Amidst rising demand for seamless connectivity, fibre-to-the-x (FTTx) has emerged as a favourable solution for delivering it. This is especially true after the advent of the Covid-19 pandemic and the resultant shift towards a work-from-home scenario, which led to a major spike in the demand for broadband connectivity inside homes and buildings. With millions of people working from home or remote locations throughout 2020 and 2021, FTTx solutions gained a fresh impetus owing to their higher speed and better reliability. As 5G starts being rolled out globally, FTTx can emerge as a favourable medium to complement the technology in enhancing the footprint of broadband services.

Key components

In principle, FTTx is a collective term that denotes the termination point of the broadband network architecture, where “x” stands for a particular terminal such as a home or the cabinet of the end-user premises. The term describes a wide range of broadband network architecture op­tions utilising optical fibre for last-mile connectivity. Therefore, depending on where the network architecture terminates, FTTx could be fibre-to-the-home (FTTH), fibre-to-the-building (FTTB), fibre-to-the-premises (FTTP) or fibre-to-the-curb (FTTC). The network spreads from the end-user premises to the carrier network edge. It can deliver faster and better connectivity to homes and enterprises around the world.

Market size and growth

Owing to the rising demand for FTTx connectivity, the market for it is growing at a steady pace. According to a report by Data Bridge Market Research, the global FTTx market will exhibit a compound annual growth rate of 8.62 per cent during the forecast period of 2022-2029, and is likely to reach an estimated value of $1.34 billion during this period.

The key drivers for growth in the market include:

  • Rising demand for faster application performance and increased data transfer capability
  • Increased internet connectivity and greater number of internet-enabled devices
  • Increased adoption of FTTH broadband connections worldwide
  • Rising prevalence of advanced multimedia services such as internet protocol television
  • Need for fibre-intensive networks that will be crucial for supporting the dep­loy­ment of cutting-edge technologies and solutions such as internet of things, machine-to-machine communication, artificial intelligence, augmented/virtual reality, Industry 4.0, sensors and autono­mous vehicles
  • Advent of the 5G era that will create en­or­mous demand for a fiberised backbone as well as for in-building connectivity through FTTx networks

Among the various components, in­d­ustry experts believe that FTTH architecture is expected to make the largest contribution to the overall FTTx market in the years ahead owing to the rising number of global subscribers, contributing to the growth of the market. The residential app­lication segment is expected to contribute the most to the overall FTTX market, as it offers increased bandwidths for end-users for different services such as robot and voice services.

The India story

The demand for new home broadband connections based on FTTx technologies has witnessed a surge in India too, especially after the onset of the pandemic. During the past three-four years, optical fibre-ba­sed networks have helped scale up the level of broadband penetration in the country.

However, the country still has a long way to go. FTTx penetration in India remains abysmally low in comparison to global telecom markets. Further, India has a legacy of poor fibre connectivity, especially intra-city and last-mile, due to regulatory and right of way challenges, and the lack of a predictable economic model for deploying and operating a business.

To tackle this issue, FTTx implementation needs to go up and FTTH needs to be introduced in every locality in India, augmented with suitable provisions for in-building solutions to enhance the quality of services. Large-scale fiberisation is also key for enabling the success of government pro­grammes such as Digital India, Bharat­Net, the National Broadband Mission and the Smart Cities Mission, as well as for meeting targets under the National Digital Communications Policy (NDCP), 2018.

Convergence with 5G

5G networks require higher bandwidth and network speeds. To this end, FTTx comprises low-latency, high-bandwidth fibre networks that can fulfil all these re­quirements. In addition, it also helps in achieving high-capacity and consistent connectivity while providing long-distance signal transmission, a lightweight form factor and immunity against electromagnetic interference. Further, the convergence of 5G and FTTx networks would lead to a considerable reduction in costs and investments. As per industry estimates, a maximum of only seven per cent more investment in the current FTTx deployment could reap up to 96 per cent savings in the future 5G network.

Telco initiatives

A number of telecom operators across the globe as well as in India are undertaking initiatives to scale up the coverage of their FTTx networks. For instance, in the USA, the four largest telcos – AT&T, Verizon, Frontier and Lumen – account for the lion’s share of FTTH deployments, together covering over 71 million homes with fibre. In India, too, operators have been expanding their FTTx coverage. According to industry reports, the year 2021 saw a significant increase in demand for gigabit passive optical network equipment for multiple regional and pan-India FTTX roll-outs by leading Indian telecom service providers.

Key challenges

The scaling up of fibre networks in India is not devoid of challenges, such as:

  • RoW: Obtaining right-of-way (RoW) at the state and local body levels requires multiple approvals. Further, RoW char­ges vary enormously across cities and states. Higher RoW charges can make the fiberisation cost go as high as Rs 10 million in metros. Moreover, telcos have to pay exorbitant reinstatement charges for laying OFC. However, the launch of the new centralised RoW portal by the government is expected to smoothen the process of obtaining RoW for fibre roll-outs in the future.
  • Fibre cuts: Uncoordinated development activities such as road expansion, laying of electrical cables by multiple agencies and private contractors, waterlogging during monsoons, and rodent attacks result in frequent cuts in inter- and intra-city fibre networks. As per industry reports, India faces 14 cuts per 1,000 km per month on an average, as against the international benchmark of 0.7 cuts.
  • High total cost of ownership: Indian telcos have a two-to-three times faster fi­b­re network capex replacement cycle com­pared to global benchmarks, due to higher active transport capex as well as higher operations and management opex.
  • Capital investments and funding constraints: For building infrastructure in order to support the 5G ecosystem, the­re is an investment requirement of $60 billion-$70 billion. However, with agg­ressive competition and tariff wars, reve­nues are falling, thus making investme­nts in infrastructure a big challenge. To resolve this, the public-private partnership model is being adopted in India. Innovative models such as the deferred payment hybrid annuity model can be applied for broadband as well.
  • Others: Other challenges hampering fibre deployment include the lack of skilled workforce and an inadequate number of alternate and redundant paths.

Opportunities and outlook

Challenges notwithstanding, the expansion of FTTx networks offers several opp­ortunities to stakeholders in the ecosystem. For instance, there are multiple opportunities under the BharatNet project. In order to expedite FTTx deployment, fibre sharing and fibre monetisation models can also be explored. In addition, a huge untapped opportunity lies in meeting the NDCP targets for fibre-to-the-tower, fibre-to-the-household and fibre-to-the-gram panchayat deployments.

Going forward, the country needs to increase investments in optical fibre, and the deployment of fibre needs to happen two to three times faster than the current pace. The sharing of fibre infrastructure and the concept of fibre aggregators shou­ld become the new norm. Further, supportive technologies can be used for stren­g­thening fibre deployment and overcoming RoW challenges. Another key step is to mandate the fiberisation of all buildings un­der the National Building Code. All th­e­­se measures will help in scaling up FTTx coverage, and make the country ready for the next-generation, 5G era.