New fibre-optic connections overtake cable

Over 4.2 million fibre-optic broadband subscribers were added worldwide in Q1 2008

New fibre-optic broadband connections have exceeded those of cable for the first time, according to research from Point Topic.

Over 4.2 million fibre-optic broadband subscribers were added worldwide in the first three months of 2008, compared to 2.5 million cable connections.

"This is a significant milestone for fibre-optic broadband. Where it is available consumers will take fibre over other broadband technologies," said Oliver Johnson, chief executive at Point Topic.

Some had expressed doubts that consumers would find the additional speed necessary or attractive, but the evidence suggests that users crave the extra bandwidth.

However, it seems that value for money, rather than pure speed, is the driving force behind the switch to fibre-optic.

"If you look at the cost per megabit per month, DSL comes in at around an average $20. Cable does better at roughly $12, but they are both eclipsed by fibre which can get as low as 50 cents," said Johnson.

There are sizeable variations depending on country, region and operator, but a rule of thumb is that DSL can cost 15 times as much as fibre for one megabit of bandwidth, and cable is seven times as expensive.

Point Topic found that the growth in fibre numbers is being driven by China, Japan and South Korea, where cable and DSL are losing subscribers to fibre technologies.

Although interest is high in the US, UK, France and Germany, low availability is equating to low adoption.

"There are problems in the deregulated markets when it comes to major infrastructure investment. Fibre deployment is expensive and in the US and Europe there are significant regulatory hurdles to overcome," said Johnson.

The analyst explained that it is difficult to persuade operators to make the necessary commitment when they cannot guarantee a return.

"In most Western markets regulators frown on monopolies and it is very difficult to sanction government expenditure given the self-imposed legal frameworks," he said.

"Without some form of centralised funding, however, it will be a long time before consumers in these markets get access to cheaper bandwidth."