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Survey: Fiber Can Net Telcos 20% Annual Saving Over Copper
At Least According to Firm That Sells Fiber Gear
by Karl Bode 09:20AM Thursday Apr 04 2013
According to a new survey by the Fiber to the Home Council, running a fiber to the home network isn't just great for consumers and businesses looking for more bandwidth, but it can save a medium or small scale telco up to 20% in savings annually. "On average, respondents estimated those savings to be 20.4 percent, largely because of a decrease in ongoing repair and maintenance," says the group.

According to the Council (which is comprised of companies selling fiber gear), the number of homes that can access FTTH networks has jumped 17.6 percent over the last year to 22.7 million. Granted most small to mid-sized telcos aren't installing fiber -- not because they don't realize potential cost savings, but because they either don't have the funds to do so, or there's such pathetic competition across their footprint there's simply nothing driving them to.


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Bob61571

join:2008-08-08
Washington, IL

Little guys leading the way for smaller population areas

Isn't the real question, "How do so many small and medium sized telcos manage to bring all-fiber to their customers, while the big boys seem to have such a hard time doing it for their smaller metro area customers?"
openbox9
Premium
join:2004-01-26
Germany
kudos:2

1 recommendation

Re: Little guys leading the way for smaller population areas

The big boys don't have a problem doing it, they're just doing it slowly. The real question is how accurate is a survey of estimations in achieving this 20% savings?

G35

@wideopenwest.com

Re: Little guys leading the way for smaller population areas

Easy... Pass it on to the customer, 30% and make more!

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

1 recommendation

said by openbox9:

The big boys don't have a problem doing it, they're just doing it slowly. The real question is how accurate is a survey of estimations in achieving this 20% savings?

This news item can explain why telcos go slow on new and upgraded infrastructure - the cost and the low payback.
»www.theregister.co.uk/2013/04/04···ex_fail/
Austinloop

join:2001-08-19
Austin, TX
kudos:1
It is a good thought, but what would the costs be to go thru my subdivision of around 2k homes and for the most part total buried plant, i.e. electric, CATV, and telephone. The expenses would be very high to dig up back yards, either open cut or bore existing streets, if permits for such can be obtained. I suspect that the cost per foot in my subdivision for just the trenching would be in excess of $10 - $15 per foot, especially since there is almost solid rock (limestone) 6 inches under the grass.

battleop

join:2005-09-28
00000

1 recommendation

It's easier to paint one house than it is the entire neighborhood.
silbaco
Premium
join:2009-08-03
USA
A lot of the little guys don't really have a choice. Many of them operate ADSL2+ or even regular ADSL and have hit a road block for speed. They need to do something because the wireline business is all they have and many would like to expand to the TV market which is difficult to do when you have ADSL2+ or ADSL. Not impossible, but not practical long term. So it is either VDSL or Fiber, and these choose fiber.
tanzam75

join:2012-07-19

Re: Little guys leading the way for smaller population areas

said by silbaco:

A lot of the little guys don't really have a choice. ... They need to do something because the wireline business is all they have ...

Exactly.

AT&T and Verizon are finding much juicier returns on wireless. If they didn't have wireless, then they might be considering wider rollouts of FTTP.

In some sense, the iPhone killed FTTP.
Sammer

join:2005-12-22
Canonsburg, PA
said by Bob61571:

Isn't the real question, "How do so many small and medium sized telcos manage to bring all-fiber to their customers, while the big boys seem to have such a hard time doing it for their smaller metro area customers?"

One answer to that question is that that some small telcos have been allowed to replace their copper infrastructure with fiber while the large telcos have had to do "last mile" fiber overbuilds except for "greenfields" or disaster replacement.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
The big guys don't believe in customer satisfaction. They believe in money. Pools of money.

tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS
said by Bob61571:

Isn't the real question, "How do so many small and medium sized telcos manage to bring all-fiber to their customers, while the big boys seem to have such a hard time doing it for their smaller metro area customers?"

Many municipalities gave millions of dollars to deploy FTTP only to get cherry picked & dropped years later in broken promises. These same large corporations use every possible reason including the bad economy as an excuse to be anti-competitive and keep raking in millions of dollars while offering little value to the consumer. AT&T and CentryTel are probably the worst offenders, but blame can even be laid at the doorstep of Verizon which has the largest north American FTTP footprint the country.

Sell more cheap gear to Google and get them a bump outside of the 3 states that they have a presence in (CA, MO, KS). I'm thinking NJ-- perfect to give Verizon & Comcast a black eye at the same time.
jorcmg

join:2002-10-24
USA
If it was such a great investment wiring every home with fiber, certainly there would be investors for that and a business to do such a thing. No one is stopping Google from expanding. Wire the country with 1gig symmetrical. After all...it's a great investment right...

