This post is sponsored by Teleste Intercept.
While take rates for gigabit speed services are currently low, subscriber demand for higher bandwidth services is growing steadily as innovations in gear and technology migrate into general use.
This presents an opportunity for new investment, but providers must plan carefully and invest cost-effectively for the short and long term.
“Inaccurately determining the demand may result in spending more capital than necessary by predicting demand too early, or losing potential subscriber revenue by predicting demand too late,” said Dave Wachob, business development director for Antronix, which designs and manufactures broadband products in North America.
Other criteria include the amount and the type of demand – low-latency and/or symmetrical – plus the type of new higher-bandwidth services – like interactive, video-on-demand and augmented or virtual reality – that push demand.
“We know augmented or virtual reality, for example, is going to happen, but estimates are rather varied about how big they will be, when they will be widely distributed and what might be the types of AR/VR that ultimately drive the demand,” Wachob said.
Though consumers are asking for higher broadband speeds, they’re not always willing to pay for them. Companies must consider their value judgments of the service relative to cost. However, reducing prices for gigabit services over time affects the take rate for the next generation of Max Tier, and also must be considered in any long-term capacity planning model.
All this makes planning and budgeting a challenge. Investing in an architecture that sustains the higher throughput requirements of the next several decades makes sense, but the high cost of connecting every subscriber to the network ideally could be better measured as the opportunity and the market become receptive.
Adopting a flexible system architecture enables companies to take a more gradual approach as demand is validated so as to avoid overcommitting. With a hybrid xPON/DOCSIS FTTT/FTTN architecture, providers can leverage existing hybrid fiber-coaxial architectures and DOCSIS infrastructure while gradually building out a fiber-to-the-home architecture.
“Scenarios where the cost to add bandwidth includes an initial enablement or preparation costs, and an activation or success cost element are the most flexible,” Wachob said. This allows the deferment of some of the risks and costs until paying subscribers are established.
For example, companies could initially deploy fiber-to-the-tap instead of directly to the home.
“The Teleste Intercept’s Lancet Series eHFC optical taps are an xPON/HFC hybrid transport in which both xPON and legacy CATV video and DOCSIS data transmissions are shared over the same physical infrastructure/optical distribution network,” Wachob said. “A deployment with one of these wide band optical taps would overcome some of the principal scaling costs and – depending on the kind of network – could be among the lowest cost-per-bit rate options.”
When comparing available technologies, the top consideration is the comparative capital and deployment costs of each option.
“Also worth considering,” Wachob said, “are ongoing operational costs, the expected lifespan of the network and its components and the reliability of the technology. All of these factors will have an associated financial impact on the decision about which technology to deploy.”
Flexible system architecture empowers companies to respond to changing consumer behaviors and increasing adoption of data-intensive products and applications. Adapt network planning criteria to include all of these factors to identify the best differentiated approach heading into to the future of hybrid networks.
Read more about flexible system architectures, future capacity planning, subscriber contention and take rate models for high-speed next-generation data services.