FttH just around the corner: Budde

Fibre-to-the-home (FttH) technology is nearing a critical stage of its commercial development, according to veteran telecommunications analyst Paul Budde, as he predicts rollouts will reach parity with copper, DSL and DLC networks this year.Budde says although FttH projects have been variously trialled since the 1980s, the technology will reach a later stage of development this year, with US telcos leading the race.

Fibre-to-the-home (FttH) technology is nearing a critical stage of its commercial development, according to veteran telecommunications analyst Paul Budde, as he predicts rollouts will reach parity with copper, DSL and DLC networks this year.

Budde says although FttH projects have been variously trialled since the 1980s, the technology will reach a later stage of development this year, with US telcos leading the race.

"The usual suspects, Japan, Korea and Scandinavia, are at the forefront of developments in the FttH market. However, it is the commitment made by the US telcos in 2003 that will make the real difference," said Budde.

According to Budde, the US has assigned US$75 billion to roll out fibre, with wireless communications provider Verizon leading the expansion.

"Vendors are now coming up with better prices and this will make these roll-outs more economically viable... but the main drivers will be, not the incumbents, but local government and utilities," said Budde.

Telcos should act now to keep up with the market and customers, said Budde. However, he warns that an FttH investment may only be suited to larger players.

"FttH will involve a great deal of cost upfront, with no prospect of a quick return. This scenario is well-suited to utility players but not to alternative service providers, who need a much faster return on their investments," he said.

Budde says that all content and service vendors should have equal access to a national FttH infrastructure to maintain high levels of competition.

"It is interesting to note that, in Australia, the utilities already operate largely on an open network concept. This is not yet the case in countries with entrenched utilities-based telecoms infrastructure and it will be interesting to see how this situation develops," said Budde.

Initially utility companies will dominate the usage of FttH, according to Budde, as he says telecommunication companies will continue to make the most of the old networks.

"The incumbents are too committed to protecting their sunken assets and will try to milk them for as long as possible. In most situations the incumbent national operators are paying 'lip service' to FTTH, investing only in dribs and drabs," said Budde.