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Written by Dave Burstein
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Monday, 07 June 2010 10:19 |
Mike Wheeler of NTT America is delighted with his new Cisco ASR9000s. Within 12 months, he expects to upgrade to 100 gigabits connections. Brad Hokamp of Telx has just announced a nationwide "Ethernet Exchange" along with Neutral Tandem, all running the Cisco ASR9000. Brad echoed the praise. The "9K" was working well.
Wheeler expects the 9K to enable his large customers to jump from 10GigE to 100GigE within twelve months, a market he expects will boom. Per bit, 100GigE ports will be much cheaper than 10 or 40GigE. Very large customers are paying as little as $1.5/megabit for transit, according to actual bids. Smaller customers, anywhere near a major city, can usually find prices well under $10/megabit.
Cisco's "edge router" market share is 5% higher this quarter, at 47%
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Written by Dave Burstein
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Wednesday, 26 May 2010 17:28 |
City Telecom/HKBN doubled their dividend as profits rose 54%. They added 73K broadband subscribers over six months while everyone else was flat to down. Chairman Wong Wai Kay has set a "10-year Big, Hairy, Audacious Goal (BHAG) of becoming the largest IP provider in Hong Kong by 2016. We are not only aiming at providing better service than the incumbent, but also services that they cannot match with the legacy network." They've now doubled up, offering a gigabit (really) for $27 (U.S.), an incredible story. Xavier Niel in France proved a low price strategy (30 euro triple play) can make money and HKBN is actually profitable enough to pay corporate income taxes.
ARPU for broadband fell from $23 to $17 (U.S.) but that was more than compensated by customer growth and sale of phone and other services. City is doing well enough to apply for an over the air free TV license and continue expanding the network. 100 meg is available to 1.68M apartments and 1,300 corporate buildings, with 1 gig only in those with fiber all the way to the apartment. By the end of 2011, they expect to reach 2.1M homes, about 90% of Hong Kong. Their cost per apartment passed is about $100 (U.S), crucial to the business model.
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Written by Dave Burstein
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Thursday, 22 April 2010 11:50 |
 Verizon recently confirmed they will add 3M FiOS homes in 2010 but have now cut that to 1M for budget reasons. They implicitly also confirmed they are cutting back future FiOS builds as well by 2-4M homes from the original plans of 80+% of homes passed. Verizon to get a New York City and other franchises have promised 100% local deployment, so unless they breach the franchise agreements they will reach 18-19M in a few years. This is consistent with my report that Verizon is cutting expenses to increase cash flow before Ivan Seidenberg's retirement. Ivan says a deal to sell to Vodafone is highly unlikely; I have no way of determining whether he is just playing hard to catch. Ivan personally would likely be ahead by $tens of millions if he sells, a powerful incentive. This is purely speculation; Ivan doesn't open his heart to me.
FiOS remains the best large network in the Western world, so denying it to 10M homes is a major political issue. Baltimore, with a large minority population, is not getting fiber while Maryland suburbs are. Baltimore is literally demonstrating in the street about that. The pattern is repeated, with inner cities and poorer rural areas getting inferior service. Verizon says they are not red-lining based on income but that's the practical effect of their plans. I've asked for, but haven't been given, the demographics of FiOS vs. non-FiOS territories. Unless they release that data, I'm going with Congressman Waxman's analysis they are providing inferior service - literally a tenth the speed - to the poor.
I've also sent a request for comments to the five FCC commissioners and the head of NTIA. D.C. claims they are making progress on broadband, but with this 2M cutback by Verizon following the 4M cutback by AT&T that's hard to accept. Most in D.C. are also ignoring the frequent and massive rate increases dating back to 2007 that are the leading cause of the slow uptake of broadband.
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Written by Dave Burstein
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Wednesday, 14 April 2010 02:24 |
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Reggefiber in Zeewolde is introducing 200 megabits symmetric in Zeewolde, using fiber home. In Lithuania, TEO Lintel is also offering 200  megabits over parts of a network reaching 1/3rd of the country, expanding rapidly with Telia Sonera money behind them. This information, and the title quote, is from Broadband Properties, which has emerged as the leading publication on fiber deployments.
This is a worldwide movement driven by technical advances. Anywhere you have fiber - or really good copper - speeds are ready to go up. Todd Spangler at Multichannel News is reporting cable is working on gigabits (shared) over coax. Google's Sergey Brin is the U.S. face of gigabit fiber and I know two small carriers ready to unleash gigabit to the home. Occam has shipped 100,000 ports in the U.S. ready to offer a full gig. Mike Quigley in Australia is ready to reconfigure the Australian national network to a gig. Packetfront, which supplies Reggefiber, the Emirates and a dozen north European fiber providers with gear designed up to a gig per home, just raised €9.5M in new financing.
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Written by Dave Burstein
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Sunday, 30 May 2010 13:30 |
 Wei Leiping of China Telecom holds competitive tenders for 10M lines in order to bring down prices. In March, the bids for both GPON and EPON came in at around $100, end to end including a basic network ONU and home ONT. Korea reports similar prices. DSL, cable modems and simple Ethernet (100K or gigabit) remain cheaper, $20 to $50 in million quantities, but the difference over a ten year or even three year service life is small.
