It's the time of year when analysts polish their crystal balls, stick out their necks and predict what will happen in the coming months. Trends that emerged in 2019 will become prominent in 2020. The telecom industry never has boring years -- and 2020 will be no exception.
Broadband World News asked me to select three trends or technologies I think will impact fixed-access broadband operators most in the next 12 to 18 months. Here they are:
10G PON by default
10G-xPON (XGS-PON, 10 G-EPON and NG-PON2) are becoming the new xPON (GPON and G-EPON). Following the industry's usual experience curves, the relative cost difference between xPON and 10G xPON opto-electronics diminished to irrelevance in 2019.
Between 20% and 30% of OLT ports shipped in Q3'19 were 10G, and that share is growing rapidly, Ovum reported. More 10G xPON ports than xPON ports by 2022, the researcher said; I think it will be sooner.
As might be expected, 10G ONU shipments lag OLT ports, but are growing at a 50% to 60% annual pace. 10G ONUs are mostly sold for business and wireless backhaul applications but are beginning to extend into new residential deployments and lifecycle replacements. I expect that this will become a strong trend in 2020.
An emerging development in OLT opto-electronics is key to accelerating 10G PON deployments. An OLT line cards can be for either xPON or 10G xPON, not both. If both are to co-exist on the same optical distribution network, external Wavelength Division Multiplexer (WDM) filters are needed to connect two separate OLT ports to the optical distribution network -- a nuisance for operators.
Operators in China, planning lifecycle replacements of GPON and GE-PON to XGS-PON, have asked vendors to develop "combo" OLT line cards, which support xPON and 10G xPON on the same physical port. These are now sampling and in lab trials and should start shipping by mid-2020. Combo ports eliminate the need for the external WDM, and save space, power and inventory. Better yet, they vastly improve the economics of piecemeal upgrades from xPON to 10G xPON. As their prices converge with xPON and 10 xPON ports, expect combo ports to be the bulk of new OLT port shipments, perhaps as early as 2021.
MSOs edge closer to FTTP
A recent Heavy Reading/SCTE-ISBE survey sheds light on how MSOs plan to evolve their fiber networks. It's still clear that coax, as part of various HFC architectures, has a long runway. DOCSIS 3.1 plus some node splits and extra channels provides gigabit service to many US households with plenty of headroom.
Consumers have tended to take middle-of-the-road (100 to 300 Mbit/s) speed plans, recognizing at some level that for them, gigabit is massive overkill. Nonetheless, bandwidth demand is growing, particularly as a snowballing cord-cutting trend displaces unicast streaming video for linear cable broadcast. If this growth continues -- and MSOs shouldn't bet against it -- the recently upgraded HFC plant will again run out of gas.
There's no clarity as to what's next. The solution space is multi-dimensional, the trade-offs are complex, and decisions are strongly influenced by each MSO's leanings, history and installed base. As often happens in the industry, there is no consensus. To the chagrin of vendors, MSOs have taken a hiatus from strategic upgrades, in part so they can work out the path forward.
Recent plant upgrades to support DOCSIS 3.1 were rich in fiber. So is infrastructure to support MSOs' enterprise and wholesale offerings. Several of the many approaches to the next round of capacity upgrades bring fiber even closer to the customer. This raises important questions for MSOs: how deep to go with fiber in the HFC network before the inevitable transition to FTTP? At what point are HFC upgrades throwing good money after bad? Do the lower maintenance and repair costs of FTTP justify the capex to build it?
Considering All Moves & Repercussions
Operators contemplate the pros and cons of full-fiber versus HFC, although some already have opted for fiber over future versions of DOCSIS, Dan Grossman writes.
(Source: Engin Akyurt from Pexels)
How long to defer the FTTP transition gets into financial analysis that will have varying results for different MSOs. According to respondents' estimates in the SCTE-ISBE/Heavy Reading poll, 30% of cable customers are expected to be connected by FTTH/FTTP in 2024. Nearly 22% of those connections will likely be enabled with 10G-EPON and 13% with XGS-PON.
Smaller, mostly regional or municipal, MSOs appear to be headed rapidly toward an all-FTTP future, since their financial analysis heavily weights opex. Of the giants, Altice USA took the plunge into FTTP for brownfield upgrades, and as of Q3 had covered 10% of its footprint at an accelerating pace.
