Fibre-to-the-x (FTTx) has gained widespread acceptance as the most preferred medium to deliver seamless connectivity. Over the past few years, there has been an explosion in FTTx deployments worldwide. This was accelerated during the Covid-19 pandemic, owing to the spike in demand for broadband connectivity and the resultant traffic load on residential networks. Further, telcos are leveraging FTTx network buildouts to meet 5G network densification requirements.
Key components
FTTx is an umbrella term describing a wide range of broadband network architecture options. The “x” represents the fibre termination point, such as home, antenna and building. Therefore, FTTx has different iterations on the basis of where the network architecture terminates. For instance, fibre-to-the-home (FTTH) refers to any broadband network design wherein the optical cabling terminates at the boundary of the living space so as to reach the individual home or business/office. Similarly, fibre-to-the-antenna is a network architecture utilising fibre optics to distribute signals from a baseband unit to a remote radio head near the top of a cell tower, which is also the fronthaul in 5G. Other variations of FTTx include fibre-to-the-node, fibre-to-the-building (FTTB) and fibre-to-the-curb. Fibre-to-the-premises is a blanket designation covering FTTH and FTTB.
Market size and growth
The market for FTTx connectivity is exhibiting healthy growth on the back of increasing digitalisation and rising consumer demand. Industry reports estimate the global FTTx market to reach around $1.34 billion by 2029, at a compound annual growth rate of 8.62 per cent from 2022 to 2029. A large share of growth in the overall FTTx market can be attributed to the rising FTTH connections. Advanced multimedia services such as internet protocol TV, high-definition TV and video on demand, along with the increasing number of internet-enabled devices are leading to higher FTTH demand from consumers. Smart cities are also expected to significantly drive the need for fibre, with some forecasting smart home applications to be the most lucrative FTTH segment. Smart city infrastructure with its countless IP-equipped devices that need extremely low latency will become a major growth driver.
Meanwhile, business applications including video conferencing, hosted voice-over-IP and IP virtual private networks are pushing the demand from the enterprise end. In addition, technological advancements and widespread adoption of cloud-based services, internet of things and edge computing are expected to fuel the FTTx market growth.
Role in 5G
5G networks require higher bandwidth and network speeds to deliver to numerous use cases and a wide array of connected devices. FTTx can fulfil these requirements owing to its low-latency and high-bandwidth fibre networks. In fact, without adequate fibre back- and front-haul, there can be no 5G. Increasingly, fibre is also required to support 5G macrocell, small cell and antenna tower infrastructure. In addition, smart synergies between the two technologies can substantially reduce costs and investments. Industry estimates indicate that a maximum of only 7 per cent more investment in the current FTTx deployment could reap up to 96 per cent savings in the future 5G networks. Furthermore, 6G is on the horizon and the Wi-Fi 7 standard will be published in 2024. This will further push bandwidth demands. Hence, scaling up fibre deployments will be key to harnessing the full potential of 5G and future network generations.
Backhaul requirements
Traditionally, an operator’s backhaul network was dominated by microwave, which accounted for 75-80 per cent of the network. While microwave served as an adequate backhauling medium in the 2G era, it is becoming less relevant in the 5G environment.
5G requires two times more fibre deployment from the backhaul point of view. The stringent requirements for 5G heavily rely upon the interconnected backbone in the short term. An intensive 5G fibre-optic backhaul is necessary to achieve low latency, low interference and high network capacity, and seamlessly stream bandwidth-intensive applications. Further, with small cells becoming a crucial part of the 5G roll-out, fiberised backhaul will be essential in the future. As such, industry stakeholders are increasingly exploring ways to increase fiberisation in the backhaul and the last mile. Experts suggest that by 2024, at least 70 per cent of towers in India will need to be fiberised for a full-scale launch of 5G services, which would require an investment of Rs 2.2 trillion.
Global scenario
Industry players worldwide are accelerating the pace of fiberisation to facilitate FTTx growth. As per the International Telecommunication Union data, Europe has more than 60 per cent of the population living within 10 km of a fibre-optic network, while the reach of fibre optic networks in the Asia-Pacific region is only 22 per cent, Africa 25 per cent and the Arab states 26 per cent. However, FTTx adoption in Asia-Pacific is steadily rising. China has already established itself as a global leader in terms of countrywide FTTH uptake. Meanwhile, Singapore has over 92 per cent FTTH penetration, South Korea 77.5 per cent, Hong Kong 76 per cent and Malaysia nearly 23 per cent. GlobalData predicts that FTTH/ FTTB will emerge as the leading fixed broadband technology in the Asia-Pacific and will account for 94.8 per cent of the total fixed broadband service revenue in the region by 2026.
Telco initiatives and plans
Telecom operators are actively expanding the coverage of their FTTx networks. For instance, Reliance Jio’s pan-Indian fibre-optic network is more than 1,100,000 km in length. As per the telco, it is witnessing an acceleration in the adoption of JioFiber and has become the leading FTTx service provider in India, with over 7 million connected premises. Jio plans to reach 50 million households, or about a fifth of India’s population with fibre optic. However, it has not announced any timeline to achieve this. Jio also claims that at least 90 per cent of its deployed 5G base transceiver stations (BTSs) are fiberised.
Meanwhile, Bharti Airtel has a fibre network footprint of 400,000 km. The telco has been expanding its fibre coverage by 40,000 km every year. It aims to increase this by an additional 20,000 km per year. Moreover, it has over 55,000 fiberised sites. Airtel’s existing FTTH network covers 18 million home passes. The telco plans to be more aggressive and achieve 5 million-6 million home passes through its own model as well as the local cable operator model.
Recently, the Department of Telecommunications announced its plans to extend a pilot project by Bharat Sanchar Nigam Limited to provide FTTH broadband connections to 500,000 rural households. The pilot started in October 2022 to provide wired broadband connections to 100,000 rural households, but nearly 200,000 connections have already been provided under the scheme as of March 2023.
Challenges and future opportunities
FTTx penetration in India remains abysmally low as compared to global telecom markets. India has not yet reached the halfway level of fiberisation against a target of 70 per cent by 2024 set under the government’s National Broadband Mission. This has put the country behind other emerging nations such as Thailand (90 per cent) and Malaysia (80 per cent). To tackle this issue, FTTx implementation needs to be improved and FTTH services need to be introduced in every area of the country, augmented by suitable provisions for in-building solutions to enhance the quality of services. However, several challenges remain to be addressed before achieving this.
Fiberisation is expensive. With huge expenditure on 5G spectrum, coupled with around Rs 4.17 trillion of debt (as recorded in financial year 2021-22), Indian telcos face financial constraints. CRISIL estimates that Indian operators may invest over Rs 1 trillion only in laying fibre networks over the next two to three years. This presents opportunities for telcos and tower companies to explore new business models in the fiberisation space.
Another challenge is the non-uniform implementation of the right-of-way (RoW) rules. RoW charges are also high and vary significantly across cities and states. This is the biggest pain point for operators as the cost may go as high as Rs 10 million in metros. Further, operators are facing a shortfall in fibre preface manufacturing. This highlights the opportunity for equipment manufacturers to capture the market gap through Make in India initiatives. Other roadblocks hampering the expansion of FTTx networks include frequent fibre cuts, lack of a skilled workforce and inadequate number of alternative paths.
However, the solutions to all of these challenges also represent massive untapped opportunities for different stakeholders in the fibre ecosystem. This could be the introduction of new fibre sharing and fibre monetisation models, or leveraging new-age technologies and automation for fibre testing and monitoring, to name a few. As the “x” in FTTx creates unlimited flexibility, the future diversification options for the technology will be unlimited.