A world-class technologist explained to me last September what it takes for GPON to match EPON in price. "The major component difference is that standard GPON is designed for a 20 kilometer reach and requires a more powerful laser. If the customer doesn't need that reach, the manufacturing cost is similar." Most of China is so densely populated the range isn't necessary and Wei is going for the savings.
Verizon is pressing to actually extend GPON range to 100 kilometers so it can eliminate many central offices for huge opex savings. Like KPN in Holland, they expect windfalls from real estate sales.
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Written by Dave Burstein
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Wednesday, 19 May 2010 09:04 |
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)  Half of Canadian homes will get fiber all the way home, Glen Campbell of Merrill expects, after Bell Aliant announced they would spend $350M (Canadian) to reach one-third of their territory in the next two years and continue building after that on the 90% of their plant that is not buried. Campbell expects Bell Canada itself (which controls Aliant) and Telus to follow suit, at least in the 50% of their territory that is aerial.
$650/home (Canadian) is Bell's projected cost, based on their already substantial fiber deployment. Jeff Fan of Scotia Capital researched the projected Bell buildout and discovered most homes were spread out and in very small clusters. That would require far more "node" boxes than the AT&T build and not be dramatically less expensive than full fiber over time.Analysts like the move and the related dividend cut. "S&P confirmed its ‘BBB’ rating for long-term corporate credit and upgraded its outlook from negative to stable," the company reports.
Fan's comment "FTTH is the only real defence for telcos against cable,” is informed by some remarkable success on the cable side. "Bell Alliant is bleeding market share to rival EastLink," the Globe and Mail reports.
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Written by Dave Burstein
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Saturday, 17 April 2010 11:13 |
Wilson Young made headlines around the world with a $27 (U.S.) price for a gigabit - with a big catch. It is "up to" one gigabit in-country but the speed connecting outside the country is limited to 20 megabits symmetric, both up and down. $27 for 20 meg up and down is still a damn good deal. More than 90% of HK web traffic is local, including Google and Akamai local servers. No caps or other gotchas visible. It's only available in the building where HKBN has installed fiber all the way to the apartment, a minority. They serve most of the rest of Hong Kong with 100 megabits for $13 using fiber to the basement.
These prices approximate the marginal cost of the service, with City Telecom/Hong Kong Broadband Network sacrificing margin for very fast growth. You can add voice ($9) and IPTV ($17) for a triple play at about $40 (100 meg peak) or $55 (gigabit peak.) That's not far different from the French 30 Euro/$45 triple play, now increasingly at 100 megabits. Xavier Niel is making $hundreds of millions at that price, proving it's possible.
What HKBN knows is that no matter how high you increase the peak speed there is only a modest increase in actual bandwidth required. A user with 100 meg uses about 1/3rd more bandwidth than one at 10 meg.
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Written by Dave Burstein
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Wednesday, 10 March 2010 19:52 |
Larry Babbio in 2003 announced a plan for a once in a generation transformation of nearly all of Verizon lines to fiber. They've built the best large network in the Western world for half their customers,  but 15M Verizon homes remain unfibered. They did the rich suburbs first, and their decision to stop unexpectedly is hurting people of color in particular. Congressman Markey warned about redlining in 2005. Verizon's Jack Hoey explained "the only reason the company has so far disclosed service deployments in suburbs is because construction is faster and easier there. 'We're very anxious to provide a choice for broadband and cable services to not only suburban but also urban customers, without question, unequivocally,'" (Peter Howe, Boston Globe) The city has long been ready to start. “We’ve been standing on our heads saying we’ll work with you,’’ said Mike Lynch, director of Boston’s Office of Cable Communications to Hiawatha Bray of the Globe.
Instead, Boston will apparently never be reached, although FiOS is in most of the affluent suburbs. Baltimore may be in a similar position. In 2007 Sandy Arnette of Verizon said they'll reach the city. “Stay tuned -- recognizing that we cannot build a fiber-optic network everywhere at once. We'll work through these issues in Baltimore knowing it's a good market for us.” (Jay Hancock, Baltimore Sun) In New York in 2008, Verizon had fiber to 100% of mostly white Staten Island, but only 6% of the Bronx. (Josh Breitbart, Gotham Gazette).
Because Babbio and Seidenberg were both so clear they intended to reach most Verizon homes, I believe those were honest statements at the time. Babbio is now gone and Seidenberg about to retire. John Killian and Lowell McAdam, heirs apparent, don't have Ivan's competitive edge. Ivan himself had an epiphany last summer which he shared in his "Voice is Dying" speech at Goldman Sachs. It appears that soon after a strategic decision was made to stop FiOS after 2010 except where formal commitments had been made. Last fall, they canceled work in Alexandria, Virginia, which they had told the city was set to begin after they got a franchise; they've now formally backed away from the city.
Special thanks to Hiawatha Bray, Pete Howe, Josh Breitbart, Jay Hancock and Bryant Ruiz Switzky for the reporting that made these articles possible. Communities are paying a heavy price as newspapers are dying and reporting like this becomes scarce. I had placed this article temporarily on hold pending data from Verizon to confirm their assertion of errors above. Despite two requests, they provided no contrary data.
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