December 2014, Vol. 69, No. 12
Editor's Log
America’s Fiber Habit
Recent research and anecdotal evidences leaves little doubt that the United States’ fiber-to-the-home appetite continues to be ravenous.
While there are some hiccups, the thriving fiber market has been great news for telecommunications contractors.
Mike Render, principal of the well-respected research firm RVA, is commissioned annually by the Fiber-To-The-Home (FTTH) Council to evaluate the progress of fiber expansion along with a gleaming a plethora of other insightful data that aids the market in plotting its path forward.
RVA’s latest study revealed that 10.4 million homes are now connected to fiber, an increase of 6.7 percent in one year. And that is in a housing market that is still struggling in many parts of the country.
But the fiber wave is much more than just supplying broadband to homes. Indeed, a more accurate reflection of the true market demand would be fiber-to-the-premises as virtually the entire country’s business network is moving to fiber as well. Even the wireless market is craving a new fiber infrastructure to support their enormous requirements for more broadband space.
The report also revealed that the number of homes passed by fiber has climbed to 32 million, a 16.9 percent increase in one year. What makes that number even more impressive is that the “take rate” (owners that actually agree to be connected to fiber when available to their home) has reached 40 percent. It was just a few years ago that take rates of 20 percent were considered very high.
Fiber is rapidly becoming the new normal for home buyers. For example, the Texas housing market is very strong and master-planned subdivisions dominate new home build-outs. Developers have long-since realized that potential home buyers fully expect fiber to be available. New subdivisions that have not installed fiber throughout the housing plots – even those in rural areas – find themselves at a tremendous disadvantage. Smart Homes have become standard in many areas, made possible by fiber. The need for speed, especially by broadband users under 35, continues to grow with internet use. This age group, commonly referred to as digital natives, receive more than half of their video content online. Moving into a new house without fiber – anywhere in the country – simply won’t happen for them.
Another interesting point from the survey was that there are now 58 service providers (and growing) offering gigabit-per-second internet packages. The FTTH Council has been lobbying for a 100 megabit standard. It may be that the council will have to reevaluate and modify their position to reflect the insatiable craving of the American public for more broadband.
Of course, some well-established providers are lagging behind. For example, AT&T has only recently started aggressively constructing fiber-to-the-premises programs but trails Verizon and many other small service providers. AT&T is hustling to upgrade its much ballyhooed U-Verse internet service to higher speeds as competitors are now offering speeds vastly greater – and at economical rates – to AT&T’s current best options. AT&T almost waited too late to react as broadband speeds whizzed by their U-Verse capacities and business plans.
Another example of America’s need for more broadband is the renewal of long haul fiber construction. Since the fiber bust at the turn of the century, long-haul projects have been few and far in between. That’s changing. For example, just in the Gulf Coast area, there are two projects representing 21,000 miles of fiber networks under construction.
As the use of broadband for mobile devices expands at an almost geometric rate, a boom in fiber-to-the-tower work has emerged for the wireless market. Estimates for mobile data growth are overwhelming – as much as 650 percent over the next three years.
Or course, many contractors claim clients are trying to squeeze profit out of bids. That kind of practice always tends to backfire. As the overall fiber market continues to heat up, the availability of a finite number of quality contractors tends to become constricted. When contractors can pick and choose what jobs they bid on, owners see prices climb.
Regardless, however you spin the fiber industry, it continues to grow and evolve, often in unpredictable and unexpected ways. And we’re still just midway through this wild ride.
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