH)
Other RBOC (DSL, FTTN)
Source: Leichtman Research
45
Broadband Line Loss Will Become A Driver
Net Broadband Adds First Half 2010
MSO’s (Docsis2, Docsis 3)
3.2%
1.3%
Verizon (DSL, FTTH)
Other RBOC (DSL, FTTN)
1.1%
0%
2%
4%
6%
8%
10%
Source: Leichtman Market Research
46
How many additional North American homes do
you expect to be passed by FTTH or FTTB in next
5 years (by the end of 2015)?
Select one:
• 3 million or less
• 6 million
• 9 million
• 12 million
• 15 million or more
North American FTTH Will Begin A New Mild Increase
- With More Explosive Growth Possible
Key:
Yellow – stable
Light green – moderate growth
Dark green – strong growth
Note: Much of the RBOC decline has already occurred.
REPORT CARD
Grading Period: Yrs
1-10
IMPACTS:
Economy
A
Quality of User Experience
A+
New Technology
C+
CONSUMER RECOGNITION:
C
GROWTH:
Greenfield
B-
Existing Overbuilds
A-
OVERCOMING CHALLENGES:
Politcal
A
Funding
B-
GRADE AVERAGE
B
11-20
21-30
Overall… The FTTH Picture Looks Positive!
Q&A
For a replay of this Webinar, and for
upcoming webinar events, don’t
forget to check out our municipal
broadband webinar site at
www.Muniwebinar.com
Broadband Properties Magazine
homepage: www.bbpmag.com
Also at Broadband Properties
Magazine: www.munibroadband.com
For the complete report of FTTH deployment in our October issue,
featuring Mike Render’s data:
www.bbpmag.com/2010mags/oct10/BBP_Oct10_FTTHMarketReport.pdf
Contact Mike Render at mrender@rvallc.com
Or visit www.RVALLC.com