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Canadian Telcos Fast Tracking FttH to Combat Cable Operators

There are a number of stimuli which are pushing Canada’s burgeoning FttH market, and the government and telcos alike have made significant steps to improve the reach and capacity of broadband infrastructure. These measures will show real benefits for consumers in recent years.

From the government’s side, its Economic Action Plan, launched in 2009 as a response to the global financial crisis, included a pledge to provide $225 million over three years towards its Broadband Canada Program, geared to extending broadband coverage to underserved communities. The initiative called for the government to pay up to 50% of costs incurred by operators upgrading broadband in rural areas. By the end of 2012, the program’s 86 or so projects are expected to have delivered broadband to about 214,000 households.

The government also recently proposed reducing barriers to foreign investment in the telecoms sector, enabling foreign companies to hold more than 46.7% stakes in local telcos. As the experiences of the Netherlands’ KPN, Austria’s MNO Orange and Ireland’s Eircom have recently shown, a fresh injection of capital from unexpected quarters—in these cases South America and East Asia—may help to resuscitate flagging telecom markets in the developed West.

Despite these efforts, much more needs to be done in the government’s overall appreciation of broadband as an essential infrastructure. Certainly it has invested in e-health initiatives in recent years, following recommendations from agencies such as the Information Highway Advisory Council. This has resulted in some of the more advanced e-health systems in the world. Yet the government does need to grasp that government-initiated trans-sector policies in Canada are also required to push the development of other key services. In this respect, a fibred national network would be a key infrastructure asset allowing businesses, institutions, utilities to thrive from new business models.

From the telcos’ side, operators have been stimulated to invest in FttH through the successes of cablecos which have systematically upgraded their networks with DOCSIS3.0 technology. As a result, many cablecos are commonly offering 100Mb/s services or, to a limited extent, 200Mb/s services. DSL cannot hope to compete, and so to prevent customer churn in areas where cablecos also operate, telcos are been forced to step up their game with FttH.

This development has been a long time in coming—while fibre to businesses in metro areas has been common for some time, deployment elsewhere is still in its early stages, with only a limited number of residential communities being connected to networks. And so operators are fast-tracking FttH deployments: Bell Aliant plans to upgrade a third of its footprint by 2014 and to continue so until 90% is connected. Bell Canada and TELUS are expected to have at least 50% of their network upgraded, while SaskTel has an FttH program to 2019.

The momentum is palpable, and for the government’s economic recovery program the years to the end of the decade are more promising.

By Henry Lancaster, Senior Analysts at Paul Budde Communication

Henry is also a contributor of the Paul Budde Communication blog located here.

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Is this the same shared fiber that Phil Howard  –  May 12, 2012 1:28 AM

Is this the same shared fiber that FiOS is doing?  This is little more than cable over glass which still has severe limits from reach the gigabit holy grail that is already showing up in a few places.  Of course, these telcos won’t have to worry about too much competition from cable companies as long as they are doing a bandwidth tit-for-tat.  But if they were to go with the discrete fiber model, the bandwidth potential is enormous and they could take a huge number of cable customers.  But I guess that just isn’t something corporate executives would do.

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