Deloitte Consulting LLP has issued a report that suggests the U.S. needs significantly more fiber-optic infrastructure over the next five to seven years to support upcoming 5G wireless as well as broadband competition and rural broadband coverage. The report puts the price tag of such a fiber cable deployment at between $130 billion and $150 billion, but notes that the market currently lacks sufficient incentives for such an investment.
Deloitte predicts that without significant deployments of fiber-optic cable infrastructure, service providers will be unable to accommodate the 4X increase in mobile data traffic expected between 2016 and 2021. Meanwhile, a lack of fiber-optic access networks has hindered high-speed service deployment and consumer choice. The report states that while wireline broadband networks carry as much as 90% of all internet traffic regardless of the end-user access device, only 38% of homes have a choice of at least two providers who offer at least 25-Mbps services. Rural subscribers are in even worse shape. Only 61% have access to 25-Mbps wireline broadband from any service provider; those who do might pay as much as 3X more than suburban customers, according to Deloitte.
However, service providers increasingly are investing in satellite TV, advertising, content, and advanced business services instead of fiber-optic networks, the report charges. Meanwhile, infrastructure funds and real estate investment trusts aren't picking up the slack.
Deloitte calls for regulatory reform as well as new access network monetization and financing strategies to improve the business model for fiber investment. These latter include:
- Leveraging synergies between deep fiber and adjacent services: Carriers should use fiber access networks to provide more services than just internet access. Such services might include integration, network security, and traffic management offerings.
- Create partnerships between carriers and over-the-top (OTT) service providers. As OTT service provider business models rely on ubiquitous access to high-speed broadband, they may be enticed to either build their own fiber networks or sponsor carrier infrastructure deployments.
- Treat builds as dark/wholesale fiber assets. Since fiber is scarce, those who have it can lease access to their infrastructures to willing customers. Deloitte foresees a rise in shared infrastructure models for last-mile fiber access as well as "fiber as leased real estate."
"How the United States inspires the next round of network infrastructure investment will likely determine whether it continues to lead the world in even greater innovation, getting more people connected to faster networks, and bringing them the content they need at prices they can afford," state the report's authors.
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