optimize your ftth investments de-risk your strategyadtran.com/pub/library/presentations/fierce...

® Adtran, Inc. 2009 All rights reserved

Ryan McCowan & Ronan Kelly ADTRAN Product Management

Optimize Your FTTH Investments

De-risk Your Strategy

2

Demand Drivers

Speed – Marketing creating demand for higher bandwidth

– DOCSIS 3.0 Competing on speed

100Mbps is the showcase offering

– New Entrants creating market disruption

Google Fiber - Focused Gbps service offering

LTE Wireless Operators

– Government Broadband Initiatives

100 Squared – EU 2020

3

Evolution towards Cloud Culture

Physical Content

Local Storage

No - Download

Kbps Mbps 10Mbps 100Mbps Gbps

4

Evolution towards Cloud Culture

Physical Content Online Content

Local Storage

No - Download One Time Download

Local Storage

Kbps Mbps 10Mbps 100Mbps Gbps

5

Evolution towards Cloud Culture

Physical Content Online Content Cloud Services

Local Storage

No - Download One Time Download

Local Storage

Cloud Storage

Regular Repeated

Downloads

Kbps Mbps 10Mbps 100Mbps Gbps

6

Evolution towards Cloud Culture

Physical Content Online Content Cloud Services

Local Storage

No - Download One Time Download

Local Storage

Cloud Storage

Regular Repeated

Downloads

Kbps Mbps 10Mbps 100Mbps Gbps

Bandwidth & Service Consistency Increasingly Important

7

Access Evolution to 1Gbps and Beyond

Street

Cabinet

8

Cross Box

Subscriber Drop

What are the risks?

9

Cross Box

Subscriber Drop

Phase 1 ADSL2+

Emerging Market

Phase 3 FTTX

Mature Market

Phase 2 VDSL2

Developed Market

Typical Operator Network

10

Cross Box

Subscriber Drop

Typical Operator Network

11

Cross Box

Subscriber Drop

Typical Operator Network

Greenfield – FTTP for sure

Brownfield – FTTP is tricky and risky

There are great FTTx alternatives: – Vectored VDSL2

– G.fast

12

FTTH: What is the Consumer market?

13

FTTH: What is the Consumer market?

Prepared to pay a

premium because it is

a Fibre Service

14

FTTH: What is the Consumer market?

Prepared to pay a

premium because it is

a Fibre Service Likely retain or take up

Service offering

Because of the Bandwidth Speed

15

FTTH: What is the Consumer market?

Prepared to pay a

premium because it is

a Fibre Service Likely retain or take up

Service offering

Because of the Bandwidth Speed

Service Selection

Primarily driven by

cost

16

Emerging Threats to FTTH Investment Model?

17

Emerging Threats to FTTH Investment Model?

40 Million

20 Million

24 Million

12 Million

Where will the next ARPU Erosion come from?

18

Emerging Threats to FTTH Investment Model?

40 Million

20 Million

24 Million

12 Million

1 Billion

500 Million

200 Million

600 Million

Where will the next ARPU Erosion come from?

19

Google At A Glance

Google At A Glance Founded 1998 (2004 IPO) $ 38 B50 B REV (20112012) $ 4.5 B annual capex $ 28 B for Google Fiber (Estimated) 54 k employees Targeting 50k to 500k homes

(FTTH)

• Google Fiber in Kansas City Metro • Announced KC project March 2011,

• Announced construction April 2012 (both

aerial and buried fiber)

• Launched service July 2012

• 1 Gbps speeds offered in 180 Fiberhoods • $300 fee for Free Internet 5/1 Mbps

• $75/mo for Gigabit Internet 1000/1000 Mbps

• $120/mo for Gigabit Internet + TV

• Building own gear and leveraging higher

service take rates to improve profits. • Building own STB, direct sourcing ONTs

• Using Social Networking to ensure higher

take rates (5 – 25%) of neighborhoods.

