Global Scenario: Surge in growth in fibre-based networks OFC Networks in India, August 31, 2012
The key growth in optic fibre cable (OFC) networks is likely to pick up pace over the next few years as the broadband market takes off. The launch of 3G and broadband wireless access services will act as the key growth drivers for OFC. tele.net recently organized a conference, OFC Networks in India, to examine the market opportunities and discuss key issues and challenges. The following section on Global Scenario brings forward the views of Jaideep Ghosh, Partner, KPMG Advisory Services …
Over the next few years, data traffic on wireless devices is expected to increase significantly, surpassing that on wired devices. According to KPMG, global mobile data traffic will witness an 18-fold increase between 2011 and 2016. Similarly, the annual global IP traffic is expected to increase by three times over the next five years, crossing the zettabyte threshold by 2016.
These factors will drive the growth of fibre-based networks. Currently, fibre is used in telecom networks, power transmission systems and undersea cables. Going forward, this medium will be widely used in fibre-to-the-home (FTTH) networks, next-generation telecom and enterprise networks, and smart grids for power supply.
Another demand driver for fibre is the increasing data usage by consumers and businesses. According to KPMG, the number of devices connected to IP networks by 2016 will be three times the global population. More than half of this traffic is expected to be generated by applications requiring high bandwidths.
The key demand drivers for fibre in India include the increasing penetration of smart devices and growing data traffic; deployment of next-generation networks; adoption of advanced technology solutions to decongest telecom networks; and the increasing deployment of FTTx.
Key demand drivers
Increasing penetration of smart devices
Growth in data usage is being primarily driven by the increasing uptake of smart devices. KPMG analysed data revenues as a percentage of total revenues in select countries in the Asia-Pacific
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Global Scenario: Surge in growth in fibre-based networks OFC Networks in India, August 31, 2012
region. In India, the share was less than 1 per cent, highlighting the limited uptake of smartphones. New Zealand, Taiwan and Malaysia showed higher uptake with data revenues comprising 20 per cent of total revenues. This share was the highest in Singapore at over 60 per cent.
Globally, smartphones comprise about 27 per cent of the global handset shipments and this share is likely to increase to over 40 per cent by 2015.
Increasing data traffic
Bandwidth-intensive ap-plications are expected to drive the deployment of fibre networks. Trends in developed countries highlight that mobile handsets are being increasingly used for such data-intensive applications.
For example, data usage by O2 subscribers in the UK highlights that 19 per cent of subscribers use their devices mainly for web browsing, 14 per cent use them for social networking, 12 per cent for listening to music, 11 per cent for gaming and 9 per cent for making calls.
Deployment of next-generation networks
According to UBS, there has been an increase in the deployment of networks based on advanced technologies. For example, globally, 17 long term evolution networks were deployed in 2010 as compared to 47 in 2011. This is expected to increase to 134 by end-2012.
Also, WCDMA networks are being upgraded to HSPA, with speeds of 7.2 Mbps, 21 Mbps and 42 Mbps. According to Ericsson, the majority of global networks have been upgraded to HSPA with speeds varying from 7.2 Mbps to 42 Mbps.
Adoption of advanced technology solutions
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Global Scenario: Surge in growth in fibre-based networks OFC Networks in India, August 31, 2012
Technologies such as femtocells and outdoor distributed antenna systems are being increasingly deployed at telecom sites.
Increasing FTTx deployment
According to KPMG, $45 billion is expected to be spent on FTTH deployments by 2017. Currently, North America and Western Europe account for about 30 per cent of the global OFC demand, which is primarily driven by FTTx. Also, the need to upgrade legacy networks is driving FTTx deployments in several developed countries.
OFC in India
In India, the telecom sector accounts for the majority of the OFC demand. Currently, the country’s fibre networks aggregate a length of 1.5 million route km. The majority of this network has been installed for telecom-related use.
India’s annual fibre requirement is about 10 million km, which is 5 per cent of the global demand. Going forward, operators will migrate to next-generation networks and deploy networks for 3G and 4G, which will drive the demand for OFC.
Tower companies and enterprises are also looking to deploy fibre on a larger scale. While tower companies are actively looking to replace microwave with fibre for backhaul, enterprise customers need fibre to keep pace with the growth in internet traffic and for expanding their data centres.
In India, FTTx deployments are still at a nascent stage, with only a few players evaluating large-scale projects. A comprehensive approach can help in increasing the use of fibre in the country. From the policy viewpoint, the government should simplify the procedures related to right of way and promote broadband uptake through a mix of wireline and wireless technologies.
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Global Scenario: Surge in growth in fibre-based networks OFC Networks in India, August 31, 2012
Companies requiring fibre need to ensure that resources are allotted optimally. This is crucial to determine the deployment levels of FTTH, fibre-to-the-curb and fibre-to-the-building networks, and avoid infrastructure duplication.
Also, there is an urgent need to create demand for broadband. This can be achieved by developing applications, rural-specific consumer devices and software as well as setting up kiosks.
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