by Kurt Ruderman
FTTH announcements by France Telecom and Free Telecom last year have raised hopes among European cable makers that other incumbents and alternative carriers will follow with large-scale deployments.
But European vendors do not expect any other big deployment announcements before the European Commission establishes a clear regulatory framework regarding new fibre infrastructure. The commission is scheduled to address the question this year. France Telecom and other incumbents have said they will slow or stop investments in new fibre access networks absent a clear set of regulations.
“The regulatory uncertainty is slowing growth,” says Jacques Jaillet of Acome, a French fibre and cable maker. “It has kept the fibre-optic cable market growth rate at 10%-for the past couple years.”
Thus, municipalities and utilities continue to drive the European FTTH cable market. The number of projects and players has increased over the last few years, notably in Denmark, the Netherlands, Sweden, and France. But the projects, even the biggest, pass thousands of homes, not millions like those of Free and France Telecom.
“Our market is better since 2005,” says Richard Thomas of Prysmian. “But it will take more than a few municipal projects for the market to take off. Real FTTH will start when we start sending out containers instead of just drums of cables.”
Until that time, optical cable providers must content themselves with the smaller municipal and utility projects. Winning such customers requires understanding their business plans and strategies, which vary across Europe. Cost, however, is very important in all markets. Customers want cabling systems that lower capex and opex and enable incremental network growth.
Cable makers have responded with new lines of compact cables. Some have embraced micro cables and micro ducts that can be blown using jets of air into new and existing conduits. Micro cable is becoming widely used in France and southern Europe. Acome’s Jaillet estimates that micro cable will account for 30% of fibre-optic sales in 2010, compared to 10% today.
The new ducts and cables lower costs in several ways. For example, using micro ducts reduces the number of splices during installation, the suppliers say. With most micro-duct systems, workers install bundles of micro ducts in conduits and pull out dedicated ducts at enclosures or cabinets along streets. From these termination points, network owners blow in cable and fibre only as they add customers.
Some of the biggest projects using this technology are in Sweden, where housing corporations use micro ducts to blow cable and fibre to connect tenants. In Stockholm, housing corporations will connect more than 100,000 apartments over the next 4 years.
Stokab, Stockholm’s city-owned network company, illustrates the trend. Metro and access network competition from Telia, the Swedish incumbent, helped drive Stokab’s new ‘open access net’ strategy. The new network design cuts construction costs and eliminates the need to dig up streets and sidewalks to connect buildings one by one. Stokab installs a fibre-optic cable from its metro network into the basement of a designated city block building, where it terminates all the fibres from the street. From this node, called ‘The Block Node’, Stokab then installs a multiduct system through all the basements of the block to form a ring. Each building has a ‘delivery point’ from which Stokab can bidirectionally branch a micro duct from the multiduct ring. When the building owner wants to be connected to a broadband operator, a fibre unit is blown in. Stokab has so far connected 10 city blocks in central Stockholm this way; each block normally has about 250 apartments. Stokab plans to connect about 100 more blocks in 2007-2008.
Denmark is another important market for blown fibre and cable. One of Ericsson’s biggest customers is Dong Energi in the Copenhagen area, which is installing micro ducts to connect homes. Dong has passed 90,000 houses.
Municipalities and private companies are also using blown fibre and cable in metro networks, says Peter Lo Curzio of Ericsson. For metro networks, Ericsson sells fibre cable with fibre counts ranging from 8 to 96, and blown fibre with bundles of eight fibres or less, for connecting houses and apartments.
The use of micro ducts has also spread to the Netherlands, a densely populated country where every millimetre counts. “The trend is toward smaller micro ducts to cut costs and to save space in buildings and in streets,” says Paul Naastepad, managing director, Europe Emtelle. Since 2004, Emtelle has been using 3-mm ducts for FTTH projects. Emtelle’s first project with 3-mm ducts was in Nuenen (the Netherlands), where a local cooperative owns and operates the FTTH network. The project connected 7,500 houses. “The smaller tubing size reduced cost by 25% to 30%,” Naastepad says.
Emtelle blows two to four fibres into a 3-mm duct. In Nuenen, Emtelle connects each subscriber with two fibres. But in Scandinavia, where there are often multiple operators, Emtelle connects houses with four fibres.
