Fiber and cable networks are dominating the global broadband market, with the technologies now servicing 77% of fixed subscriptions, new figures from Point Topic have revealed.
According to the Global Broadband Statistics, which take into account subscriptions up to the end of 2017, more than 50% of people in more than 40 countries, including Singapore (97%), China (89%), United States (87%), and the UK (55%), are connected via full-fiber, fiber-fed copper or cable.
Point Topic Research Director Dr Jolanta Stanke told the Broadband Forum:
“We are finding that customers across most global regions increasingly prefer faster broadband services delivered over fiber and cable platforms, as opposed to ADSL. This trend will continue as more bandwidth-hungry young consumers become paying decision makers, even though superfast 4G LTE and 5G mobile broadband services will compete for their wallets.”
Fiber-fed subscriptions – including Fiber-to-the-Home (FTTH), Fiber-to-the-Building (FTTB), Fiber-to-the-Cabinet (FTTC), Very High Bitrate Digital Subscriber Line (VDSL), VDSL2 and G.fast – accounted for 57% of broadband subscriptions, with more than 530 million connections. Stanke agreed VDSL and Gfast were together largely responsible for the growth that fiber has seen, with more than 30 operators across all continents deploying or trialing G.fast.
“G.fast gives operators a more cost-effective variant of fiber that will be used by operators who want to upgrade their existing networks quicker and more easily,” she added. “This could enable them to serve more customers in less densely populated areas, where direct fiber investment is less economically feasible.”
In total, cable, including hybrid fiber-coaxial, accounted for 20% of all fixed broadband connections. According to the report, the latest standard of this technology is currently deployed across several markets, being especially popular in North America, and can deliver gigabit download speeds.
Broadband Forum CEO Robin Mersh said the figures reflect the fact that new technologies that let operators deploy fiber deep into the network without having to enter buildings themselves are quickly moving from trials to mass deployment.
“If operators want to deliver competitive broadband services, maximizing their investments through the use of technologies like G.fast is vital,” said Mersh. “Expanding the footprint of their existing fiber networks in this way is cost-effective and delivers the gigabit speeds consumers crave. The growing trend towards fiber, whether its fiber-fed copper or full fiber, and cable deployments highlighted by Point Topic’s report confirms that the Forum’s work on interoperability and management of ‘fiber-extending’ technologies is vitally important.”
The voracious demand for connectivity is evident in the increased demand for fiber, cable and coax despite the parallel growth of LTE and MAYBE (?) “5G.”
Though “5G” is in currently proprietary to each wireless network operator, huge investments in fiber, coax and copper are being made because strategic planners expect 5G to be mainstream in the next several years (we think NOT until late 2021 at the earliest when IMT 2020 recommendations are finalized and implemented in base stations and endpoint devices.
Last month, Broadbandtrends’ Global Service Provider G.fast Deployment Strategies surveyed 33 incumbent and competitive broadband operators from across the globe. The market research firm found that four in five service providers have G.fast plans for this year and that 27% are in active deployments. AT&T is a huge supporter of G.fast while Verizon is not.
About the Broadband Forum
Broadband Forum, a non-profit industry organization, is focused on engineering smarter and faster broadband networks. The Forum’s flagship TR-069 CPE WAN Management Protocol has now exceeded 800 million installations worldwide.
The availability of optical fiber connectivity to large and medium size commercial buildings in the U.S. jumped to 54.8% in 2017, based on latest research from Vertical Systems Group. AT&T, Verizon and CenturyLink’s aggressive build-outs of fiber into commercial buildings have continued to increase the availability of fiber connectivity.
As a result, the U.S. Fiber Gap has dropped to less than fifty percent (45.2%) for the first time. This annual benchmark quantifies the scope of fiber lit buildings in the U.S. with twenty or more employees. Encompassing more than two million individual business establishments, this base of commercial buildings maps directly to the addressable market for higher speed Carrier Ethernet, Cloud, Data Center, Hybrid VPN and emerging SDN-enabled services.
