Numbers for bubbleheads
Those of you who insist that the optical communications market won't recover until it returns to the triple-digit growth percentages of the bubble may be interested in the latest numbers from the fiber-to-the-home (FTTH) community. According to a recent study conducted by the research firm Render, Vanderslice & Associates (Tulsa, OK), the number of homes passed by FTTH networks in the United States and Canada will reach 72,100 this year, an increase of 271%. If that's not heady enough for you, next year that figure is expected to climb another 330% to 315,000 homes. More than one million homes will have access to FTTH infrastructure by 2004, the study predicts.
While that is clearly good news, bubbleheads shouldn't get too excited. One million homes is a miniscule portion of the total market, which Mike Render of Render, Vanderslice put at 105 million households this year.
What interests me more than these numbers is the roster of companies installing such networks. Much of the publicity surrounding current FTTH deployments has focused on high-end real estate developers looking to provide the ultimate in telecommunications luxury to the wealthy home buyers they're hoping to attract. However, a growing number of FTTH converts comprise independent telephone companies and municipalities that plan to use the multiservice capabilities of fiber to one-up the local incumbent carrier (in the case of the former) or improve the quality of their tax base (in the case of the latter), particularly if the fiber infrastructure extends to businesses as well as homes.
Independent operating companies particularly appear to be having significant success with FTTH infrastructure. Generally, Internet-service take rates on FTTH is 21%, according to the Render, Vanderslice study, which compares favorably to a DSL and cable-modem take rate of 14%. However, some independent operating companies—which in rural markets frequently are the local cable TV company and Internet service provider as well as a purveyor of dial tone—have enjoyed as much as a 90% take rate on combined services in some communities, thanks to FTTH.
Yet, as far as the U.S. is concerned, the technology will remain stuck in niche applications until the RBOCs make FTTH a priority. So far, they have done little beyond dabbling in field trials. But Render expects signs of heightening interest by next year and serious deployments following in 2004. Besides possibly settling the battle between ATM versus Ethernet for passive optical networks, the entrance of the RBOCs on FTTH customer lists will give the bubbleheads something to get truly excited about.
Stephen M. Hardy
and Associate Publisher