Broadband watcher Point Topic says that its latest data shows that fiber optic cable broadband additions have outstripped the total cable modem broadband additions for the first time in the first quarter of 2008. It says there were 2.5 million new cable broadband subscribers added worldwide while fiber grew by 4.2 million users.
‘It’s a significant milestone for fiber optic broadband, where it is available consumers will take fiber over other broadband technologies,’ said Oliver Johnson, Point Topic CEO.
It is a long time since both AT&T and Verizon in 2004 in the US began major fiber buildouts, with Verizon taking it to the home and AT&T to the neighborhood. Both tried to change the face of the economic cost of adding broadband in this way, and from figures as high as $1,200 per home, costs have plummeted to connect a home to fiber, and are now getting closer to cable costs. And that has meant that the service can be offered for similar prices to cable and DSL, which has led to the rise in acceptance. But it remains relatively expensive in the US, and despite the spending of those two companies, it is other regions where fiber dominates.
‘If you look at the cost per megabit then DSL comes in at around $20 per megabit per month taking global averages. Cable does better at roughly $12 but they are both completely eclipsed by fiber where costs can get as low as 50 cents per megabit per month,’ continues Johnson. This implies that cable and DSL users still have an appetite for greater broadband speed, because it is the faster speed of fiber that creates these data statistics.
While there are sizeable variations from country to country, region to region and operator to operator a rule of thumb is that DSL can cost the consumer more than 15 times as much as fiber to get a megabit of bandwidth and cable is 7 times as expensive given the current tariffs. In the US cable is more expensive than DSL, so it shows how price conscious cable operators are around the rest of the world.
The growth in fiber numbers is being driven by China, Japan and South Korea where cable and DSL are losing subscribers to the fiber technologies. While in the US, UK, France and Germany low availability means low adoption.
‘There are problems in the de-regulated markets when it comes to major infrastructure investment. Fiber deployment is expensive and in the US and Europe there are significant regulatory hurdles to overcome,’ says Johnson.
‘It’s difficult to persuade operators to make the sort of commitment needed when they can’t guarantee their returns. In most western markets regulators frown on monopolies and it’s very difficult to sanction government expenditure given the self-imposed legal frameworks. Without some form of centralized funding however it will be a long time before consumers in these markets get access to cheaper bandwidth,’ concludes Johnson.
China also continues to gain momentum in terms of broadband overall. At the moment it’s still number two in the world in terms of total broadband subscribers to the USA but the gap continues to close.