“More commercial U.S. buildings were newly lit with fiber during 2017 than in any other year since we initiated this research in 2004…..
AT&T told investors that it reached 400,000 business buildings with its own lit fiber facilities. Due to AT&T’s aggressive build-out, the service provider now covers over 1.8 million U.S. business customer locations. The telco said it is “adding thousands more buildings each month.”
CenturyLink and Verizon took the M&A path to enhance their on-net fiber holdings.
In a huge M&A deal, CenturyLink’s purchase of Level 3 increased its on-net building reach by nearly 75% to approximately 100,000 buildings, including 10,000 buildings in EMEA and Latin America, which gives the #3 U.S. telco a larger footprint to deliver carrier Ethernet and software-defined network services.
Verizon’s purchase of XO Communications gave the telco additional metro fiber networks in 40 major U.S. markets with over 4,000 on-net buildings and 1.2 million fiber miles.
Consolidated Communications also enhanced its on-net fiber holdings via its acquisition of FairPoint. By acquiring FairPoint, Consolidated immediately established itself as the ninth largest fiber player with a presence in 24 states and 8,000 on-net buildings.
This greater density will enable Consolidated to pursue more dark fiber and lit Ethernet service opportunities with a larger mix of business and wholesale customers.
What was also notable about this year’s M&A on-net building rush was the presence of nontraditional players like Uniti Fiber, which acquired two regional fiber providers, Southern Light and Hunt Telecom. These two deals give the REIT more fiber to pursue a mix of wireless, E-Rate, military, enterprise and wholesale opportunities, including fiber-to-the-tower backhaul, small cell networks and dark fiber. The acquisition of Southern Light in particular gives Uniti access to an additional 4,500 on-net locations.
Fueling Ethernet, 5G deployments
Having more available on-net fiber is another factor that plays into service providers’ U.S. Ethernet service reach and 5G plans by creating pipes through which wireless operators can build small cell and distributed antenna systems (DAS) to improve wireless coverage in business buildings.
Encompassing more than 2 million individual business establishments, this base of commercial buildings maps directly to the addressable market for higher speed carrier Ethernet, cloud, data center, hybrid VPN and emerging SDN-enabled business services.
Several of the service providers that have high on-net fiber building counts represent some of the largest Ethernet providers in the U.S.
On the Ethernet end, AT&T, CenturyLink and Verizon continue to demand high spots in the Ethernet space. However, the effect of M&A clearly has altered the Ethernet landscape.
CenturyLink knocked AT&T from its nearly 13-year reign as the top domestic Ethernet provider in the U.S. by completing its acquisition of Level 3 Communications. The service provider’s move up the ranks of VSG’s year-end 2017 U.S. Ethernet Leaderboard was also a function of continued growth in Ethernet ports for both companies. Earlier, Level 3 ranked second to AT&T and CenturyLink ranked fifth on the Mid-2017 U.S. Ethernet Leaderboard.
But Ethernet is only one factor driving ongoing on-net fiber builds. Cochran noted in an e-mail to FierceTelecom that “larger providers larger providers are accelerating deployments” to position themselves for 5G.
Verizon, for example, acquired WideOpenWest’s fiber assets in Chicago, securing fiber to more than 500 macro-cell wireless sites and more than 500 small-cell wireless sites in the area.
Crown Castle advanced its fiber standing by acquiring Lightower—a deal that gave it greater fiber density to address businesses and its traditional wireless business customers deploying small cells in buildings. This acquisition gave Crown Castle rights to approximately 60,000 route miles of fiber, with a presence in all the top 10 and 23 of the top 25 metro markets.
As the expectations for higher speed Ethernet, cloud and in-building wireless coverages continues to ramp, service providers will continue to further narrow the fiber gap inside buildings. But unlike the speculative builds of the 1990s, these are focused on bandwidth hungry applications that are showing no signs of slowing.
