FTTH: A Strategic Game-Changer for Telcos - How Can Telcos Leverage FTTH to Reinvent their Business Models and Adapt to Evolving Usage Patterns?

FTTH is now widely considered a goal for fixed connectivity. On many accounts, this technology widely differs from other available broadband solutions, which fosters new usages and makes way for new entrants.

This report raises questions about the potential impact of FTTH on telcos' market environment and business models, and how they will adapt, and contemplates the following points:

• Could FTTH network deployments reshape the competitive environment in fixed telecommunications markets?
• How will FTTH technological capabilities impact the demand side?
• What are the best practices for telcos when dealing with FTTH impact on business models?
• What are the development opportunities for telcos generated by the capacities of FTTH networks?

Geographic area

World

Players

• Altice
• Amaysim
• Amazon
• Antel
• Bouygues
• BT
• CETIN
• Deutsche Telekom
• Flexom
• Netflix
• NTT
• Orange
• Telefónica
• Telia
• TIM
• Trust Power
• Verizon
• Vocus

Table of Contents

1. Executive summary

• 1.1. FTTH poses potential threats to telcos
• 1.2. FTTH is an opportunity for telcos to rethink their core business
• 1.3. Beyond faster downstream speeds, FTTH technology offers many more opportunities for telcos

2. Introduction

• 2.1. Reasons to deploy FTTH are becoming more compelling
• 2.2. FTTH demand is intensifying and this trend should continue in the future: what does this mean for telcos?

3. FTTH: a potential threat to telcos' traditional business models

• 3.1. FTTH is reshaping market structures and dynamics
  • 3.1.1. FTTH deployments result in a proliferation of challengers on the market
  • 3.1.2. FTTH network deployment can shake up competition: Sweden as a case study
  • 3.1.3. FTTH-oriented objectives exert pressure on capex
• 3.2. Telcos' traditional business models in doubt
  • 3.2.1. Customer demand for premium content generates additional expenses for telcos
  • 3.2.2. OTT growth is fuelled by the quality of service provided by FTTH
  • 3.2.3. Telcos are therefore at risk of disintermediation

4. In response, telcos need to rethink their core business

• 4.1. Maximizing core business efficiency
  • 4.1.1. FTTH provides lower opex than other technologies and helps optimise telcos' internal processes
  • 4.1.2. Operators are slimming down their offerings to match customer demand
• 4.2. Rethinking telcos' positioning in the video content value chain
  • 4.2.1. Operators are complementing their offerings with OTT services, on their own or through partnerships
  • 4.2.2. Operators generating growth from the production of exclusive content

5. FTTH opens opportunities in new growth areas which telcos need to seize

• 5.1. Once the FTTH network is deployed, telcos must be creative and work with existing and new players to increase revenue and diversify their portfolio
• 5.2. Expanding fibre into the telecom industry: wholesale of fibre capacity
  • 5.2.1. Regulations force telco to share its infrastructure with others
  • 5.2.2. Telco separates into two functional bodies: infrastructure and retail
• 5.3. Expanding into the B2B segment
  • 5.3.1. Fibre to support critical operations of the core business
  • 5.3.2. Examples: Deutsche Telekom and BT: B2B central to fibre expansion
• 5.4. Exploring new verticals: construction & real estate
  • 5.4.1. Opportunity to deploy fibre in new buildings
  • 5.4.2. Fibre as an enabler to increase property value
• 5.5. Creating Infrastructure synergies in the IoT ecosystem
  • 5.5.1. Smart homes/buildings
  • 5.5.2. Smart homes/buildings: a growing market where FTTH can tackle different segments
• 5.6. Creating synergies with vertical players
  • 5.6.1. Synergies in network construction: power companies
  • 5.6.2. One step ahead: why Telcos could start selling electricity
• 5.7. Exploring new verticals: smart cities

6. Conclusions: FTTH pushes telcos to take their service portfolio beyond telecommunications and content

List of tables and figures

• Figure 1: Technological innovations for FTTH deployment: mole ploughing and shallow trenching
• Figure 2: Number of SDN and NFV projects per statues, 2016-2017
• Figure 3: FTTx homes passed by technology, worldwide, 2014-2017
• Figure 4: Number of FTTH/B subscribers, worldwide, 2014-2022f
• Figure 5: Issues and perspectives of different types of players deploying FTTH
• Figure 6: Local fibre network ownership
• Figure 7: FTTx in total broadband, at end of 2017
• Figure 8: FTTx players market shares, at end of 2017
• Figure 9: Capex comparison of various access technologies at different subscriber densities
• Figure 10: Technical capabilities, per type of network
• Figure 11: Number of FTTH/B subscribers and Netflix subscribers, worldwide, 2014-2017
• Figure 12: Value chain for video content
• Figure 13: Comparison of capex and opex elements between different fibre technologies
• Figure 14: Examples of double-play fixed internet/telephony bundles with TV as an option
• Figure 15: Types of strategies adopted by telcos regarding OTT platforms
• Figure 16: Examples of distribution partnerships between OTT video platforms and telcos
• Figure 17: Examples of telco companies investing in content production
• Figure 18: Regulations force telco to share its infrastructure with others
• Figure 19: Telco separates into two functionnal bodies: Infrastructure + Retail
• Figure 20: Flexom connected home
• Figure 21: Smart home and smart building object installed base, 2015-2025, worldwide
• Figure 22: How telcos and power companies cooperate for fibre deployment
• Figure 23: Evolution of fibre-based services
• Figure 24: Conclusions: how FTTH changed the game for telcos