With the development of services and the intensified competitions in recent years, cable TV subscribers and revenues are growing at a sluggish pace, and the ARPU value is declining. In contrast, fiber networks are developing rapidly. Over the past decade, the FTTx networks represented by PON have been commercially deployed worldwide. By the end of 2019, the number of global FTTx subscribers had exceeded 600 million, which is more than 50% of the total number of fixed broadband subscribers. Furthermore, with the increasingly extended broadband access scenarios and the emerging innovative services, MSOs are facing considerable challenges from telecom operators. It is inevitable for MSOs to transform and upgrade their cable TV networks. Fiber-based network transformation is one of the most important options, some leading MSOs have thrown themselves into FTTx network construction and operation, and more and more MSOs have been joining in. The fiber-based network transformation of MSOs increasingly shows new development features.
Emerging high-bandwidth services and innovative access scenarios urge the transformation and upgrade of cable TV networks
The rapid development of UHD videos, online gaming, and cloud services put forward higher requirements for the network bandwidth capability. It is expected that gigabit access will become a fundamental requirement in the next 5 years. However, cable TV networks are facing an increasingly prominent problem of insufficient uplink bandwidth resources due to the bottlenecks of transmission media and shared spectrum resources, unsatisfactory bandwidth acceleration, as well as unbalanced and asymmetric broadband services. In addition, it is difficult for cable TV networks to meet diverse user requirements such as new video formats due to its legacy network architecture and technical foundation. The less interactive CATV services are facing pressures brought by IP-based streaming media. Some leading MSOs reconstruct their HFC networks by replacing feeder coaxial cables with fibers, moving the optical nodes downwards, and connecting fiber to the residential community or the building, but still use coaxial cables at the user end to access the residential community, building or home. The reconstruction is certainly not thorough, and the bandwidth at the user end is still a bottleneck; therefore, further completion of fiber-based network transformation is advisable.
PON technologies are a preferred solution for the network transformation of MSOs due to its obvious advantages and mature industry chain
With the aging of coaxial cables in cable TV networks coupled with the power supply and maintenance problems of a large number of active equipment, the MSOs are facing storms of rising OPEX, which brings tremendous O&M costs and pressures to them. However, the fiber networks based on PON have a strong appeal to the MSOs due to its comprehensive advantages over copper in terms of bandwidth, availability, cost, and so on. On the one hand, the availability of fiber is much greater than copper, and fiber costs are much lower than copper. On the other hand, PON leverages passive networking, which provides high reliability and effortless maintenance without the need for power supply. Its P2MP topology greatly saves the costs of feeder fibers. Furthermore, the PON technologies iterate rapidly and support smooth network evolution. At present, GPON has been commercially used worldwide, 10G PON has entered a large-scale deployment stage, and the 50G PON standard is being formulated with a clear development route. After years of development, PON equipment, chips, and optical components are mature, and the industry chain is continuously improving, providing solid support for the MSOs to commercially deploy fiber networks on a large scale.
“Digital Europe” ultra-broadband initiative creates new opportunities for the fiber-based network transformation of MSOs
The European regions have a large number of MSOs, and European countries have set fiber network construction as a key development goal. The British government plans to achieve nationwide FTTH coverage in 2033. The ultra-broadband network plan of Italy explicitly states that the fiber network is a strategic solution for realizing 100Mbps connections. The ultra-broadband plan of France aims to provide the whole of France with access to broadband speeds of 30 Mbps or more by 2022, of which 80% should be supplied by fiber. In the Digital Europe program, the EU explicitly sets optical network infrastructure construction as one of the key investment directions in the post-pandemic era to further promote the digital transformation in Europe. MSOs will have great opportunities brought by fiber transformation policy incentives.
It is obvious that PON-based passive optical fiber network is one of the best options for the transformation of MSOs. Some of the MSOs have been carrying out fiber-based network transformation, or preparing to use the GPON or 10G PON technology to build FTTH networks and attract more users. Virgin Media in the UK leverages FTTC to provide users with high-bandwidth services comparable to pure optical networks . VDF announces to speed up the construction of all-optical broadband networks . IZZI in Mexico plans to build FTTH networks in one fell swoop for new areas. ZTE has been carrying out in-depth cooperation with IZZI in its FTTH transformation and providing end-to-end deployment solutions. It is foreseeable that MSOs will enter a new stage of fiber-based network transformation due to multiple factors such as service, market, and policy incentives.