For this Vertical Systems Group analysis, a fiber lit building is defined as a commercial site or data center that has on-net optical fiber connectivity to a network provider’s infrastructure, plus active service termination equipment onsite. Excluded from this analysis are standalone cell towers, small cells not located in fiber lit buildings, near net buildings, buildings classified as coiled at curb or coiled in building, HFC-connected buildings, carrier central offices, residential buildings, and private or dark fiber installations.
U.S. service provider C Spire today announced a partnership with electric utility Entergy Mississippi which aims to bring more than 300 miles of fiber to remote areas of Mississippi. C Spire will build and own the network, with Entergy contributing construction costs, according to C Spire Vice President of Government Relations Ben Moncrief in an interview with Telecompetitor.
Entergy will lease capacity on the network from C Spire to support its smart grid initiatives, he said. C Spire eventually expects to extend the middle-mile network to end user locations to support retail services, he added, although he emphasized that any such plans are not part of today’s news.
Details about the C Spire – Entergy partnership can be found in this press release. Clearly there were a lot of synergies for these companies to work together.
“This opens the door to offering service to residences and industrial parks,” Moncrief said. “But today is just about getting the (fiber optic) backbone in place.”
When Entergy Mississippi sought the Mississippi Public Service Commission’s approval to build a network to support its smart grid plans, one of the commissioners asked whether that network could also be “at least a foundation for broadband services,” Moncrief explained.
That idea led Entergy to a meeting with C Spire at which representatives of both companies had an “aha moment,” Moncrief recalled.
C Spire initially was a wireless carrier, as well as a provider of wireline business services, but in recent years has been quite aggressive in deploying fiber-to-the-home (FTTH) and other broadband network infrastructure in numerous rural markets in Mississippi. Meanwhile, Moncrief said, “Here’s an electric utility that for security reasons is keeping infrastructure away from population centers.”
The network will be installed with a minimum of 144-count fiber, “in some places more,” Moncrief noted. Each company will have its own fiber. The areas that the network will run through are “very rural” and might have been too costly for C Spire to build out to without the Entergy investment, Moncrief added.
C Spire also will gain connectivity from the rural areas to population centers, Moncrief said.
The construction project will involve placing fiber optic cable along five separate routes as follows:
- Delta: a 92-mile route through Sunflower, Humphreys, Madison and Hinds counties and near the cities of Indianola, Inverness, Isola, Belzoni, Silver City, Yazoo City, Bentonia, Flora and Jackson.
- North: a 51-mile stretch in Attala, Leake and Madison counties, including near the towns of McAdams, Kosciusko and Canton.
- Central: a 33-mile route through Madison, Rankin and Scott counties and near the towns of Canton, Sand Hill and Morton.
- South: a 77-mile route passing through Simpson, Jefferson Davis, Lawrence and Walthall counties and near the towns of Magee, Prentiss, Silver Creek, Monticello and Tylertown.
- Southwest: a 49-mile stretch in Franklin and Adams counties that’s near the communities of Bude, Meadville, Roxie, Natchez and Eddiceton.
“We’re excited about partnering with C Spire to modernize our electrical grid and expand rural broadband access in some hard-to-reach areas across the state,” said Haley Fisackerly, president and CEO of Entergy Mississippi. “We have about 30,000 customers within five miles of the proposed routes who could potentially have access to broadband service when the project is complete. In addition, all of our customers will benefit from the enhancements to our communication systems that connect our facilities, substations, offices and radio sites.” The company provides electric service to an estimated 445,000 customers in 45 counties across the state.
“A robust broadband infrastructure is critical to the success of our efforts to move Mississippi forward by growing the economy, fostering innovation, creating job opportunities and improving the quality of life for all our residents,” said Hu Meena, CEO of C Spire, a Mississippi-based diversified telecommunications and technology services company.
Deutsche Telekom says it will begin the second phase of its fiber-optic network for business parks, which will provide internet connections at speeds of up to 1 Gb/sec to as many as 7,600 enterprises.