Most of the municipal network builders add subscribers incrementally, which creates a demand for preconnectorised products that allow nonskilled employees to connect subscribers in houses and apartment buildings as they decide to buy FTTH service. This eliminates the need for multiple truck rolls, which is very important in large-scale private and municipal FTTH projects involving large apartment buildings or multifamily units.
Prysmian recently launched its QUICKDRAW line, which is similar to the preconnectorised system that Corning is supplying to Verizon for its FTTH project. QUICKDRAW uses standard SC and ST connectors. The current version is for buried enclosure. Prysmian is considering a version for aerial cable.
Most European municipalities and utilities are building ‘open access’ networks. The notion of open access is not the same in every country. The different models create different mixes of cable and equipment customers with a wide range of needs.
In France, for example, many municipalities build fibre networks and lease dark and lit fibre to communications companies. In Paris, the city’s transportation company, RATP, has a subsidiary called Telcité that operates a carrier’s carrier fibre-optic network installed in metro tunnels and other RATP rights-of-way. Many alternative operators lease fibre capacity from Telcité and also install their own fibre in the city’s sewer system, which can be used to connect all the buildings in Paris. The city leases sewer rights-of-way to communications companies. Free Telecom is using the sewer system to build its FTTH network. The alternative carrier has said it will lease fibre to other operators.
In Sweden, city-run network operators like Stokab are considered utilities. They lease fibre to communications companies. They and the incumbents are the only companies allowed to install fibre networks. Hence, they are the main cable customers. Service providers, in most cases, are free to choose their network transmission equipment and vendors. They can also sign contracts with apartment building corporations. B2, one of Sweden’s largest broadband providers, has until now installed its own equipment in apartment buildings, where it usually has exclusive service agreement.
Another model has been gaining popularity over the past few years in many Swedish and Dutch cities. In these cities, municipal governments are building citywide fibre networks and signing agreements with companies to light and operate them. Amsterdam is using this model for its citywide FTTH project, which will connect 450,000 households. BBNed, the Amsterdam network operator, selects and installs all the active equipment in the network and in the subscribers’ apartments. Network customers use BBNed’s Ethernet broadband connection to access service providers. With this model, there is no unbundling and no network infrastructure sharing. Competition takes place only at the service and content provider level.
These nontraditional communications companies entering the market have created a demand for turnkey cable contracts. “This is a new trend,” says Albert Grooten of Draka. “New players such as munis do not have a technology background. They need full turnkey solutions. Free also relies heavily on vendors for design. We work with them using software to design the networks.”
In its core network, Free is using a more than 720-fibre cable developed by Draka for the core network in the sewer. The design allows Free to tap the cable and pull out fibres at distribution nodes around Paris.
In Amsterdam, Draka installs the city’s network below sidewalks in a 60-cm trench, a half-metre from buildings. Apartment buildings are connected with cable that is terminated in the basement. From the basement, cable is blown to apartments.
Cable makers that are competing with similar cable product lines have realised that it takes more than demos at trade shows to win customers. Acome and other companies have begun offering training courses. In 2006, Acome opened one of Europe’s first broadband cabling demo and training centres. The facility, called the Centre d’Expertise du très débit, is located near the company’s cable factory in Normandy. The centre, which looks a bit like a theme park, offers working models of fibre-based high-speed broadband architectures. Acome offers one- to three-day programs with tailored instruction for installers and people evaluating different broadband access technologies.
France Telecom and Free will be fighting it out for control of apartment buildings as they roll out their FTTH networks in 2007.
France, like many European countries, has subsidised low-income housing. But unlike the Netherlands and Scandinavia, where FTTH construction has taken off, France does not have large housing corporations renting to higher income brackets. Most middle to upscale French apartment buildings are condominiums-they belong to the apartment owners. Network builders entering most French apartment buildings will require agreements with the ‘syndics’, the companies that manage apartment buildings. An action by a syndic, such as granting building access to a network installer, requires the approval of the apartment owners. France Telecom says it has signed agreements with 650 syndics.
It is not very likely that the syndics will let more than one company cable a building. Winning their approval will depend on convincing apartment owners regarding the need for FTTH and proposing cabling systems that use the least amount of space and cause the least amount of damage to their buildings.
Last September, Free said it would make its fibre infrastructure available to competitors. So, France Telecom-which, as of press time, has not yet named the cable suppliers for its next round of FTTH deployments-was returning the ball when it offered to open its FTTH networks to competitors. The question now is will they continue to fight it out or swap fibre and compete on the service level?