Telecom : Trends & Developments  - "Fibre Focus : Industry Prepares for FTTx roll-out"

Traditional technologies such as DSL and cable modem are not efficient enough to meet the network demand of customers looking for high-bandwidth applications such as high definition TV, 3D TV, high speed internet access, video-on-demand, IPTV, online gaming and distance learning due to limitations of copper infrastructure and the wireless interface. In order to meet the increasing demand for data and video services, the bandwidth delivery mechanism in the last mile is undergoing a paradigm shift with optical fibre-based networks replacing the old DSL architecture. Fibre in the last mile enables broadband speeds of up to 100 Mbps (download and upload).

Service providers across the world are, therefore, developing new network architectures to deliver high-bandwidth services to the last mile, which are included in the umbrella term FTTx. This includes fibre-to-the-curb, fibre-to-the-node, fibre-to-the-home (FTTH) and fibre-to-the-premises.

Globally, FTTx has gained scale in countries like the US, Japan, South Korea and China. Government initiatives are contributing to the strong FTTx markets in New Zealand and Australia as well.

In comparison, FTTx is still considered a premium offering in India. Despite the significant market potential, the country does not have a large last mile fibre network. Though operators like Bharat Sanchar Nigam Limited (BSNL), Bharti Airtel and Reliance Communications (RCOM) have set up a strong fibre backbone, efforts to leverage this network to provide high quality services have been limited.

While the country’s broadband user base increased from 9.47 million in June 2010 to 14.57 million in June 2012, the share of fibre-based broadband users declined from 0.3 per cent to 0.19 per cent during the same period. Currently, there are only about 30,000 fibre-based broadband subscribers in the country. DSL is the most preferred technology for broadband service providers and has 82.93 per cent share in the broadband subscriber base, followed by cable wireless (5.75 per cent) and Ethernet LAN (5.63 per cent).

However, the deployment of fibre-based last mile networks is gaining momentum as the telecom market moves towards convergence. The demand for FTTx will initially be driven by the metros, followed by Tier I, Tier II and Tier III cities.

Key Initiatives

Recognising the opportunities in the Indian FTTx market, operators have initiated the roll-out of FTTx services. As of now, these are largely limited to enterprise users.

BSNL is offering FTTH networks on gigabyte passive optical network (GPON) technology in cities like Hyderabad, Jaipur, Vadodara, Bengaluru, Patna, Bhopal etc. In 2010-11, the operator demonstrated this technology to about 65 large enterprises including Bharat Heavy Electricals Limited and the State Bank of India.

Other operators that have introduced FTTx services include Mahanagar Telephone Nigam Limited, Bharti Airtel, RCOM and Sify Technologies.

Earlier this year, the Department of Telecommunications released the National Telecom Policy, 2012 (NTP, 2012), which provides the broad guidelines for the sector. The NTP, 2012 envisages the provision of high speed and high quality broadband access to all village panchayats through optical fibre by 2014 and progressively to all villages.

A key issue faced by internet service providers is acquiring right-of-way (RoW) for offering wireline connections to users. The policy, which takes into account the mobile and broadband segments, suggests a review and simplification of RoW and tower installation to facilitate coordination between service providers and the state/local bodies. In addition, the policy suggests engagement with ministries – including those of surface transport, urban development, rural development, power and railways – state governments and local bodies for the development of guidelines for the provision of common service ducts for systematic growth of telecom infrastructure. In addition, the policy encourages the deployment of FTTH by independent infrastructure providers with enabling guidelines and policies, and creation of an institutional framework to coordinate with various government departments for laying optical fibre cable (OFC) networks.

 

Focus on FTTH

Residential complexes are likely to drive the demand for FTTH, with a single service provider catering to voice, data and video requirements. In India, the first FTTH project was launched jointly by Ericsson and Radius Infratel in December 2008 in ATS Paradisso, a residential complex in Greater Noida. All the residential units of the housing complex are connected through OFC and associated equipment.