Deutsche Telekom’s latest fiber project will include laying almost 500 km of fiber-optic cables and connecting company locations directly to the fiber-optic network in 33 German towns and cities. The company says it is using sustainable, cost-effective micro trenching technology during construction to avoid inconveniencing town and city residents.
The German towns and cities whose business parks are being upgraded include: Amberg, Bielefeld, Bochum, Bonn, Braunschweig, Bremen, Cologne, Dippoldiswalde, Dresden, Düsseldorf, Flörsheim, Frankfurt, Frechen, Großbeeren, Hamburg, Hermsdorf, Hildburghausen, Hürth, Kelkheim, Kriftel, Langen, Leipzig, Lindlar, Lübeck, Mannheim, Markkleeberg, Nienburg, Oldenburg, Pinneberg, Planegg, Potsdam, Sandersdorf-Brehna and Seevetal.
Deutsche Telekom will connect companies at no additional charge should they make the switch to its business parks’ fiber-optic network “early on.” (timing unspecified?)
Fiber-optic lines for about 7,600 enterprises: In 33 business parks the companies that decide “early on” to switch to DT’s fiber-optic network will be connected at no additional charge.
The range of fiber-optic rate plans runs from asymmetric 100 Mbps business customer lines through to symmetric 1 Gbps lines. The line growth follows previous expansion in 2016 and 2017, during which Deutsche Telekom invested nearly €5 billion annually on its network (see “Deutsche Telekom touts fiber-optic network investments”).
Deutsche Telekom currently operates a fiber-optic network of 455,000 km, with business parks a focus of its fiber to the home (FTTH) efforts, alongside subsidized expansion activities and partnerships with competitors (see “Deutsche Telekom pilots small town FTTH”).
“Business parks are at the heart of our fiber-optic build-out strategy,” said Hagen Rickmann, Telekom Deutschland director for business customers. “We are thinking nationwide, urban and rural, north, south, east and west. The decisive factor for us is customer demand, and we are pleased to be able to offer our business customers fiber-optic lines in a further 33 communities across the country.”
“We will execute this project quickly and supply the businesses with ultramodern technology, offering them the best infrastructure for the digital transformation. The build-out continues, and our interim goal is to connect 3,000 business parks across Germany to our fiber-optic network (FTTH).”
Deutsche Telekom invests around five billion euros every year and operates Europe’s largest fiber-optic network.
The Fiber Broadband Association (FBA) has issued a very optimistic fiber deployment forecast, which calls for approximately 1.4 million miles of fiber in the top 25 metro markets in the U.S. That’s driven in large part by carriers’ 5G wireless deployment plans, which will require fiber backhaul, especially for small cells.
The FBA, formerly known as the Fiber to the Home Council Americas, promotes fiber deployment to homes, business and “to everywhere,” the organization notes in a new report titled “The Road to 5G is Paved with Fiber.”
The report also makes a case for why the FBA believes fixed 5G as the only connection to a home will not be the norm.
FBA’s Fiber Deployment Forecast:
In the report, the FBA spells out the assumptions that drove its fiber deployment forecast and cites sources for those assumptions:
- While macrocells are roughly .5 to 25 miles apart, 5G will require small cells located between 200 and 1,000 feet apart
- To deliver gigabit peak speeds to each user, the minimum downlink speed to each small cell will need to be 20 Gbps and the uplink peak data rate will need to be 10 Gbps
- 5G may require 60 small cells to cover one square mile
- The top 25 U.S. metro markets cover approximately 174,000 square miles
The 1.4-million fiber-mile forecast could be on the low side if multiple carriers want to build competing networks, the FBA notes.
Pessimistic on Fixed 5G:
“We do not believe fixed 5G to the home – as the only connection to the home – will become the norm,” the FBA argues in the new report. Tell that to Verizon and AT&T which are planning to deploy some form of 5G fixed wireless to residences.
