blog, I said that multiple system operator (MSO) networks
have continued to evolve, and are ripe to provide competitive and compelling
services. The robust nature of hybrid
fiber coax (HFC) networks, paired with an evolving DOCSIS
capability, will provide gigabit downstream services from today forward. That said, some subscribers are in need of
symmetrical service, and some are in areas planned for fiber networks.
In my next few blogs, I
will lay out strategies for MSOs to use in preparing to evolve their HFC
network toward a network that can provide the symmetrical capabilities of fiber
in a cost effective way.
First Strategy: Determining When and Where to Transition
FTTH networks undeniably
provide great reliability and capability.
That said, network installation of any type has an associated cost. Considering the costs relative to the build area,
competition and anticipated customer demand can provide some good insight into
the best network to deploy.
- A brownfield area with existing HFC services
will, by nature, have the highest differential cost associated with network
installation, since the HFC network is already in place, and FTTH is fully
incremental. In this scenario, it would
appear that only the highest levels of customer demand or competitive pressure
would drive a move to FTTH.
- Extension areas where there are existing HFC
surrounds are a bit more complex. The
greenfield nature of an extension would lean toward FTTH, but the cost of
extending fiber deep into an existing HFC area may drive the economics more
toward HFC. Competitive and demand
drivers are more impactful in this scenario.
Medium demand or competitive presence may tip the decision toward FTTH.
- In a greenfield area where facilities are open, the
costs of FTTH networks have been on par
with HFC networks—or maybe even a little under.. This comparison can vary somewhat with
density, but in general, first costs in a greenfield area are similar. For this reason, whether demand or
competitive presence is high or low, FTTH
is often chosen for greenfield builds today.
- One final and special case is apartment
buildings (multi-dwelling units) and commercial buildings. These areas are often high on the competitive and demand scale, and offer density that
favors FTTH installation.
The graphic shown here depicts
how differential cost in each build area may interact with competitive forces or consumer demand to drive a build
decision. Bear in mind, the cost curve
is far from static, and solutions exist that may drive the curve much lower,
moving the decision point along with it. Bottom line, if you weigh build area
and differential costs against demand and competitive presence, the where and
when to transition will become clear.
In my next blog, I’ll
discuss the second strategy to evolving HFC networks when specifically building
multi-dwelling units, or MDUs. In the meantime, tell me what you think about
brownfields and greenfields – what makes sense to you?