Thursday, May 5, 2016

Virgin Media to Add 1 Million FTTH Connections; BT to Add 2 Million

Virgin Media, owned by Liberty Global has said it will use fiber to home to connect about a million U.K. homes by 2019. That is historically unusual, as cable operators have insisted loudly that the hybrid fiber coax network is extensible enough to underpin the business.

The Virgin Media decision is a rather major step towards use of a physical media platform suggesting Virgin sees an end to HFC as a market-leading platform.

To be sure, there is a key difference between the protocols telcos normally run when deploying FTTH and what Virgin Media will do.  Virgin Media will use a technique known as Radio Frequency over Glass (RFoG).

The advantage is quite simple. Doing so allows Virgin Media to retain use of the same modulation techniques used to support HFC customers. That means a single set of headend resources can support either access method.

RFOG also means the same mix of services can be provided to all customers, no matter which network they are served by. That is important for marketing consistency, as it means Virgin Media will not risk confusing customers about what services they can get, depending on which network they use.

The big change: Fiber to the home is described as the “best and most modern” access technology. That is an extremely rare statement for any cable TV executive to make.

For its part, BT now says it will add two million fiber to home connections by 2020.

Of course, it might also be possible to infer the migration path. At some point, the primary advantage of RFOG (backwards compatibility) becomes a disadvantage (the full bandwidth of a passive optical network cannot be tapped).

But cable operators are big on “hybrid,” gradually evolving access networks. Still, at some point, HFC will run out of gas. In a strategic sense, that always has been true. But it never has been a tactical necessity.

It still is not, in this case. Comcast seems to be taking a different tack in its U.S. operation, planning to make use of FTTH to support symmetrical 2-Gbps access networks across perhaps 85 percent of its current footprint. Those networks will not use RFOG.

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