The report’s author notes that home network connections may need to support multiple 4K and soon 8K video streams, hundreds of in-home internet-connected devices and multiple virtual reality and augmented reality (VR/AR) users, which will require higher bandwidths than can be delivered by 5G under current development standards.
Additionally, the report argues that the millimeter wave signals that will be used for some 5G deployments do not penetrate exterior walls and would require a receiver attached to an exterior wall, requiring additional hardware costs and ongoing energy and maintenance costs. It’s worth noting, though, that results from early 5G trials are showing that the technology is not as limited as wireless experts initially expected it to be and both AT&T and Verizon have ambitious plans for fixed 5G.
Separately, Cignal AI reported that North America metro WDM sales grew with increased spending by cloud and colo customers, offsetting weakness in the long-haul WDM market. Cisco and Ciena were the main beneficiaries of this shift to metro WDM, with Cisco realizing double-digits year-over-year growth related to cloud/colo shipments and growth in its NCS 4000 revenue. Significant shipments for metro WDM applications resulted in global coherent 100G port shipments exceeding 100,000 units in the quarter.
EMEA revenue dropped almost 20 percent year-over-year in 3Q17. Huawei, one of the top vendors in the region, experienced a very sharp decline and provided negative guidance into 2018. This data point, as well as others, compelled Cignal AI to reduce its forecast for EMEA for this year and 2018. Cignal AI expects to see weak spending trends among tier-1 customers in the region. Cignal AI also cut its 2018 forecast for China based on ongoing uncertainty tied to regional spending and a stall in revenue growth in 3Q17.
- Last quarter was the weakest YoY revenue growth recorded in China in over 4 years as momentum from 2Q17 spending failed to continue into the third quarter. Spending trends in the region remain difficult to predict.
- Revenue in the rest of Asia (RoAPAC) eased following breakout results in India during 2Q17 though spending remains at historically high levels.
- Quarterly coherent 100G+ port shipments broke 100k units for the first time on a global basis. 100G+ Port shipments in China were flat QoQ and are substantially up YoY
Two years ago, we reported that “Verizon has completed a field trial of NG-PON2 fiber-to-the-premises technology that could provide the infrastructure for download speeds up to 10 Gbps for residential and business customers.”
This past January, Verizon completed its first interoperability trial of NG-PON2 technology at its Verizon Labs location in Waltham, MA. During the trial, Verizon demonstrated that equipment from different vendors on each end of a single fiber—one on the service provider’s endpoint and that the customer premises—can deliver service without any end-user impact.
In an October 16th press release in advance of the Broadband Forum’s Access Summit, Verizon said NG-PON2 represent a paradigm shift in the access space and a more certain path towards long-term success.
“Technologies such as NG-PON2 present exciting new opportunities for vendors, such as delivering residential and business services on multiple wavelengths over the same fiber,” said Vincent O’Byrne, Director of Technology at Verizon.
“Not only does NG-PON2 parse business and residential customer traffic to isolate and resolve potential problems in the network, it can also scale to achieve speeds of 40 Gbps and above,” O’Byrne added.
“Technologies such as NG-PON2 present exciting new opportunities for vendors, such as delivering residential and business services on multiple wavelengths over the same fiber,” said O’Byrne. “Not only does NG-PON2 parse business and residential customer traffic to isolate and resolve potential problems in the network, it can also scale to achieve speeds of 40 Gbps and above.”
At the Broadband Forum’s Access Summit, The Verizon executive will address how the fiber access space is constantly evolving, with emerging PON technology providing solutions to some of the issues around cost and reliability during the Broadband World Forum, at the Messe Berlin on Tuesday, Oct. 24th.
Verizon has been an active participant in driving awareness about how NG-PON2 can work in a real-world carrier environment. The company completed NG-PON2 interoperability with five vendors for its OpenOMCI (ONT Management and Control Interface) spec, bringing it one step closer toward achieving interoperable NG PON systems.
