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Technology Mix: Global trends in broadband

September 02, 2014

The global broadband market has evolved considerably over the past decade, both in terms of number of subscribers and technology mix. According to statistics from the International Telecommunications Union, with 2.3 billion mobile broadband subscriptions, global mobile broadband penetration has reached 32 per cent. This is double the penetration rate in 2011 and four times that in 2009. In contrast, fixed broadband penetration growth is slowing down, especially in developing countries, with just 3.5 per cent growth expected in 2014 as against 4.8 per cent in 2011.

Although the mobile broadband market has the larger share of the pie, optic fibre-based broadband technology is increasingly being deployed by developing countries to provide internet access in rural and remote areas.

tele.net takes a look at the technology trends in the global broadband market...

Copper lines

Copper-based or digital subscriber line (DSL) networks, including asymmetric digital subscriber line (ADSL) and high speed digital subscriber line (VDSL), have historically been the dominant form of fixed broadband technology globally. ADSL technology was introduced in 1999, enabling data transmission over copper telephone lines delivering broadband speeds of around 2 Mbps over a distance of around 6 km. This technology, however, suffered from issues of signal degradation that occurred over distances due to resistance in the copper line.

A variant of DSL technology, ADSL2+, which extended the signal frequency band from 1.1 MHz to 2.2 MHz and increased the maximum downstream rate to 24 Mbps, was developed in 2003. The actual speeds delivered through this technology were also impacted by a variety of factors, including line length, cable size, service type and house wiring. Another variant, VDSL, was developed in 2004 as the third generation of DSL access technology, designed to support the wide deployment of triple-play services such as voice, video, data, high definition television and interactive gaming. VDSL was rolled out at the same stage as ADSL2+, and it delivered download speeds in excess of 50 Mbps.

ABI Research’s Broadband Carriers and Revenue report states that the global DSL broadband market had around 378 million subscribers in 2013. However, the subscribers and revenues have shrunk on account of the increasing deployment of high speed fibre-based technologies. The same report states that the global DSL broadband service revenues declined by about 2 per cent in 2013, primarily on account of the declining subscriber base and ARPUs in Asia Pacific.

The copper-based broadband market is now shifting towards VDSL2 Vectoring and G.fast technologies. Although VDSL2 (an upgradation of VDSL) had the potential to reach transfer speeds of 100 Mbps, noise among the lines in a cable reduced the performance of this technology. Both VDSL2 Vectoring and G.fast technologies employ noise cancellation that enables operators to significantly increase the speeds offered, as against their existing copper infrastructure. G.fast, a technology still under trial, uses vectoring to achieve noise cancellation, and is also expected to work on higher frequencies to achieve speeds beyond 200 Mbps. Therefore, if VDSL2 currently works on 17 MHz or 30 MHz, G.fast will work on 106 MHz or even 212 MHz.

In 2014, Broadbandtrends conducted a global survey of telecom service providers regarding their plans to deploy VDSL2 Vectoring and G.fast. Amongst these operators, 57 per cent are actively deploying VDSL2 Vectoring technology at present, or are at the trial stage and plan to deploy the technology by the end of 2014. Moreover, about 42 per cent of the surveyed telecom operators are currently evaluating the deployment of G.fast technology while 52 per cent are unsure of its impact on VDSL2 Vectoring deployments. According to the survey, the top global vendors for deploying VDSL2 vectoring technology are Alcatel-Lucent, Huawei and ADTRAN.

Fibre-based broadband

Fibre-based broadband technologies have emerged as the most popular high speed broadband access medium in the wireline space. In this technology, data is transferred through optic fibre cables (OFCs), which comprise individual fibres of silica glass. Unlike copper, each fibre’s signal is always reflected back to its centre, thereby leading to very little loss in signal and reduction in speed, regardless of distance or even corners. According to the Federal Communications Commission, US companies providing optic fibre internet connections offer 117 per cent of the advertised speed during peak times, greater than that of DSL.

