A new report from Analysys Mason argues that telcos considering fiber to the home should instead take a conservative approach and explore technologies allowing them to nurse last-mile copper (aka VDSL2) instead. According to the firm, the business case to move beyond fiber to the home trials “just isn’t there” (something that should surprise Verizon, who invested $24 billion in the technology). The firm argues the need for FTTH bandwidth won’t take off until more bandwidth-intensive services are developed:”FTTH is often said to be ‘future-proof’, but the future appears to have veered off in a different direction,” says Rupert Wood, Principal Analyst at Analysys Mason and author of the report. “The vague promise of future services may appeal to some early FTTH adopters, but will become increasingly ineffective as a selling point unless the rate of innovation in devices and services that are uniquely suitable for FTTH gets some new impetus from vendors and service providers.Of course milking copper instead of upgrading to fiber pleases investors, who don’t like to wait for the returns on their investments. There’s a number of reasons to invest in FTTH, but the firm brushes them aside. What about cable operators offering better speed via DOCSIS 3.0 and creating the idea the telco offers inferior product? Analysys Mason says DOCSIS 3.0 adoption is “troubling low.” What about last-mile copper capacity crunch due to Internet video? Again, no worries, says the firm, since any problem on that front is “still a long way off.”
The problem with this thought process is that it remains focused on the short term gains for investors at the cost of a company’s health. A phone company nursing last-generation copper simply cannot compete with upgraded cable networks. A phone company that shifts to distance-constrained VDSL equally faces competitive shortcomings, especially on the upstream side of the equation, and especially as cable operators perfect upstream DOCSIS 3.0 channel bonding.
So while Analysys Mason frames nursing copper as the reasonable solution, they’re doing so from the myopic investor perspective, which frequently has neither the consumer or the company’s long term health in mind. Phone companies that decide to not pay begin upgrading to last mile fiber now will wind up simply paying later, and potentially in more ways than one.
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