The mega telco plans to offer it’s own OpenOMCI specification , which define the optical line terminal (OLT)-to-optical network terminal (ONT) interface, to the larger telecom industry.
Note 1. OpenOMCI specification was developed and is owned by Verizon, rathr than a formal standards/spec writing body like the ITU-T or Optical Internetworking Forum (OIF). Is this the new way of producing specs (like “5G” used in trials)?
Bernd Hesse, Chair of the Broadband Access Summit and Senior Director Technology Development at Calix, said:
“We will be exploring NG-PON2 in depth and the use cases that underpin the decisions to deploy them. I look forward to the debate, hearing from the experts in the industry and welcoming the community to these new Forum events.”
AT&T Expands G.fast & FTTH Deployments:
In sharp contrast to Verizon’s decision NOT to deploy G.fast, AT&T has announced expansion of its G.fast service for multi-dwelling units (MDUs) and its fiber-to-the-home network (AT&T Fiber).
The mega telco will extend its all-fiber network in two markets — Biloxi-Gulfport, MS and Savannah, GA. AT&T will also be offering its hybrid fiber-coax service for MDUs in 22 metropolitan markets.
The AT&T G.fast deployments will use “fiber runs to the telecom closet on the property, and individual coax runs to each apartment unit,” an anonymous AT&T spokesperson said to Telecompetitor.
Residents of properties served will also be able to obtain DIRECTV service without installing a dish at their individual units. Instead, the video service will be delivered over D2 Advantage, which the AT&T spokesperson described as “a centrally wired satellite dish that is shared among residents in the property.”
AT&T announced eight metro areas where G.fast can be deployed immediately, including Boston, Denver, Minneapolis, New York City, Philadelphia, Phoenix, Seattle and Tampa. In 14 other markets, consumers in target MDUs can order service now for deployment in “the near future,” the company said.
AT&T is one of multiple carriers that are looking at G.fast as part of their broadband strategy. The technology can support considerably higher speeds than DSL or fiber-to-the-neighborhood (FTTN) services – and although bandwidth is lower than it might be for a fiber-to-the-home deployment, the cost is considerably less.
The news that AT&T is deploying G.fast is not surprising, as the company already has conducted a trial of the service in Minneapolis and executives have indicated deployment plans. At this year’s Open Network Summit (ONS), AT&T’s Tom Anschutz told an audience that G.fast would improve the speed and signal quality of data transmission on older, low grade twisted pair, which is used in many MDUs and in condominium complexes (where this author lives). He hinted that market segment would be a focus area for AT&T.
AT&T is extending the reach of its fiber network:
AT&T claims to have the largest fiber network in its 21-state home broadband footprint, reaching more than 5.5 million residential and commercial locations across the 57 markets after adding over 1.5 million sites since January 1st. Plans call for extending service availability to another 1.5 million locations by year’s end, boosting the total to 7 million.
Of those 5.5 million homes and businesses now reached by AT&T Fiber, the mega telco said it has signed up more than 2 million broadband subscribers. The company did not, however, break out how many of those subs are new ones, as opposed to DSL customers who have been upgraded to the new FTTH network.
However, the mega telco ranks #1 on Vertical Systems U.S. Fiber Lit Buildings (Fiber to commercial buildings) leaderboard:
Verizon will forgo using copper-based G.fast (DSL) technology in favor of an all-out move to deploy fiber-to-the-premises (FTTP) to/from multiple-dwelling units (MDUs), according to Vincent O’Byrne, director of network planning for Verizon. Mr O’Byrne spoke August 15th at ADTRAN’s Broadband Solutions Summit in Huntsville, AL.
“Our strategy for G.Fast is not to deploy it,” O’Byrne said at the conference.
“The strategy we’re using today is fiber all the way to the living unit,” O’Byrne said. “There’s some small percentage that we use fiber to the building (FTTP) and then copper inside the building itself, but because we have two vendors on BPON and on GPON meant in those units we had 8 types of different MDU units.”
