Uruguay's Antel expects to connect another 250,000 homes in 2014 to its new FTTH network. Image: Antel.
Report: Mobile may be key, but other broadband connectivity options remain vital
Author: Stewart Schley
When Uruguay’s state-owned telecom provider Antel made a big commitment to fiber optics for Internet delivery, it backed its investment with a sweet consumer deal: high-speed, fiber-to-the-home connectivity for monthly prices that are cheaper (or at least no more expensive) than what customers had already been paying for relatively slow, copper-based DSL service. Not only that, but those who upgrade to fiber are free to revert to the old network if – hard to imagine – they don’t love the new network.
Not surprisingly, the gambit seems to be working. The country’s ambitious effort to upgrade its broadband infrastructure is quickly winning converts. As of mid-2013, 145,000 homes had switched to the FTTH network – about 30% of the first group of homes passed by the upgraded network – and more are climbing aboard weekly. Provider Antel projects another 250,000 homes will be added to FTTH this year.
Uruguay’s migration to FTTH is part of an orchestrated strategy to upgrade high speed Internet connectivity and adoption in a nation of 3.4 million people that already ranks among the top Latin America countries in broadband penetration and in affordability, according to this Cisco report.
It’s also evidence that, contrary to widely shared presumption, cellular data networks aren’t the only path to wider broadband delivery across the world. That’s according to an October 2013 report by Diffraction Analysis of Colombes, France.
The firm’s Chief Research Officer Benoît Felton, who examined non-traditional broadband deployment initiatives in six countries for the report, labels as “misguided” the notion that cellular networks will emerge as the only legitimate source for broadband in developing nations.
“There is no single model for all developing economies to boost connectivity," Felton writes. "The most relevant models will be largely dependent on local factors like the current state of the telecom market, the existence of backbone infrastructures, the positive (or negative) incentives contributed by regulation and the willingness and ability of national and local governments to subsidize or invest in infrastructure deployment.”
A wider view of broadband delivery possibilities is important in a world where only about 39% of the global population uses the Internet, according to a 2013 International Telecommunications Union estimate. Although cellular data networks have a huge role in expanding access, they’re not the only avenue to supply connectivity. Felton points to six examples, mixing both private and public investment models, where providers have applied various blends of Wi-Fi, satellite and fixed/wireline access to broaden the reach of broadband.
Among conclusions he draws:
Backbones matter. “Without a backbone, little or nothing can happen in the last mile to consumers. If this is identified as the main hurdle for access investment, then this is where public intervention should be primarily focused.”
Private investment should be encouraged. “Public funding, when used, should be structured to incentivize and catalyze private investment unless the government has the ability and willingness to deploy a fully publicly-owned national broadband network.”
Wireline solutions shouldn’t be overlooked. “While there is little doubt that wireless will be the main component of access expansion in most developing countries, there is a case to be made for faster and more stable wireline access to be deployed, either selectively in certain sub-markets or more broadly if legacy market players haven't addressed the wireline market.”
Regulation should allow for more entrants. “In some markets regulation is still a stifling factor, particularly where regulation is used to favor incumbents and/or where the regulator is captured by the incumbent.”
Citing the case of Networx, a Bulgerian ISP, Felton notes that another impediment is obtaining rights-of-way: “The fact that Networx did not have to pay for expensive rights of way or even worry about getting administrative clearance to deploy its wireline infrastructure was a key aspect of their early success and allowed them to grow with limited capital requirements.”