Service providers have significantly expanded their outdoor
broadband networks in the past few years as competition and heavy user demand
have led to huge fiber build-outs. But much of that work has been completed or
is underway around the world, and with widespread 5G wireless (and renewed
demand for fiber extension) a couple of years away, the outlook for 2019 is
less certain for network operators and their suppliers. In this article, I’ll look
at trends impacting outdoor broadband network and technology needs for the
Reduced Competition in
In 2019, I expect service providers to meet the data
consumption needs of their customers by either leveraging their existing fiber-to-the-home FTTH
networks or upgrading existing infrastructure using hybrid fiber coax (HFC) and
a combination of Remote PHY and DOCSIS 3.1.
While these aren’t necessarily new technologies, they are in response to
the general pause seen recently in the growth of outdoor broadband networks in
North America. While service providers haven’t experienced the data consumption
they saw in the previous three to four years, I expect them to deploy more of
these solutions to continue providing the subscribers needs without performing a
complete overhaul of their networks.
CLICK TO TWEET: CommScope's Ric Johnsen provides insight into passive network trends for 2019.
While data consumption growth rate has declined, I am also
seeing a relatively calm competitive environment, which I expect to continue in
2019. During the past few years, operators were investing heavily to keep up
with large competitive initiatives, such as AT&T’s requirement (in its
DirectTV acquisition) to pass 12.5 million homes with fiber and Google’s
efforts to build its own fiber networks in many cities. Both these factors
spurred heavy demand for fiber. As competitive initiatives have dwindled over
the past few years, other service providers are less inclined to be aggressive
in fiber deployments and we should see that continue in 2019.
Another reason for competitive calm is that there are fewer
players in the North American market because of consolidation. Charter, Time
Warner and Bright House consolidated into one company, Suddenlink and
CableVision have consolidated into Altice, and AT&T purchased Time Warner
in June 2018. Operators are still preparing for an expected onslaught of fiber activity
in support of 5G, but I do not expect that to begin broadly until 2020.
FTTH expansion in Europe;
Limited growth in other regions
Some of the big trends outside the US for 2019 include FTTH deployments, plug-in-play and hardened connectivity solutions, lack of
growth and consolidation. In Europe, for
example, government directives, grants and subsidies are encouraging FTTH
buildouts, which is why there will be additional upsurge in fiber expansion in
the United Kingdom. Germany is scheduled to begin its FTTH buildout in 2020,
France is halfway through its fiber expansion, and Spain has finished most of
its projects in major cities. So, with pushing fiber deeper, we see much more
controlled growth because governments subsidies, not competition, are driving
high-ramp growth spurts.
Outside of the United States, there is a need for
plug-and-play technology as speed of deployment and shortages of skilled labor
become a bigger issue with larger deployments. This helps to bring down the
total installed first cost of these deployments and allows them to hit the
I also see an increased need in 2019 for hardened
connectivity, which is proven to be as robust or even more robust than spliced
connectivity. Some big storms like Hurricane Helene in Ireland have hit in
areas where there is hardened connectivity, and there wasn’t any damage to
these networks. Some providers don’t like the limited number of hardened
connectivity equipment suppliers they can use so they stick with older
techniques, but in general, providers will be looking at hardened connectivity
and indexing to get the reliability, rollout speed and labor costs they need.
Latin America, Southeast Asia, the Middle East and Africa
are all hungry and potential markets, but unwillingness by operators to spend
capital and the delay of projects will continue to hold back growth in 2019.
Availability of skilled labor is another barrier to growth. But there are some
bright spots in these markets:
- Mexico is deregulating its market, and we’re
seeing TelMex talk about multiple millions of homes being passed per year for
the foreseeable future.
- In Puerto Rico, Liberty Global passed 100,000
homes with fiber as part of its rebuild following Hurricane Maria.
As in North America, consolidation will be another trend hitting
these international markets. In Mexico, AmericaMovil is continuing to acquire
service providers across Central and South America, and Telecom Italia and
Spain’s Telefonica are acquiring providers in Latin America.
The Calm Before the 5G
The rollouts associated with densifying the cellular network
really haven’t started broadly but I expect this to pick up in 2019 although
extensive 5G build-out activity isn’t expected to begin until 2020. With these
buildouts, I see a significant growth in fiber buildouts for small cells. In the
past, operators ran into permitting challenges: even though they had the labor and
materials available for cell densification, local municipalities delayed
deployments. As a result, fiber builds to support fronthaul and backhaul for
small cells lagged until cellular network densification could begin in earnest,
which will happen in 2019.
There is no doubt that 5G wireless will be the major growth
driver for multiple service providers in 2019 and beyond. There will be a
magnitude of cell sites needed than what we have today, and many of these will
be small cells; however most of the deployments in the next year will be test
sites, validating architecture and methods in advance of full rollouts.
We will also need more fiber to connect small cells, as they
can require 4 to 12 and in some cases 24 fibers per site. Finally, 5G will see
the advent of truly converged wireless and wireline networks, and vendors will
need to offer a total infrastructure solution that covers both sides of the
network. As we get closer to 5G next year, it will start to create a new level
of competition among service providers for lit and dark fiber services to small
cells and competition between operators for all connected things.
So, while global markets are relatively calm these days
because of fiber saturation and decreasing competition, I believe we will see
frenetic activity again starting in 2019 as carriers deliver 5G wireless and
converged network infrastructure. Hardened connectivity technology will
continue to gain popularity, and the resulting deployment speed improvements
will be important as the market scrambles to support the next wave of outdoor