Fibre-to-the-x (FTTx) is emerging as the ideal solution for providing last-mile connectivity. In light of the growing digitalisation efforts and rising data demand, FTTx deployments have become imperative for building future-proof telecom networks. However, to achieve widespread fibre penetration in the country, challenges related to right of way (RoW) need to be addressed. Industry experts share their views on the current state of FTTx deployments in India and the outlook for the segment…
What promise does FTTx technology hold for the Indian market?
Murtuza Onali Kachwala, Managing Director, Telecom, Media and Entertainment Industry Practice, Protiviti, India
Murtuza Onali Kachwala
The increasing demand for higher bandwidth, optic fibre in backhaul, and triple- and quad-play services are the key factors driving the FTTx market growth. Governments across Asia are encouraging investment in high capacity networks. For developing countries in Asia, such as India, with their rapidly increasing data traffic, it will be critical to continue investing in broadband infrastructure in order to remain economically competitive.
T.V. Ramachandran, President, Broadband India Forum
T.V. Ramachandran, President, Broadband India Forum
India is marching towards digitalisation and the national objectives of Digital India and Broadband for All are focused on providing high capacity multi-gigabit access and backbone networks everywhere. Wireless networks alone cannot handle massive data volumes and need to be complemented with fibre owing to its high bandwidth carrying capacity. The three key drivers for the deployment of fibre are increasing demand for data, move towards 5G and the government’s growing digitalisation thrust. The fiberisation of towers is a must if India has to usher in 5G. All major telcos in India have introduced low-cost fibre-to-the-home (FTTH) plans, which are expected to create and boost demand. Thus, the market for FTTx is extremely vibrant and holds enormous promise.
What is the current state of FTTx deployments in India? What are the key challenges that the market faces?
Murtuza Onali Kachwala
India is far behind many countries in FTTH penetration. FTTH connections account for a mere 0.5 per cent of the total broadband connections in the country. According to a report by iDate Research, Singapore has 95 per cent FTTH penetration, South Korea 82.9 per cent, Hong Kong 71.4 per cent and Malaysia 16.4 per cent. China has seen 70 per cent growth in FTTH subscribers in the past one year alone. A major challenge that FTTx deployments face is obtaining permissions for RoW. There is an immediate need to bring a policy initiative to address RoW challenges so that multiple clearances at local levels can be eliminated.
In the past few years, there have been excessive changes, which have created a data-addicted environment that is supported by high speed internet. As a result, FTTx has become an integral part of telecom infrastructure. Operators are heavily investing or planning to invest in fibre-based technology for supporting speeds of up to 1 Gbps and more. The most common technology used is GPON, which ensures efficient and cost optimal FTTx deployments.
T.V. Ramachandran
The total fibre deployed to population ratio of India is 1x, far behind comparable regimes like the US and China, where the fibre deployment ratio stands at 14x and 9x respectively. We are at least four to five years behind China in terms of last mile connectivity. Further, there are only 1.25 million FTTx connections in India, and the fiberisation of towers is at a bare minimum level of 22 per cent. In addition, an overall broadband density of around 30 per cent (fixed broadband at a low level of below 4 per cent), compared to China’s 81 per cent overall (fixed broadband density at over 60 per cent), presents a huge opportunity for infrastructure planners to design a shared common fibre infrastructure for all kinds of service providers.
Fibre roll-out in India has been slow due to several challenges such as limited policy support, lack of skilled workforce, high RoW charges (which range from Rs 0.1 million to Rs 5 million per km), high cost of customer premise equipment and optical line terminal, lack of relevant applications and content to support business case for FTTH, and lack of awareness in the rural segment. Moreover, the faulty interpretation of the RoW rules by different state and local municipal bodies has resulted in cost variances and delays.
How has the competitive landscape of the FTTH market changed post the entry of Jio GigaFiber?