CAST SUCKS

@comcastbusiness.net

fiber is costly to install and digging is not easy

fiber is costly to install and digging is not easy

hey hey hey

@charter.com

Re: fiber is costly to install and digging is not easy

when you factor in that it won't have to be replaced for 50 years there is savings

battleop

join:2005-09-28
00000

Re: fiber is costly to install and digging is not easy

Spoken like a true sales monkey. I hear this pitch all the time. If you just spend X on my product today it will save you in the long run. That's the new sales pitch when they find out X is 10 times your budget and they are trying to save the sale.
--
I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.
prairiesky

join:2008-12-08
canada
kudos:2

Re: fiber is costly to install and digging is not easy

exactly, so saving 20% on opex, how long does it take to pay off the capex? Especially is what people claim is true and the cost of fiber is falling at an exponential rate... If I can wait a year and get it for less money, does that make the most sense.....

fixing my old car is a lot less expensive than buying a new one!

battleop

join:2005-09-28
00000

1 recommendation

Re: fiber is costly to install and digging is not easy

"Especially is what people claim is true and the cost of fiber is falling at an exponential rate"

There are a lot of us out there that would love to find where the cost of deploying fiber is falling a an "exponential rate" because we would love to jump on this bandwagon.

It still costs $2-5 per foot to deploy and I've not seen a drastic drop in pricing.
--
I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.
prairiesky

join:2008-12-08
canada
kudos:2

Re: fiber is costly to install and digging is not easy

said by battleop:

"Especially is what people claim is true and the cost of fiber is falling at an exponential rate"

There are a lot of us out there that would love to find where the cost of deploying fiber is falling a an "exponential rate" because we would love to jump on this bandwagon.

It still costs $2-5 per foot to deploy and I've not seen a drastic drop in pricing.

as a fixed cost it hasn't dropped huge amounts, someone mentioned Fios started at 4000/home passed and we're now down to under $1000 in the last decade. That being said, on a price per mbit, it's dropped a lot.... not that that means all that much, but it is another metric to examine

elios

join:2005-11-15
Springfield, MO
thats only true if you fix it once
when your old car(copper) is breaking down every week you might as well get a new one(fiber)

repairing copper at this point is just rearranging the chairs on the Titanic better to rip it all out and replace with fiber like the rest of the developed world
prairiesky

join:2008-12-08
canada
kudos:2

Re: fiber is costly to install and digging is not easy

said by elios:

thats only true if you fix it once
when your old car(copper) is breaking down every week you might as well get a new one(fiber)

until there are real numbers involved, this statement is just hearsay and an assumption.

hence my statement of; how many years does it take of saved opex to pay off the capex..... if it's 100, then no, it certainly isn't cheaper to buy new, if it's 1, then sure it makes sense. Where in between fiber falls, it isn't clear.
tanzam75

join:2012-07-19

Re: fiber is costly to install and digging is not easy

said by prairiesky:

hence my statement of; how many years does it take of saved opex to pay off the capex..... if it's 100, then no, it certainly isn't cheaper to buy new, if it's 1, then sure it makes sense. Where in between fiber falls, it isn't clear.

And that's assuming you can actually achieve savings in opex.

If everyone is on overtime, then yes, they can just stop paying overtime. But if not, then can they furlough people or put them on reduced hours? Or do they have a fixed personnel expense that is unrelated to how much maintenance needs to be done?

The wireline sides of AT&T and Verizon are unionized. How are the contracts written?
silbaco
Premium
join:2009-08-03
USA

1 recommendation

Costs

And if they end up having to maintain both copper and fiber, their costs can increase by more than 20%. People are unbelievably stubborn about upgrading. They are happy with what they have.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:5

... "don't have the funds" ...

It's amazing how restrictive sensible budgeting can be.
elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink

Capital vs. Operating Costs

Saving 20% on operating costs doesn't necessarily offset the huge investment necessary to get there.

If customers aren't going to buy the new product - and they don't, as Verizon has proven for 6+ years, it doesn't matter what cost efficiency it yields.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Capital vs. Operating Costs

That happens when you price it as pretty much status qua and give pretty much no incentive for making people want to change.

Offer more speed for a better price than what is currently available to a vast majority of their market and people will take it. Because they can and the underlying infrastructure is cheaper so they will probably make more per user than they currently do. But that of course would induce the big "C" word (competition) in their markets and they dont want that, nor do their cable sweet hearts.

Instead, they want to play a game of smoke and mirrors.

AnonMan

@comcast.net

Re: Capital vs. Operating Costs

Fiber also is not as expensive or hard to install it as people think. This is not the early 90's anymore..