The primary challenge for telecom operators in deploying OFC is the high capex involved in installation. However, as the cost to maintain ageing copper networks increases over time, operators are opting to upgrade to OFC. Increasing consumer demand for faster broadband has also pushed service providers to shift to OFC networks.

ABI Research’s quarterly report states that the optic fibre broadband segment grew at a rate of 29 per cent in 2013 to reach 126.6 million subscribers. Accordingly, optic fibre broadband service revenues also grew over 15 per cent to $46 billion in 2013. Operators such as the UK-based BT Group and Russia-based VimpelCom reported that growth in their OFC broadband customers contributed significantly to the overall service revenue growth in 2013. The report further estimates that by 2019, optic fibre broadband is expected to reach 265 million subscribers at a compound annual growth rate of 11.7 per cent.

The recent advancement in OFC is the 40 GB gigabit passive optical network (GPON) technology which can offer transfer speeds of up to 40 Gbps. Recently, the Etisalat Group and Huawei Technologies signed an agreement to test the 40 GB GPON technology across Etisalat’s networks in the UAE. The companies have previously worked together to test a 10 GB GPON in 2010. The faster variant of GPON is based on a time and wavelength division multiplexed approach, and its prototype has only recently been released by Huawei.

Mobile/Wireless broadband

The need for mobile broadband has grown over the years due to the widening gap between fixed broadband subscribers and mobile users. As per a recent Ericsson Mobility report (June 2014), this trend is set to continue with mobile subscribers across the globe expected to reach 9.2 billion by 2019 and fixed broadband subscribers reaching only 1 billion during the same period.

In terms of technology, mobile broadband has evolved from the deployment of general packet radio service (GPRS) in the 1990s to developing high speed downlink packet access (HSDPA) technology as an improvement in 3G technologies, to the launch of long term evolution (LTE) technology across the globe in the past few years. 2G or GPRS technology was built on the Global System for Mobile Communications (GSM) network platform to support peak download data rates of up to 115 kbps, with average speeds of 40 kbps to 50 kbps. In the next step towards high speed 3G technologies, HSDPA was developed in 2006 to support downlink speeds of up to 7.2 Mbps. Following this, LTE technology was released in 2008 as the first step towards 4G technologies, supporting downlink peak data rates of up to 326 Mbps. In the wireless broadband segment, the dominant technology remains evolution-data optimised, which offers a speed of between 2.4 Mbps and 3.1 Mbps.

As per the Ericsson Mobility report, 2G subscriptions still represent the largest share of mobile subscriptions. This is predominantly due to the stronger effect of developing countries, where users opt for low-cost mobile phones and subscriptions. In contrast, the developed world has more rapidly migrated to more advanced technologies, resulting in a decline in their GSM-only subscriptions. The report further suggests that despite this movement, 2G will continue to dominate the market in the coming few years as it will take time for the developing countries to upgrade to higher technologies. Thus, GSM networks will continue to play an important role in complementing high speed packet access (HSPA) and LTE coverage in all markets.

LTE subscriptions are estimated to reach about 2.6 billion by 2019, constituting about 30 per cent of the total mobile subscriptions (9.2 billion). Meanwhile, global mobile broadband markets have already entered the next phase of development, as HSPA subscriptions are predicted to reach 4.5 billion by 2019, overtaking GSM subscriptions.

Conclusion

In sum, due to the rising demand for high speed internet services, technological innovations have taken place across both fixed and mobile broadband segments. Although copper-based networks are saturated, telecom service providers are looking to improve transfer speeds on these networks by deploying noise cancellation technologies. Fibre has become the preferred choice over copper-based networks on account of its higher speed advantage. Mobile broadband has also entered its next phase of development with subscribers increasingly shifting towards 3G and 4G technologies owing to the increase in smartphone penetration. With this increase in broadband penetration and improved speeds, these technologies are set to play an important role in driving social and economic growth across geographies.

 
 

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