Murtuza Onali Kachwala
Reliance Jio Infocomm Limited (RJIL) recently announced the launch of its much-awaited FTTH broadband services in India, called RJIL’s GigaFiber. The project has been in development for a few years now with pilot programmes running in select areas. Jio’s entry will spark competition in the broadband business and boost India’s global ranking in fixed broadband from 134 to a higher level. The launch of Jio GigaFiber can immediately disrupt home broadband pricing, forcing rivals such as Airtel to slash rates. It could also impact the larger mobile services market, if RJIL chooses to bundle wired broadband services with its current 4G plans.
T.V. Ramachandran
RJIL’s GigaFibre project, which will provide fibre connectivity to homes and offices in around 900 cities, has led to a wave of competition amongst leading telcos as well as amongst internet service providers. The companies have updated their plans and benefits, reduced their prices and extended offers such as unlimited usage.
What are your views regarding the provisions under NDCP 2018 for improving fibre connectivity?
Murtuza Onali Kachwala
The National Digital Communications Policy (NDCP), 2018 has set futuristic goals to improve access. One of its objectives is to ensure connectivity to all areas and attract investments of $100 billion in the digital communications sector. Private telcos are likely to benefit from NDCP’s plan to ex-pand broadband coverage funded by the Universal Service Obligation Fund.
T.V. Ramachandran
The NDCP recognises the importance of broadband infrastructure in its first objective – “Connect India”. The policy aptly highlights that the digital era cannot happen without India marching towards “Fibre First”, which involves setting up optical fibre links throughout the country for fast internet. Initiatives like 274,246 km of optic fibre deployment to connect 115,000 gram panchayats under BharatNet, development of base stations and towers, increased fiberisation of towers, linking of homes with fibre are humungous by any global standard. What is required is a dedicated and empowered authority or agency to resolve the challenges that are associated with the deployment of fibre.
Will FTTx emerge as a complementary or a competing technology to 5G in the future?
Murtuza Onali Kachwala
There is no winner or loser here. The data market in India is currently being driven by 4G services. From an end-user perspective, 4G offers high speed data access, almost ten times higher than 3G. However, only 20 per cent of sites in India are fiberised, a number that needs to go up to 80-85 per cent by 2022 to support 5G and its enabling technologies such as machine-to-machine, internet of things and artificial intelligence. FTTH networks have the ability to deliver high bandwidth. Operators are increasingly deploying FTTH technology to complement their wireless networks. FTTx will co-exist with 5G wireless, serving both fixed access and mobile customers.
T.V. Ramachandran
We firmly believe that FTTx is an absolute prerequisite for the 5G era. So, FTTx is definitely not a competing technology and could be a complementary one for 5G. While 5G will be essential for high speed and high capacity downloads, fibre will complement it by connecting the 5G eNodeBs to the core network and providing high capacity throughputs to the backbone network. To make commercial 5G a reality in India, fibre-based backhaul support is needed. The percentage of fibre-based backhaul will have to be increased from the current 20 per cent to 70-80 per cent. Deploying fibre closer to the customers can enable efficient transport of increased wireless traffic.
What is your outlook for the FTTx market? What are some of the new business models that the industry can explore?
Murtuza Onali Kachwala
Three key factors that are and will drive the demand for optic fibre networks are the ever increasing data usage, the government’s growing digitalisation thrust and the preparation for the 5G service launch. The country’s wireline broadband subscriber base is expected to increase to 26.2 million by 2021 from 18.2 million this year. Broadband consumption is fragmented, and the demand for video, social networking and location services is increasing rapidly. As users require high-bandwidth access anytime and anywhere, a broadband longtail effect is taking shape. The industry can explore a single or a combination of business models. Existing copper networks need to be immediately reconstructed with FTTx networks to deliver bandwidth capability to support multiplay services such as video. FTTx can be used for offloading 3G/4G traffic. Further, operators can deploy GPON for their backhaul networks.
T.V. Ramachandran
We believe that India should look at becoming the global hub for fibre manufacturing. Over a period, it should grow from meeting its own fibre needs to becoming a role model for other countries in terms of reach, propagation, business models, commercial aspects, etc. As far as FTTH business models are concerned, various alternatives could be considered, such as build your own infrastructure; build, operate and transfer; fibre grid and fibre network convergence.