I had fiber ran to my house when I use to run a business out of here from tw telecom (NOT Time Warner) back in early 2000. It's dark now and no one can use it but them so useless now that I don't need but they ran it from the main ring off the road about 1.5 miles and at most bore 8 five foot deep holes and this includes crossing about 60 house driveways, 4 streets and 4 turns...

All done underground near utility power and water... My cost? $0
6 strand fiber.. They ran into no issues. Just wish could activate on someone else now that I don't have them lol (they are a tier 1 provider so expensive and I am not doing the same business)

Anyway the cost issue is only a problem if they use some over priced contractors or don't do it in house. It was also all done in under 2 days after the survey was done might I add... A crew of about 4 did it total. they laid the conduit and after pulled the cable through using a quad bike tied to some string lol

So if this was in early 2000 I would imagine it can be done similar still, heck probably better... The hole cutting a slot for that cable like the other method shows is faster because don't have to wait to bore holes and for a hydraulic hammer to bang through the group but the way mine was done has 0 visible impact on anything, nothing was cut, all digging was done in a yard and grass replaced when done.

Now grant it doing this for 100 houses might not be easy but once the furthest one is done you have your path now and can easily run fiber down the entire street. You only need to hook up when someone orders.
silbaco
Premium
join:2009-08-03
USA

Re: Capital vs. Operating Costs

It cost you $0. It would have cost them thousands. And hooking up your house is much different than hooking up a neighborhood.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Capital vs. Operating Costs

I would be willing to bet it cost them nothing and cost Anon thousands in the end.

Being you and I both know they dont give their service out for free and surely made up the cost and then some in the price of his service. I would say they even received more profit on that with the expedited depreciation schedule they get to use now to show more expenses and thus reduce their tax write off on a line that will probably be there and used (if someone subscribes) for the next 50-100 years.
elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink

1 edit

said by Skippy25 See Profile
Offer more speed for a better price than what is currently available to a vast majority of their market and people will take it. Because they can and the underlying infrastructure is cheaper so they will probably make more per user than they currently do. But that of course would induce the big "C" word (competition) in their markets and they dont want that, nor do their cable sweet hearts.

Instead, they want to play a game of smoke and mirrors.

They've offered more speed for a better price, and only a minority of the potential customer base is willing to pay for it.

The underlying infrastructure is NOT cheaper.

The competition will come from LTE, which will make even fewer people willing to buy the fiber product.
Sammer

join:2005-12-22
Canonsburg, PA

1 edit
said by elray:

If customers aren't going to buy the new product - and they don't, as Verizon has proven for 6+ years, it doesn't matter what cost efficiency it yields.

FTTH has been around for less than a decade and nearly 9.7 million of the 22.7 million homes it's marketed to in North America have bought it. Most people would consider that a marketing success rather than a marketing failure.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: Capital vs. Operating Costs

If fiber is the second coming, why isn't the take 100%? Considering the CAPEX requirements and this potential savings in ops, shouldn't we as a nation/society require 100% fiber service when/where it's deployed?

FFJOHNL312
Premium
join:2007-12-16
Pawtucket, RI

This is news?

2003 pre-ftth called. They want their news back.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

2 years ago they installed underground electric service here

... before that, the whole neighborhood was power poles and the usual aerial lines.

They didn't have to dig up anyone's yards. In fact there was very little digging. They had these machines that pushed conduit and cables through the ground and they had small access points where they placed green (I'm guessing transformers) on the ground every so many hundreds of feet or yards or etc.

I don't see why a fiber deployment would be any different in an existing neighborhood. You don't dig up streets. You wouldn't be trenching everyone's yards and driveways. I'm sure it's more expensive then attaching to poles, but it's got to be much, MUCH cheaper then trenching and digging.

Since they did that, the power has not failed here, even in severe weather, except one morning when a small tornado took out a substation and major transmission lines.... before that, every time there was severe weather, power would fail and repairs would have to be made.... so reliabilty has increased, and they are saving on repair work. The same thing would apply to a FTTH install as well. No more coming out and repairing lines and cables torn up by wind and ice. Win/Win.--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini

Gregm

@rr.com

Re: 2 years ago they installed underground electric service here

I work for a small telephone company and we just completed replacing all of our copper with fiber it is way more expensive to do directional boring then doing just plowing (trenching) we would did as much as possible with the plow to save money it was costing us as much as $30,000 - $45,000 to plow and $16 a foot to bore.
BiggA

join:2005-11-23
EARTH

Surprised it's not more...

AT&T's copper network with U-Verse is a MESS. There's crap everywhere. If they ran fiber, they could get rid of most of it and simplify the network significantly. Verizon's network over in RI is FAR simpler, there's relatively few copper lines, and they are thing and don't branch out all over the place like AT&T. It clearly a minimal network for a small number of remaining copper customers, while FIOS takes the lion's share of the customers.

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