Broadband operators should rethink key assumptions about their IPTV and fiber strategies, an analyst warned.
OTT video is upending telecom operators' established approach to IPTV, Kamalini Ganguly, senior analyst at Light Reading sister company Ovum, told attendees at Broadband Forum Asia in Hong Kong this month.
"Operators have to consider whether the FTTH deployment can stand on its own on the basis of fixed broadband... and without [deploying] IPTV at all," she said.
Thanks to OTT, the pay-TV business is no longer "tethered to the FTTH or building footprint," said Ganguly.
A decade ago, an operator planning to deploy fiber to the home (FTTH) or fiber to the network (FTTN) would have done so primarily to offer IPTV, the researcher said.
"Without that fiber deployment you would not be able to do it," she said. "Today that is not really the case because operators are moving to or looking at OTT video. And that can be over a much larger footprint. It can have a much bigger market which is not confined to your fixed footprint at all. It's a very different business case."
Another bedrock assumption of the broadband business -- the price premium that FTTH traditionally commands over DSL -- is also disappearing, Ganguly said.
"Price premiums either to the home or building may be difficult to realize in competitive markets. Unless you're a monopoly it would be difficult because so many operators today are offering high-speed tiers," she added.
However, operators have successfully enticed subscribers onto purchasing more lucrative broadband features, said Ganguly.
Higher prices may be hard to sustain but operators can still ask subscribers to migrate to higher speeds at premium prices because there is a greater consumer awareness today of fixed broadband speeds and their capabilities, she noted.
"That's something that is different from ten years ago: [Then], not many subscribers would think they [wanted] to take 100Mbps but today that might be a much more viable proposition," said Ganguly.
FTTH and FTTB are fast eating up the global broadband access business, she said. Fiber overtook DSL globally last year and by 2021 will account for more than 50% of total fixed broadband connections, Ovum predicts.
— Robert Clark, writer, @electricspeech.