• Additional cities announced in April 2013 • Austin, TX and Provo, UT

20

FTTC – Increasing 100 Mbps reach

Street

Cabinet

21

New Investment in FTTCab/FTTN

Project Velocity IP

November 2012 $14B to boost broadband

Extend U-Verse FTTN coverage by 8.5M homes by 2015

Compete, Transform, & Innovate

December 2012 €6B for FTTC w/ vectoring in Germany

Increase VDSL coverage from 36% to 65% by 2016

FTTCab Expansion

September 2012

€1B+ cooperative deployment

FTTCab to 6.1M homes in 100 cities by the end of 2014

22

100 Mbps @ 550m with

vectoring

Vectoring

Gain

Vectoring eliminates Far End CrossTalk (FEXT) and allows service providers to deploy

100 Mbps out to >1 km over two pairs of copper

VDSL2 with Vectoring Mass-Market 100 Mbps Service Delivery

VDSL2 w/ Vectoring: – Latest generation copper

access technology for FTTN architectures

– Mass deployable technology in 2013

– Delivers 100Mbps out to >1km/3kft with 2pr bonding

– Enables cost-effective and widespread delivery of 100M services

– Small form-factor DSLAMs optimized around vectoring coming to market

23

Inherent Synergy of FTTx and FTTP

Deep fibre is making loops shorter….

And shorter…

CO/Exchange

Remote Terminal or

Street Cabinet

Small Form-factor

sealed DSLAMs

Distribution Point

under sidewalk

24

Ultra Low Cost for Video Delivery

Install

anywhere

This pit fills with water

when it rains!!!

25

Copper Pairs, Binders, and Cables

26

VDSL2 service can achieve 100Mbps

No Noise

FTTC

Providing there is no noise or cross-talk between services

FTTC (Street Cabinet) VDSL2 solutions can provide 100Mbps

over 1 km from a Fiber to the Cabinet

Symbol Key

VDSL2 Port

Unused

Copper-pair

Activated

Copper-pair

Customer

Premises

27

Cross-talk impacts performance

No Noise

FTTC

Far-End Cross-Talk (FEXT) can reduce VDSL2 performance by 50% or more

28

Noise, cross-talk degrades performance

29

Vectoring reduces cross-talk

No Noise

FTTC

30

Vectoring reduces cross-talk

No Noise

FTTC

31

Vectoring reduces cross-talk

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

32

Vectoring reduces cross-talk

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

33

Vectoring reduces cross-talk

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

Vectoring was designed to eliminate self-FEXT and allow service providers to

deploy advanced services of 100 Mbps and beyond

34

Vectoring improves VDSL2 performance

35

‘Alien’ services impact vectoring benefit

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

36

‘Alien’ services impact vectoring benefit

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

37

‘Alien’ services impact vectoring benefit

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

?

38

‘Alien’ services impact vectoring benefit

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

Alien Service

39

‘Alien’ services impact vectoring benefit

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

Alien Service

All pairs within a binder need to be in the Vectoring Group

otherwise vectoring doesn’t provide any benefit.

40

‘System-level’ vectoring benefit

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

Alien Service

41

‘System-level’ vectoring benefit

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

Alien Service

AS PART OF A ‘SYSTEM’

42

‘System-level’ vectoring benefit

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

AS PART OF A ‘SYSTEM’

43

‘System-level’ vectoring benefit

No Noise

FTTC

Receivers send transmitters key measurements

Transmitters adapt signals to cancel crosstalk

Alien Service

AS PART OF A ‘SYSTEM’

The solution to the problem of alien pairs is

to take a “system-level” approach to vectoring.

44

Vectoring Summary

Increases VDSL2 bandwidth – 50% or more; Attain 100Mbps per

pair

Works best on short loops – Less than 1.5km/5kft

A system-level approach is key – Any ‘alien’ service reduces

performance

For more information, watch the

recording of the Fierce/ADTRAN webinar

“Vectoring Demystified” http://www.fiercewireless.com/offer/adtran_dec2012

45

Summary

Near-term requirement: 100Mbps

Make smart investments in the face of a rapidly changing landscape

Stay focused on customer experience, not technology for its own sake

Beware disruptive technologies and market entrants – Revenue erosion

– Undermine business case assumptions

Incremental investment with quick ROI mitigates risk

46

A Comprehensive Toolkit

Be technology-agile – Greenfield: FTTP is the obvious choice

– Brownfield: FTTP economics are challenging, FTTN is an effective alternative

Carriers must continue to leverage existing network to fund long-term fiber buildout

Successful carriers will combine both architectures to build a profitable network

The all-fiber future belongs to those who survive long enough to reach it

47

Thank You!