& cplSiteName &

The Coming Fiber Construction Boom

Daniel Grossman

"Americans are frustrated with the slow pace of broadband deployment" is a sad cliché. According to FCC data for 2016 (the most recent available), 21% of census blocks -- home to 10% of the US population -- have no provider offering fixed broadband service at the Commission's 25/3 Mbits/s standard, and only 13% have three or more. The US is 18th among OECD countries in broadband penetration, and has the fourth highest prices. Meaningful competition is almost non-existent.

Fortunately, the stars are aligning for a growth spurt in broadband infrastructure. Unlike the past, the new infrastructure is being designed from the start to support multiple services, to spread capex and risk across product lines. US telecom providers look to support emerging services, meet growing mobile demand and struggle with competition from cable multiple system operators (MSOs), while dealing with aging copper networks. They have little choice but to spend their way out of these problems.

A new Heavy Reading Report, "US Converged Fiber Access Infrastructure: 2018-2021 Outlook," looks at drivers, trends and leading indicators behind an expected boost in new converged access network deployments over the next three years. The drivers include:

  • As MSOs deploy DOCSIS 3.1 throughout their footprints, telcos are faced with a hard choice: counter them with competitive offerings or abandon geographic markets. This includes business, enterprise and wholesale services, as well as residential and small business offerings.

  • MSOs are evolving their networks to fiber-deep architectures in support of DOCSIS 3.1 and other initiatives.

  • Copper networks are well past their sell-by date. Some are visibly decaying, and recent natural disasters have made matters worse. Aging leads to frequent network outages with expensive truck rolls. Since regulated plain old telephone service (POTS) is affected, telcos are under pressure to permanently fix or replace the copper infrastructure. Operators that retire copper plant in favor of fiber reap big opex savings.

  • Mobile operators are densifying portions of their 4G networks in response to explosive traffic growth and the price of obtaining additional spectrum. They need both more capacity and better coverage. The densification trend will explode with upcoming 5G deployments. All of this requires densely deployed fiber for back-, mid- and front-haul.

  • Internet of Things (IoT), smart cities and smart grid mean large numbers of connected devices. These, in turn, require ubiquitous fiber for backhaul.

  • The broadband divide has real consequences for rural communities and impoverished areas that lack adequate broadband service. In the absence of interest by incumbents, many communities are taking their fate into their own hands by building their own fiber networks.

Some of the obstacles that have held back fiber deployment are crumbling. The new FCC Republican majority blames excessive regulation for the broadband investment gap and have eliminated some sources of delay and obstruction. Tier 3, municipal enterprises, rural electric co-ops, public-private partnerships and non-incumbent commercial providers are obtaining better access to financing as their peers have demonstrated success and new business models have become mainstream. Local governments have growing incentives to cooperate with service providers in permitting infrastructure.

Against that background, the trends point to strong growth in new converged fiber deployments over the 2018-2021 timeframe. The roughly 15% growth that started in 2016-2017 will likely accelerate. With 5G deployments starting as early as mid-2018, and rollouts in 2020, the industry will have to place a lot of fiber. Most telling, announcements by operators and their key partners lay out aggressive deployment plans.

The next few years' investments might not completely close the broadband divide, but will be a big step in the right direction.

— Dan Grossman, Contributing Analyst, Heavy Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Light Beer
1/11/2018 | 12:16:59 AM
I have to agree - I travel a lot to the US and internet connectivity is poor at best in most areas. In the Caribbean where Digicel operate you can now get 1Gbps in many areas and in my home country of Ireland SIRO, eir and e-net are deploying fibre at a blistering pace. The FCC data is frightening and will impact US economic performance, competiviness and productivity. It does not need to be 100% fiber either, advanced wireless and fiber will also deliver what is needed. Copper has had its day, it's time to move on.
User Rank: Light Sabre
1/10/2018 | 3:05:08 PM
Agree and Disagree

I think there will be an ongoing trend for greater fiber buildout for business customers and mobile services.  I think the larger telcos have given up on residential buildouts and plan to compete for consumer dollars with wireless services.  This in turn will reduce the competition from cable thus slowing their buildout.  

The thing to me is really 5G.  I know of a number of folks that think that they are going to put cell sites very densely and backhaul via fiber.  Given that this means that there might be a few cell sites per block in urban centers (with fiber to each company's sites), that we might see a boom in city street renewal.


More Blogs from Heavy Lifting Analyst Notes
The use of artificial intelligence by telcos is currently limited, but the Acumos AI Project looks set to make machine learning applications more easily created and readily available.
Cable is moving in on the wireless market, with many exciting opportunities opening up across the board, including in WiFi, mobile virtual network operator (MVNO) and 5G.
On July 27, Nick Read will become Vodafone Group CEO designate before assuming the role of Group CEO on October 1. What can we expect from the operator's current CFO once he's in the hot seat?
More than half the communications services providers surveyed for this report expect to have 5G backhaul ready by 2020, even though they still do not know which vendors they plan to use for this step.
Mobile operators may find that all their investments in VoLTE and RCS are for naught as OTT providers win and they are left monetizing the data pipe.
Featured Video
From The Founder
John Chambers is still as passionate about business and innovation as he ever was at Cisco, finds Steve Saunders.
Flash Poll
Upcoming Live Events
September 12, 2018, Los Angeles, CA
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 6, 2018, London, United Kingdom
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
Telecom Jargonosaurus Part 1: Repeat Offenders
Iain Morris, News Editor, 7/13/2018
AT&T's Stankey Serves Up a Stinker at HBO
Iain Morris, News Editor, 7/10/2018
Broadcom Buys CA – Huh?
Mitch Wagner, Executive Editor, Light Reading, 7/11/2018
Verizon Taps Malady as Acting CTO
Dan Jones, Mobile Editor, 7/12/2018
FCC's Rosenworcel: US 'Falling Behind' on 5G
Iain Morris, News Editor, 7/13/2018
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed