Fiber to the home or HFC?
November 17, 2016
FTTx (Fiber To The X) – FTTH (Home), FTTB (Basement), FTTC (Curb), FTTN (Node), FTTM (Mars!). You name it we have a Fiber To The flavor.
Believe it or not… Fiber is in everyone’s network. In Telcos, MSOs, Google Fiber’s network and so on. So why the hype about Fiber To The Home? The quibble is about how far the fiber is deployed to you as a customer. I am not going to talk about this too deep – but refer to Rajesh’s guide to Fiber Deep (How deep is Fiber Deep?) for details. So what differentiates FTTx from FTTy? It is the last segment of the electrical medium.
HFC (Hybrid Fiber Coax), what cable operators has been deploying also has fiber – but not to the home. A node is used to convert the optical signals to the electrical signals (Refer to FTTH vs HFC insert). There you go you do not have that new fad – the fiber, coming to your home in HFC networks. The question is, other than the bragging rights to the customer what is fiber giving that coax is not providing?
|Criteria||Fiber To The Home||HFC|
|Bandwidth per Sub||Higher||Medium|
|Quality of Experience||Good||Good|
|Integrated Next Gen Services||Can be offered|
(*) Note that many inter related factors to be considered for these simple comparisons
Note also that these criteria are considered from incumbent providers point of view
Bandwidth per Sub: A common sense discussion – come on – fiber provides higher bandwidth than copper. We can slice it and dice it however we want it. Now the better comparison is what is the cost of providing comparable bandwidth offering in both the deployments. It depends on what you have in the network now and what your subscriber wants.
Quality of Experience: There are many claims that fiber provides better QOE. Now if I put myself a typical customer’s flip flops – my QOE rating is based on how better my internet connection to my home (bandwidth-wise) is and how better my video service offering is from my provider. If an operator is determined to mess it up – it is on them. Nothing to do with Fiber or HFC.
Integrated Next Gen Services: Nothing stops an integrated (IP-based) solutions to be implemented on FTTH or HFC networks. The only difference is the incumbency of the operator. How much of the operators network is deployed based on the three one-play networks versus how urgently do they need to upgrade to compete against what integrated service offering from the competition. This is nothing to do with the Fiber or Coax to the home. There are MSOs who are offering integrated triple play solution on HFC networks and there are Telcos who are offering video on a separate striped network over the same Fiber. So the question here is not what we can do on FTTH or on HFC but what the service providers product folks want.
Upgrade Costs: Now here is a topic that needs attention. For some reason (motivations are not discussed in this blog) the operator wants to upgrade to FTTH, the upgrade costs from current state to fiber all the way to the home (the so called last mile or last few hundreds of feet) can be very expense. One need to upgrade the headend equipment, in home equipment, lay fiber to the remaining part of the network to the home, upgrade the back office equipment and not to say come up with a differentiating product offering (and hence the product, marketing, new service assurance and fulfilment expenses). So why would anybody want to take this drastic step of upgrading? It all comes back to you as a consumer. Your voracious appetite for bandwidth is increasing at alarming rate (Refer to the future article – How big is a Gig?). The operators have to upgrade their network to meet your bandwidth needs – the first point “The Bandwidth Per Sub”. So the question is what is the NPV of upgrading now to FTTH or eventually at a later time?
In summary, the scale of FTTH vs HFC is balanced on two things – what does the customer want (mind you – may not be the need here) and what is the capability of the network the operator have. Then turn this into a time series question for the next ten to fifteen years. Based on the crystal ball of predictions on what a customer wants along with what the network is capable of doing – come up with a time series of investments and calculate the NPV and that gives you the answer. Sounds very complicated right….. Welcome to the party. That is why we are here.