Others extended the lifetime of existing coax, using FTTP for greenfield builds and as response to competitive threats. Some bit the bullet on FTTP in high-traffic growth areas that chronically need capacity upgrades, rather than spending incrementally on node splits. Also, coax plant is aging, with implications on opex and customer satisfaction; at some point it will have to be replaced, and fiber, with all its benefits, has become less expensive than coax.
I expect that 2020 will see the cable industry rolling faster toward an all-FTTP future, reaching a tipping point as early as 2022.
Managed WiFi and analytics included
WiFi is the lingua franca for connected home connectivity. Sure, others -- wired (MOCA, G.hn, Ethernet over CAT-5 or 6 UTP) -- and wireless -- (Bluetooth, ZigBee, Z-Wave) -- have their place. But WiFi won the "no new wires" war a long time ago. Consumers rely on it, not just for mobile devices in the home, but also for big-screen streaming video and home automation.
WiFi 6 (IEEE 802.11ax) is the latest iteration of the WiFi standards. It supports higher speeds and broader coverage than its predecessors. Addition of wireless mesh networking allows whole-home coverage in larger houses, without any wiring past the home gateway.
Problem is, WiFi is still wireless. It's subject to interference, channel contention, shadowing, blocking and all the other troubles that wireless is heir to, on top of all the common problems that come with IP and access. Things go wrong. Who does the average consumer call? Their service provider, of course.
"Why isn't my Internet working?" "Well, we don't know" says the call center rep, and then walks the customer through their script -- on the clock -- until the problem is solved or in defeat, they have to schedule a truck roll. With 70% frequency, the problem is a WiFi problem. Often, the WiFi equipment came from a big box store, and really isn't the service provider's responsibility -- but is the provider's problem because the customer believes it is.
Service providers have long had tools for diagnosing network problems: The Broadband Forum's (BBF) TR-068, the DOCSIS Operations Support System Interface (OSSI) and Predictive Network Maintenance (PNM), and others. These give great visibility into the network, but very limited visibility into customer premises. More recent tool kits like the BBF User Services Platform and the WiFi Forum's WiFi Vantage provide that visibility. These tools have become table stakes for vendors.
All major access system vendors have developed (or acquired) proprietary analytics software and hooks into back-office support systems, including for managed WiFi. Analytics are must-haves for broadband equipment vendors. These tools open up innumerable possibilities for customer support and customer self-help, along with network management, planning and marketing.
Vendors claim analytics customers see mid-double-digit improvements in KPIs like truck rolls, recommender scores, time-to-repair and opex. According to a BBWN webinar, webinar survey, 39% of respondents will have deployed WiFi analytics by the end of 2019, and 46% are planning to or see a need for it. All of the Tier-1 providers have it. Roll-out of these capabilities is an ongoing trend that will continue in 2020. Maravedis projects that the number of homes globally with managed WiFi will grow to 294 million 2025 from 40 million in 2020.
Operators have varying approaches to monetizing managed WiFi and WiFi analytics. Some see it as a premium service. According to the webinar survey, about two-thirds of respondents thought consumers would pay at least $1 per month for managed WiFi, with the median guess $3 to $4. And 9% thought that a $7/month price could stick.
Service providers would be better off giving all customers managed WiFi without making it a separate line item. Some subscribers will balk at paying anything at all for "extras." If an operator bundles it into the basic service, the foregone revenue is small, compared to support costs, fallout from customer dissatisfaction and missed upsell opportunities from refusers. About one-third of survey respondents agree. I think the trend will be for broadband providers to include managed WiFi and WiFi analytics in their basic offering.
Service providers have an opportunity in 2020 to further shave opex costs and differentiate themselves via their support and offerings. Happy New Year and welcome to the next decade of change.
— Dan Grossman is a technology-forward industry analyst and consultant, specializing in fixed broadband access technology and markets. He is Principal at NetAccess Futures, and a Contributing Analyst at Heavy Reading. NetAccess Futures offers research, analysis, strategy consulting and marketing collateral to broadband operators and equipment vendors.
(Home page image: Sindre Strøm from Pexels)