how-to block ads
|
|
Share Topic
 |
 |
|
|
| reply to BiggA
Re: I am not the most up-to-date on upgrading UVerse said by BiggA:... AT&T will go FTTH, or they will die. At least the landline division. Business is about maximizing your returns. Sometimes this means strategic retreat from an area where you cannot be competitive. In AT&T's case, this means opting for FTTN and choosing to keep only the customers without high bandwidth requirements.
If the landline division has to shrink, then that might be a better outcome for AT&T than pouring money into it and getting only negligible returns.
The problem is that the cable companies have an unassailable cost advantage all the way up to the 10 Gbps capacity of the coax. Until that point comes, the telcos cannot compete on equal terms with the cable companies.
If you do what Verizon did, then you find yourself paying off an expensive new physical plant, while the cablecos only have to maintain their already-paid-for coax. The cablecos can therefore afford to run customer-retention promotions, which limits your take rate, which makes it even harder to pay for the fiber.
said by BiggA:The longer AT&T waits, the more costly it will be in the long run to go to FTTH. The longer they wait, the less costly it will be. First, because the equipment will cost less. Second, because a dollar in the future is worth less than a dollar today.
There will be a window of opportunity that opens up in another decade or so, when the cable companies max out the bandwidth of the coax. At that point, the cablecos will also have to deploy FTTP. And it'll be an even playing field.
AT&T landline will be a smaller division then, because they'll have shed customers. But they will still have the right-of-way to build upon. And there's no real advantage to incumbency -- you're really competing for customers all over again when you deploy fiber. Verizon, Cincinnati Bell, etc. are getting roughly the same take rate for fiber as any cable overbuilder would. | | |
|
 tschmidtPremium,MVM
join:2000-11-12
Milford, NH
kudos:8
 ·G4 Communications
·Fairpoint Commun..
 ·Hollis Hosting
| said by tanzam75: The problem is that the cable companies have an unassailable cost advantage all the way up to the 10 Gbps capacity of the coax. Until that point comes, the telcos cannot compete on equal terms with the cable companies. During the early days of residential broadband I though DSL would win since the cost of rolling it out was lower than what the MSOs had to do to modify HFC cable plant.
However DOCSIS advances have far outstripped DSL. Being copper, both have first-mile have distance limits, but it is much cheaper to add another cable node then a VRAD to improve performance. As mentioned DOCSIS channel bonding, while a kludge from an architectural perspective, is a cost effective way to add capacity. Throw in switching rather than broadcast to conserves cable bandwidth and Cable has a massive advantage over DSL today.
I’m a DSL subscriber about 13,000 feet with 6Mbps service. Unless there is some wonderful new physics/DSP magic that is the end of the line for DSL. That speed works fine for my family today but I’m sure in a few years it will be woefully inadequate.
said by tanzam75:
The longer they wait, the less costly it will be. First, because the equipment will cost less. Second, because a dollar in the future is worth less than a dollar today.
Fiber construction cost is decreasing but the bulk of the cost to roll out FTTP is labor. Waiting does not really help. The problem is first-mile CAPEX is high so ROI takes a long time, which is why it has been such a contentious issue all these years. As long as the Cablecos are able to offer ever increasing speed there is very little marketing advantage for a second player, too much risk and too little payback.
I was excited when Verizon aggressively rolled out FIOS. They could offer a compelling advantage and FIOS OPEX is much lower than copper reducing long term cost. But they, like most other publicly traded companies, seem to have gotten caught up in the profitability of the quarter club and walked away from wired networks all together. That may be good business for Verizon but bad for the rest of us. Long term wired fiber networks are a great investment, but one needs a reasonable time horizon.
Personality I'd love to see a wholesale first-mile network, sort of like what has happened in the electric utilities, but that is unlikely to happen.
/tom | |
|
