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Video will drive FTTH growth in 2011, says ABI Research

Posted: 06 Dec 2006 ?? ?Print Version ?Bookmark and Share

Keywords:ABI Research? FTTH? video?

By 2011, 55 percent of the world's homes that will make their broadband connection over fiber-to-the-home (FTTH) will receive video services, according to ABI Research's report PON and Active Ethernet FTTH Deployments.This figure is up from the 4 percent in 2005.

Driving the growth will be a business model argument for operators. Installing video equipment, though not insignificant in terms of cost, is a relatively small addition to the basic cost of installing FTTH access equipment.

Explains Michael Arden, ABI Research principal analyst, "Companies are going to considerable expense to deploy FTTH. Spending a little more to establish a video network helps them to pay off the access network investment. That is why wherever you see a FTTH deployment today, the service providers are talking about offering triple-play services."

However, the growth will differ across regions. In Asia, some governments issue regulations that are limiting FTTH market growth.

For example, Japan and South Korea, which are ranked the highest in FTTH deployment, have regulations that restrict the addition of most TV services. In an effort to protect the market positions of cable and satellite operators, their regulatory regimes prevent operators from offering TV except in the limited form of video-on-demand. The research firm also noted that China is a great potential market for FTTH, but its government is limiting the licenses it is issuing to telecom operators.

Meanwhile, Arden noted that there will be higher video-over-fiber take-rates rates in regions such as North America and Western Europe, particularly Scandinavia, where the regulatory climate is more favorable. In the United States, ABI Research noted, the only stumbling blocks for a company are the franchise agreements required to offer video services.

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