International. Service providers have significantly expanded their outdoor broadband networks in recent years, as competition and high user demand have led to huge fiber optic developments.
However, much of that work has been completed or is underway around the world, and with a broad reach of wireless 5G technology (and renewed demand for fiber extension) in a couple of years, the outlook for 2019 is less certain for network operators and their providers. But there is more, there are also trends that affect the outdoor broadband network and technology needs for the coming year.
Reduced competition in North America
In 2019, service providers are expected to meet their customers' data consumption needs by leveraging their existing FTTH networks or upgrading existing infrastructure by using a hybrid coaxial fiber optic (HFC) cable and a combination of remote PHY and DOCSIS 3.1. While these are not necessarily new technologies, for Ric Johnsen, Senior VP, PLM Outside Plant Solutions at CommScope, they respond to the general pause recently observed in the growth of outdoor broadband networks in North America. "Although service providers have not experienced the data consumption they saw in the last three to four years, they are expected to implement more of these solutions to continue to meet subscriber needs without conducting a complete overhaul of their networks."
While the growth rate of data consumption has slowed, a relatively calm competitive environment is also sighted and is expected to continue in 2019. Over the past few years, operators have invested heavily to keep up with large competitive initiatives, such as AT&T's requirement to spend 12.5 million homes on fiber and Google's efforts to build its own fiber-optic networks in various cities. Both factors stimulated high demand for fiber, but as competitive initiatives have declined in recent years, other service providers are less inclined to be aggressive in fiber deployments.
"Another reason for the reduction in competition is that there are fewer competitors in the North American market due to consolidation. Charter, Time Warner and Bright House were consolidated into a single company; Suddenlink and CableVision consolidated into Altice; and AT&T bought Time Warner in June 2018. Operators are still preparing for a fiber deployment onslaught that supports 5G, but it won't start broadly until 2020," added Ric Johnsen.
FTTH expansion in Europe and limited growth in other regions
Some of the big trends outside the U.S. for 2019 include fiber-to-the-home (FTTH) deployments, pluggable and hardened connectivity solutions, lack of growth, and consolidation. In Europe, for example, government directives, grants and subsidies are encouraging the development of FTTH, so there will be a further increase in the expansion of fibre optics in the UK. Similarly, Germany is scheduled to begin its FTTH development in 2020, France is halfway through its fiber expansion and Spain has completed most of its projects in major cities. So, by driving fiber deployments in a bigger way, you'll see much more controlled growth because it's government subsidies, not competition, that are driving growth.
Outside of the United States, there is a need for plug-and-play technology, as speed of deployment and shortage of skilled labor become a bigger problem with larger deployments. This helps reduce the first total installed cost of these deployments and allows aggressive deadlines to be met.
Similarly, there is a greater need in 2019 for reinforced connectivity, which has proven to be as resistant, or even more, than spliced connectivity. Some major storms, such as Hurricane Helene in Ireland, have hit areas where there is stronger connectivity and there was no damage to these networks. Some vendors don't like the limited number of providers of rugged connectivity equipment they can use, so they stick to older techniques, but in general, vendors will look for connectivity and hardened indexed fiber to get the reliability, speed of deployment, and labor costs they need.
"Latin America, Southeast Asia, the Middle East and Africa are potential markets, but operators' unwillingness to invest and delayed projects will continue to hold back growth in 2019," said Ric Johnsen. "The availability of skilled labor is another barrier to growth. But there are a few points to highlight in these markets:
Mexico is deregulating its market, and we are seeing Telmex talk about several million homes being approved per year in the foreseeable future.
In Puerto Rico, Liberty Global spent 100,000 homes with fiber as part of its reconstruction after Hurricane Maria."
As in North America, consolidation will be another trend that will reach these international markets. In Mexico, América Móvil continues to acquire service providers in Central and South America, and Telecom Italia and Spain's Telefónica are acquiring providers in Latin America.
The calm before the 5G storm
Deployments associated with cellular network densification have not yet begun, but are expected to do so in 2019, although extensive 5G development activity is not expected to begin until 2020. With these changes there will be significant growth in the development of fibers for small cells. In the past, operators faced permitting challenges: although they had the manpower and materials available for cellular densification, local governments delayed deployments. As a result, the fiber is built to support fronthaul and backhaul for small cells delayed until cellular network densification can begin in earnest, which will happen in 2019.
There is no doubt that 5G wireless connectivity will be the main growth engine for multiple service providers in 2019 and beyond. There will be a magnitude of cell sites needed than we have today, and many of them will be small cells; however, most deployments in the coming year will be test sites, validating the architecture and methods before full deployment.
We will also need more fiber to connect small cells, as they may require 4 to 12 and in some cases up to 24 fibers per site. Finally, 5G will see the advent of truly converged wireless and wired networks, and vendors will need to offer a total infrastructure solution that covers both. "As we approach 5G next year, it will begin to create a new level of competition between service providers for lit fiber and dark fiber services towards small cells, as well as competition between operators for all things connected.
So while global markets are relatively quiet for now due to fiber saturation and declining competition, I think we'll see frenetic activity again starting in 2019, when operators offer converged and wireless network infrastructure for 5G. Enhanced connectivity technology will continue to gain popularity, while improvements resulting from deployment speed will be important as the market rushes to support the next wave of outdoor networking."
Leave your comment