iSuppli: Wideband Telco Subscribers to Quadruple by 2014

  • Bandwidth
  • FTTH
The number of subscribers to telco services such as fiber to the home and VDSL will rise at more than triple the rate of ADSL during the next few years, according to broadband market research firm iSuppli Corp.

isuppliWideband telco services subscribers are forecast to rise to 281 million in 2014, expanding at 30.9 percent per year from 73 million in 2009. ADSL subscribers will grow at only 8.4 percent per year during the same period, reaching 458 million in 2014, up from 305 million in 2009.

The telco broadband market is undergoing a seismic shift as ADSL gives way to wideband services such as FTTH and VDSL. Although ADSL will continue to dominate telcos’ broadband installed bases for years to come, subscribership has begun to contract in many developed countries, such as the United States, Japan, Korea, Canada and Germany.

Rising competition is compelling the telcos to turn to wideband technology. Telcos are facing stiff competition from competitive access suppliers, cable providers and wireless operators. This competitive pressure, which has resulted in stagnating revenues and subscribers' eroding by as much as 10 percent per year, has caused telephone companies to rethink their residential business. Nearly all carriers, as well as competitive access suppliers, have chosen to deploy value-added services, such as IPTV, in combination with voice and data to stop subscriber erosion and to increase subscriber average revenue per user (ARPU).

IPTV has proven successful with subscribers, but telcos plan to offer other services, including 3D HDTV, cloud-based DVR, distance learning, video telephony, home automation and remote home networking management.

ADSL can deliver downstream rates of up to 24 Mbps, depending on distance. VDSL can deliver in excess of 100 Mbps, though the rate falls off rapidly after a relatively short distance - measured in hundreds of meters - and eventually matches ADSL rates. FTTH can support speeds up to 1 Gbps or more over tens of kilometers.

Telcos’ shift toward wideband will generate significant new opportunities for OEMs and component suppliers. VDSL equipment factory revenue is expected to increase at a 32 percent rate from 2009 to 2014, while FTTP is expected to grow at 21 percent per year.

However, OEMs and component suppliers face many questions as they ponder their transition to wideband, including which technology they should invest in, when should they invest and which regions should they focus on. Each of these service offerings demands increased bandwidth in the service provider’s access loops.

Telcos now have almost 340 million ADSL loops in service worldwide, most of which cannot support the increased bandwidth required both downstream and upstream to support the potential value-added services that telephone companies would like to offer.

In the United States, carriers will need to support the simultaneous transmission of multiple HDTV data streams to the home, requiring a very large amount of bandwidth. For some telephone companies in Asia and Europe, the need is to transmit two standard-definition television channels - which, in some cases, they can meet with existing ADSL networks.

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