Recently, real estate developer House of Hiranandani has partnered with Sterlite Technologies to provide FTTH services at its properties. The network has already been set up at the company’s property in Chennai. Its projects in Bengaluru and Mumbai would also have complete IP-based communication and security infrastructure in the future.

Hiranandani’s upscale township on the IT corridor in Chennai is spread across 110 acres. It consists of some of the city’s tallest buildings of 28 floors with over 2,000 apartments. Every home of the township can access 40 Mbps connectivity reserved in the local band, which is scalable to up to 1 Gbps. Under the model introduced by Sterlite, service providers provide their connections to the residents of the township through the local FTTH hub. Under this set-up, revenues are shared by the service providers and Sterlite. The real estate developer’s role is limited to the completion of civil works and laying of cables.

 

Technology and Architecture

FTTH technologies are of two types – active and passive. Both technologies are capable of delivering voice, video and data services. The former has an active component such as a switch or a router between the central office and the customer. Passive technologies have a passive (unpowered) component such as an optical splitter between the central office and the customer.

Works on determining the standards for FTTH technologies are undertaken by two organisations – the Institute of Electrical and Electronics Engineers (IEEE) and the Telecommunication Standardization Sector of the International Telecommunication Union (ITU-T). The IEEE standards focus on the use of Ethernet-based technologies on the access network (Ethernet in the First Mile [EFM]) and the ITU standards focus primarily on passive optical networks (PONs). The ITU-T and IEEE standards groups coordinate extensively to ensure that the standards developed are not conflicting.

FTTH standards are moving towards higher line speeds, that is, more users per PON, and standardised wavelengths with the ability to provide a dedicated wavelength for broadcast video services. Meanwhile, the standards for EFM do not specify the number of homes that must be supported per feeder fibre. This allows the systems to be deployed in either an active star or a home-run topology, supporting as many users as current switching technology is capable of without the need to modify the standard. In some current active star implementations, the number of homes per feeder fibre supported is as high as 48. This is expected to increase further with an improvement in switching technology.

In India, passive technologies have been more commonly deployed. PON systems use a common fibre architecture, but there exists a variety of opto-electric approaches. The original broadband PON and its successors, GPON and gigabit ethernet PON (GEPON), are the widely deployed technologies. GPON and GEPON have adequate capacity for delivering video and high speed internet services. Some service providers opt for GPON for its ability to create multiple independent service channels to the user via virtual circuits, while others prefer EPON because it suits Ethernet-based metro architectures.

 

The way forward

With limited infrastructure, the country is far from realising the dream of smart cities and society. We are at least a couple of years away from realising the full benefits of FTTx.

The growing demand for higher bandwidth in the country is going to be the key driver for the FTTx segment. Also, the penetration of PCs, laptops and other mobile devices will play a crucial role in the mass adoption of FTTx services. The only differentiation in the mode of service provision is going to be between wired or connected broadband and wireless broadband.

The coming year would mark an important milestone for the Indian telecom sector as several operators launch broadband services on a large scale. The year would also be significant as operators make a paradigm shift from voice to data, and in turn, will have to create surplus capacities for data and not voice. An operator which is likely to be a game changer in this segment is Infotel Broadband Services, a subsidiary of Reliance Industries Limited. The company plans to launch broadband services by July 2013.

For developing a broadband highway, the company is planning to invest $8 billion within three-five years. The company is creating a world-class data infrastructure by deploying 100,000 route km of OFC and setting up around 7,000 towers in the first phase. On the wireline front, Infotel is connecting commercial buildings and homes with OFC using FTTx, which will provide broadband speeds of over 10 Mbps. In the first phase, the company is planning to deploy 2 million lines each in Mumbai and Delhi. It intends to deploy 3,500 traffic aggregation points in both cities. Of this, 10 per cent would be FTTx and 90 per cent LTE eNODeB. Each aggregation point can cater to 5,000-10,000 subscribers depending upon the geography.