News on the 13th (Ace) The latest report from market research company Omida shows that some British and American households are benefiting from FTTP broadband services provided by small operators (rather than established telecom operators or cable TV operators). Many of these small operators are private companies, and these companies are not under pressure to disclose quarterly earnings. They are expanding their Optical Distribution Networks and rely on some suppliers for PON equipment.
Smaller operators have their advantages
There are many non-established operators in the United Kingdom and the United States, including the United Kingdom’s AltNets (such as CityFibre and Hyperoptic), and the United States’ WISP and rural power utility companies. According to INCA, the British Independent Network Cooperation Association, more than 10 billion US dollars of private funds have flowed into AltNets in the UK, and billions of dollars are planned to flow in. In the United States, many WISPs are expanding to FTTP due to spectrum constraints and continuous growth in broadband demand. There are many operators in the United States that focus on regional and urban optical fibers. For example, Brigham.net, LUS Fiber and Yomura Fiber are providing 10G services to American homes.
Private power-Many of these small operators are private companies that are not in public view in terms of quarterly reports on user goals and profitability. Although they are also working hard to achieve the return on investment targets for investors, these goals are long-term, and the optical distribution network itself is usually regarded as a valuable asset, similar to the mentality of grabbing land.
The power of selection-non-veteran operators can more easily select cities, communities and even buildings to build fiber optic networks. Omdia emphasized this strategy through Google Fiber, and this strategy is continuing to be implemented among AltNets in the UK and small US operators. Their focus can be on underserved residents who may have a higher ARPU.
There is almost no nightmare of integration-many smaller fiber-based operators are new entrants to broadband access, so they do not have the nightmare of integrating OSS/BSS with older copper-based or coaxial cable-based technologies . Many small operators choose only one supplier to provide PON equipment, thereby eliminating the need for supplier interoperability.
Small operators are affecting the ecosystem
Julie Kunstler, senior principal analyst of Omdia broadband access, said that incumbent operators have noticed these smaller optical access network operators, but large telecom operators have been focusing on the deployment of 5G wireless networks. In the US market, large cable TV operators have begun to get involved in FTTP, but the pace is very slow. Moreover, incumbent operators can easily ignore the number of FTTP users below 1 million, because these users are irrelevant in terms of investor review.
However, even if telecom operators and cable TV operators have their own FTTP service products, it will be difficult to win back these types of users. From the user’s point of view, why change from one fiber service to another, unless it is due to poor service quality or obvious price concessions. We can imagine the integration between many AltNets in the UK, and they may even be acquired by Openreach. In the United States, large cable television operators may acquire small operators, but there may be overlaps in regional coverage-even though it is through a coaxial cable network, this may be difficult to justify to investors.
For suppliers, these smaller operators usually require different solutions and support services than incumbent operators. First, they want a network that is easy to expand, upgrade, and operate because their team is very streamlined; they don’t have a large network operation team. AltNets is looking for solutions that support seamless wholesale to a wide range of retail operators. Small US operators are supporting residential and commercial services on the same optical distribution network without having to deal with the challenges of multi-sector coordination. Some suppliers have taken advantage of the new FTTP craze and have established sales and support teams focused on meeting the needs of these small operators.
【Note: Omdia is formed by the merger of Informa Tech’s research departments (Ovum, Heavy Reading, and Tractica) with the acquired IHS Markit technical research department. It is a world-leading technology research organization. 】
Post time: Jul-16-2021