Optical fiber always is pitched as the “best” or “permanent” solution for fixed network internet access, and if the economics of a specific deployment are present, fiber is a wise choice. But the economics are not always there.
Sometimes there are other popular options, such as cable TV home broadband where such networks operate. Sometimes geography or population density make fiber-to-home networks unattractive options.
Aside from supply-side advantages, sometimes demand lags. Some countries have very-high take rates for FTTH services; others have moderate or even low take rates.
Sometimes government subsidy policies create low prices that encourage high rates of adoption or discourage building of rival networks (robust wholesale policies and a single network, for example).
And, when offered choices, consumers often do not actually buy services that require FTTH media. In the U.S. market, for example, speeds actually purchased by consumers on the networks vary widely, and relatively few consumers buy the fastest speed tiers of service.
In other words, consumer demand often results in buying preferences that are not so pronounced that other alternatives are deemed unsatisfactory. When consumers routinely prefer speeds in the 200 Mbps to 500 Mbps range, other options remain viable.
Also, where it is available, cable TV hybrid fiber coax networks can offer gigabit speeds as well, so FTTH remains a choice, but not the only option for such speed tiers.
In U.S. rural markets, for example, data from 2022 suggests 37 percent of households subscribe to services operating between 100 Mbps and 1 Gbps, while 31% percent of homes subscribe to services between 25 Mbps and 100 Mbps.
The most popular rural speed tier was 200 Mbps. So consumers seem to be making choices for “good enough” speeds at preferred prices, rather than routinely choosing the higher speeds for higher prices.
To be sure, preferences for higher speeds are growing, and should shift over time. It remains debatable how much of the change in preference is driven by perceived needs for higher speeds and how much is driven by price cuts, though.
The number of people in a household still tends to correlate with demand for faster services, as that solution supplies more bandwidth per user and per device.
But the degree of competitive alternatives seems to be important. In the U.S. market most households have at least two network alternatives, and in many of those markets, there are at least two providers capable of delivering gigabit-per-second speeds.
So it is relevant to note that in mature U.S. FTTH markets, the average FTTH take rate is about 45 percent. If FTTH services, speeds and prices were clearly preferred, the take rates arguably would be much higher.
TheEuropean landscape shows dramatic variation. Spain leads with a 91.03% take-up rate, Portugal follows at 89.92%, and France achieved 83.76%. However, Belgium has the lowest penetration at 9.98%, Germany at 11.2%, and Greece at 11.33%. The overall EU39 take-up rate among homes with coverage is approximately 53.05%.
At least some observers likely have been shocked at the popularity of new fixed wireless access supplied by mobile service providers. Such services now seem to represent about six percent of all U.S. connections. FTTH likely is the choice for about a quarter of all households.
The point is that demand matters, not simply supply. And that can raise questions about the most-efficient and effective use of capital to supply demand now, even if other choices (FTTH, especially) will begin to make sense over time.
