European telephony operators thrust fiber closer to users

European telephony operators thrust fiber closer to users

Adele Hars

European Correspondent

With the prospect of liberalized telecommunications services expected soon, European network operators are exploring the extension of fiber-optic cable deeper into the local loop as a means of increasing their competitive edge.

Because fiber is installed throughout most European trunk and distribution networks, the next logical progressive step is the local access network.

However, according to Peter Aknai, senior consultant at Analysys, major regulatory barriers prevent telephone companies and third-party providers from making the necessary investments. Analysys recently completed a report for the European Commission that included recommendations for increasing competition in the local loop.

In Eastern Europe, where massive infrastructure improvements are desperately needed, fiber is considered a cost-effective solution. According to Jeremy Ledger, Dataquest`s European telephone company analyst for local loop and broadband, fiber is generally perceived as justifiable in open field sites, but there are virtually no more open field sites left in Western Europe. Where fiber is deployed, it often serves the needs of businesses, he explains. Ledger also notes that the move is on to deploy fiber in the primary access network. "It is not a case of should or should not use fiber," he concludes. "The question is how much fiber."

Gunnar Lilajegren, product manager for access network systems at Ericsson Telecom, concurs. He sees telephony as one of the main drivers of fiber deployment. "When you make an investment in the access network," he says, "you look 30 years into the future."

German opportunity

One of Europe`s biggest projects is Deutsche Telekom`s Optical Access Line project, which is deploying fiber throughout the former East German states in an effort to upgrade basic telephony.

The Opal `93 project provided optical fiber lines for 200,000 households. The more ambitious Opal `94 project accommodated 500,000 households. Similarly, the Opal `95 project is targeting another 500,000 households and focusing on the former West German states.

The U.K. example

The United Kingdom telecommunications industry is often cited by analysts as an example of the positive effects of liberalization. For example, British Telecom is competing with Mercury and other telephone companies, as well as cable-TV companies, that have the right to offer telephony.

British Telecom, which has 300,000 kilometers of fiber in the access network, is emphasizing fiber deployment to businesses. However, a company spokesperson says British Telecom will not run fiber to the home because it is prohibited from offering content services.

Mercury, which has a 7000-km fiber trunk, is also running fiber to small businesses. The company has decreased the minimum number of lines from 15 to one for businesses in buildings that it already serves.

Energis, a new company that is owned by the National Grid Co., has launched telecommunications services over the same 3500 kilometers of fiber-optic cable that it ran over the electricity infrastructure and through the London Underground tunnels.

France debates the future

Fiber has been the subject of much debate in France, ever since the release of a report to the government by Gerard Thery, former chief of France Telecom. He called for a 150 billion franc to 200 billion franc (U.S. $30 billion to $40 billion) infrastructure during the next 20 years, the brunt of which he says should be borne by France Telecom.

France Telecom, which is in the process of doubling the amount of fiber in its networks (already considered one of the most advanced in Europe), on the other hand, believes a more pragmatic approach is needed--one that it contends makes more business sense. However, the debate is more or less on hold until after the spring presidential elections.

Denmark looks to the East

Telecom Denmark has turned eastward in the quest for new business. The country is geographically well-positioned to assume a network-gateway role.

Last April, the company inaugurated the first fiber-optic submarine cable system connection to Russia. The 1210-km cable is buried in the Baltic Sea, stretching from the Koege Bay south of Copenhagen to Kingisepp in Russia, which is near the Estonian border. The system can handle 15,360 simultaneous telephone calls, and is extended by radio links to St. Petersburg and Moscow.

Telecom Denmark is working with Intertelecom (the Russian long-distance and international telephone company) and other telephone companies to establish a fiber network linking Russia, Japan and South Korea. This system is scheduled to be operational early this year and have a 22,000-call capacity.

The Danish telephone company is also working with Polish Telecom and other partners on a submarine cable linking northern and southern Poland. In 1991, Telecom Denmark and partners linked Poland and Denmark. The new cable will be digitally linked with a submarine cable system built in 1992 off the coast of Lithuania by the Danish partners.

Russia: The next frontier

Deutsche Telekom, France Telecom and U.S. West International have turned their attention to what is perhaps the biggest open field site of all: Russia. The three carriers signed a memorandum of understanding with two major Russian telephone companies: the Russian Overlay Network and Rostelcom. The five companies have agreed in principle to form a company that will construct long-distance, fiber-optic communications links and switches across Russia.

The project is known as 50X50, for the proposed installation in 50 cities of 50,000 kilometers of fiber-optic cable and digital switches. Financing, scheduling and methodology are yet to be determined, although current estimates put the required investment at $40 billion. The project is expected to double the number of telephone lines in Russia, adding 20 million new lines during the next 10 years.

Ulrich Lissek, a Deutsche Telekom spokesperson, says that because there is little or no fiber-optic cable in the Russian network, 50X50 represents a big step forward in creating the infrastructure necessary to build the economy.

Westbalt Telecom, a joint Franco-Russian venture, is modernizing, expanding and operating the local and long-distance telecommunications network in the Kaliningrad region of Russia. Four remote subscriber connection switches, each with a capacity of 2000 lines, have been installed. In addition, fiber-optic cables connect the main and remote switches, as well as the central switch and remote networks.

The first phase, completed last year, enabled the connection of 10,800 subscriber access lines. The second phase calls for the installation of 18,000 lines this year. By the year 2004, at a total expense of $40 million, the Kaliningrad region is expected to have a global capacity of 200,000 lines and fully digitized switching and transmission over fiber-optic networks.

Adele Hars writes from Paris.

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