Emerging Fiber

I have already written on the case for FTTP in emerging markets. I’ve only been in India for two days, visiting FTTP installations and meeting with the players involved (or not yet involved) but already thoughts are shifting as the reality of the field adjust my worldview.

This is, essentially, how I see the various FTTP business cases in emerging markets:

FTTP is an opportunity to go after the lucrative TV distribution market: in most emerging markets, premium TV is distributed mostly by satellite and IPTV over copper is not an option due to the poor quality of the copper. Because of the costs associated with buying a satellite dish, the addressable market for premium TV remains considerable. FTTP can be a way for telcos to aggressively move into that market. This is (in my opinion) Algeria Telecom’s true reason for considering a 2m home deployment of FTTP.

Greenfield deployment follows the real estate boom: in many (though sadly not all) emerging markets, a middle class has been forming for a number of years and is now ready to move into accomodations that offer all the modern comfort that we are used to in the west. In many markets the real estate developers are building project after project of mid-sized appartment blocks. FTTH can be deployed there instead of copper at no extra-cost to service providers (and in some neutral models, significant savings). This is what Radius Infratel is doing in India.

Business and Mast deployments are a crucial complement: In developed markets fiber to the business and fiber to the mast have largely been separate from FTTP initiatives (whether that makes sense or not). In emerging markets it seems like the virtuous business model will consider all three targets (end-users, businesses and masts) simultaneously. Fiber to the Mast is particular is clearly an opportunity in markets where mobile broadband is growing so fast that telcos are already wondering how they will cope with the demand. I don’t have any visible example of this strategy being put to good use, but I suspect a number of players must be considering it.

There are other aspects, of course, like the relative higher importance (and price sensitivity of customers) to smart metering in countries where energy and water can often be in short supply and comparatively expensive, although it’s probably a little too early for this to be a real driver yet.

Still, I’m more convinced than ever that there is a wider case for FTTP in emerging markets than is commonly accepted. I will probably devote some more research time to this in the first half of this year in order to refine these arguments and put some numbers behind them, but be warned: the thought process has begun…