OTT video trend core to operators’ service strategies, spotlights fibre needs, according to Kagan, the TMT arm of S&P Global Market Intelligence, in its just published its report looking into the fibre landscape of Western Europe.
“After years of fibre inactivity across much of Western Europe, renewed efforts are emerging that will help plug the gap between the fibre haves and have-nots. The region’s broadband markets are approaching saturation on copper lines and operators are increasingly competing on speeds and strengthening the case to commit to fibre, especially as last-mile build costs come down to an average of €600 per premise,” said Mohammed Hamza, senior analyst at Kagan, S&P Global Market Intelligence.
“The growing popularity of high-bandwidth services, namely over-the-top video streaming, 4K Ultra HD video, video gaming and calling, augmented and virtual video as well as live sports will further pressure operators to act.”
The key takeaways from the report are:
– Of the 16 major markets in Western Europe, only Denmark, Finland, Norway, Sweden, Portugal and Spain host broadband markets with fibre controlling more than 20% of broadband homes.
– Sweden is far ahead with 60.7% of its broadband market on fibre, while Spain sits at 46.8%, Norway 42.3%, Portugal 38.6%, Finland 33.2% and Denmark 22.5%.
– Aside from France, Switzerland and the Netherlands, all other markets’ fibre share of broadband homes lag significantly at 5% or lower.
– OTT video usage will continue to grow, as its integration into multichannel, hybrid free-to-air and connected TV/smart TV platforms deepens. Most platforms in Western Europe now integrate OTT services — Netflix in particular.
– Progress on fibre has been slow due to high rollout costs, the lack of effective regulation, lower broadband penetration rates relative to the current state of play and the arrival of DSL-boosting technologies such as very-high-bit-rate DSL and more recently, G.fast. While G.fast can plug the gap on current cable speeds with 350 Mbps offers, this new edge will not hold for long given cable’s rollout of gigabit-speed-enabling DOCSIS 3.1 technology.
– The push for fibre still comes at a high cost, requiring a longer-term outlook on making a return on investment – with many companies opting for partnerships in a bid to cut costs