O’Byrne cited the sketchy nature of the copper network in some places and a history of VDSL2 inter-operability and speed related problems in MDUs.
“The MDU units started to go end of life and for VDSL2 there wasn’t any interoperability,” O’Byrne said. “Even though we worked on it for a year, it became nuisance so we stopped using those common ONTs and concentrated on getting fiber to the living unit.”
Speed is also an issue. “We ended up in a situation where the 13 units of VDSL2 were going end of life as well as lower speed down the surrounding Fios network, which could get up to 1 Gbps,” O’Byrne said. “With G.fast we see ourselves potentially being in the same situation five years from now where we would have to replace the same thing.”
O’Byrne said that bringing fiber directly to each premises is more of a future proof strategy. “It’s a bit more expensive to put the single family unit fiber connections out there, but we have the same kind of service as the rest of the network,” O’Byrne said. “We also found that the trouble report rate is less on the fiber all the way to the living unit.” That’s in sharp contrast to the hybrid fiber-copper technology used by AT&T in its U-Verse triple play bundle (which this author has had for almost 5 years).
Given the diversity and varying condition of copper plant in Verizon’s wider nationwide network, Verizon has applied its copper replacement strategy for the MDU markets.
In recent years, Verizon has been strategically replacing aging copper plant with fiber at its consumer and business locations. The service provider said that this method enables it to reduce costs by not having to perform multiple customer visits when problems arise.
Verizon has been replacing aging copper plant with fiber at its consumer and business locations. Fios to residential triple play customers was the first step, with fiber to commercial buildings and MDUs now well underway.
“At Verizon we were finding the trouble reports on the copper were two to three times more than when we had fiber to the living unit,” O’Byrne said. “For a long time, the copper plant in the Verizon network was not as good as it was in some locations so if we went to G.fast it would be low volume and we would have the same issues five years down the road.”
“We’re skipping XGS-PON single wavelength,” said O’Byrne. “We’re going for a 10G tunable laser solution.”
O’Byrne said driving costs lower and providing a unified architecture that’s inter-operable across multiple equipment vendors are key goals for their strategy. He also mentioned solutions that can maximize use of Verizon’s extensive and somewhat disparate outside wiring plant environment.
Vertical Systems Group (VSG) ranked the leading providers of on-net fiber business connections as of the end of 2016. The research group said that retail and wholesale fiber providers with 10,000 or more on-net fiber-lit commercial buildings in the U.S. qualify for this new benchmark.
VSG’s 2016 U.S. Fiber Lit Buildings LEADERBOARD list includes a mixture of traditional telcos, cable providers and a competitive carrier: AT&T, Verizon, Spectrum Enterprise were the top three followed by CenturyLink, Comcast, Level 3, Cox, Lightower Fiber Networks, Zayo, Altice USA and Frontier.
The Challenge Tier of fiber providers includes companies with lit fiber connections to between 2,000 and 9,999 U.S. commercial buildings. Seventeen companies qualified for the 2016 Fiber Lit Buildings Challenge Tier as follows (in alphabetical order): Cincinnati Bell, Cleareon, Cogent, Consolidated Communications, Electric Lightwave, Fairpoint, FiberLight, FiberNet Direct, FirstLight, IFN, Lumos, Southern Light, Sunesys, Unite Private Networks, Uniti Fiber, Windstream and XO.
Rosemary Cochran, principal at Vertical Systems Group, said the criteria for the leader board list was for network service providers to have fiber installed and fiber transport equipment ready to serve business customers.
“This is commercial buildings and data centers that have fiber in place and there is active service equipment that enables provisioning of commercial services,” Cochran said. “We’re not counting residential fiber or standalone cell towers.”
Cochran added that VSG is not counting near-net buildings where service providers may be passing buildings with fiber but have not connected them yet. “It is either lit or not lit,” she said.
“On-net fiber lit buildings are valued strategic assets that give retail and wholesale providers a competitive edge in profitably delivering services to business customers. A major benefit of a fiber lit building is ready connectivity with provisioning through service orchestration, without the construction cost and extensive lead time required to light a building,” Cochran added.
Acquisitions of Fiber Providers happening this year:
“These dynamics are driving this year’s acquisitions among fiber providers that will significantly impact the U.S. fiber landscape. Eighteen of the twenty-eight Fiber LEADERBOARD and Challenge Tier companies have fiber-related transactions just completed or pending.”
One of the largest out of this group is CenturyLink’s pending deal for Level 3, one that will enhance the telco’s on-net fiber footprint.
CenturyLink’s Level 3 acquisition will increase its reach by nearly 75% to approximately 75,000, including 10,000 buildings in EMEA and Latin America, giving the telco a larger footprint to deliver Ethernet and software-defined services.
By purchasing XO, Verizon gained metro fiber networks in 40 major U.S. markets with over 4,000 on-net buildings and 1.2 million fiber miles.
Cochran said that since a number of these deals have not been completed it remains unclear as to what effect they will have.
Crown Castle, which will gain an additional 22,000 buildings, stands out from the crowd since the service provider has been operating the fiber providers it has bought as separate companies.
However, other pending acquisitions being made by Consolidated Communications, Cincinnati Bell and newer players like Uniti Fiber will have an effect.
Consolidated Communications, which will announce its second-quarter earnings tomorrow, recently completed its acquisition of FairPoint. By acquiring FairPoint, Consolidated immediately established itself as the ninth largest fiber player with a presence in 24 states and 8,000 on-net buildings. This greater density will enable Consolidated to pursue more dark fiber and lit Ethernet service opportunities with a larger mix of business and wholesale customers.
“Out of the companies on the leader board, 18 of them either already completed acquisitions or some are pending,” Cochran said. “Because a lot of deals happened in July with some that are pending such CenturyLink/Level 3, they are not reflected here.”
Strategic importance of Fiber Assets to deliver business services:
Regardless of when these deals are completed, Cochran added that they show how having a large arsenal of fiber is important to compete for business services.
“There’s a lot that happened in the first half of this year and that’s going to shake things up,” Cochran said. “Just the fact that you have more than half of these companies involved in some kind of transaction shows the value of fiber.”
On the fiber leaderboard, 7 service providers have an ongoing spot on VSG’s Carrier Ethernet Leaderboard report. These providers include: AT&T, Verizon,Spectrum Enterprise, CenturyLink, Comcast, Level 3, and Cox.
Cochran noted that the presence of fiber has coincided with the growth of Ethernet in the domestic U.S. market.
“Fiber-based Ethernet is the most widely deployed technology,” Cochran said. “As those upgrades take place, one of the drivers is trying to get more bandwidth so there’s a correlation between higher bandwidth services and having that fiber in the building.”
“Wholesale services are also a big driver, which becomes a question of service provisioning. The work that’s being done at the MEF on inter-carrier provisioning and service orchestration across carriers to automate it with standard APIs would help to accelerate new services,” she added.
Other Fiber Providers:
All other fiber providers with fewer than 2,000 U.S. commercial fiber lit buildings are in the Market Players tier. The 2016 Market Players tier includes more than two hundred metro, regional and other fiber providers, including the following companies (in alphabetical order): Alpheus, Axia, Birch, C Spire, Centracom, Conterra, DQE Communications, EarthLink Business, Fatbeam, Global Capacity, GTT, Hawaiian Telecom, Hibernia, Hunter Communications, Independents Fiber Network, Infostructure, Logix Communications, LS Networks, Mediacom, Monmouth Telecom, Orca Communications, Pilot Fiber, PS Lightwave, Shentel, Silver Star Telecom, Sovernet, Spirit/Palmettonet, Syringa, TDS Telecom, TPX Communications, U.S. Signal, Veracity, Wilcon, WOW and others.