In several of my previous BTR columns, I focused on how and why North and South American cable operators are moving to fiber. I examined the factors driving U.S. and Canadian cablecos to deploy fiber-to-the-home (FTTH) networks in their regions.
Now I would like to travel from my base in North America across the Atlantic Ocean to Europe, where the fiber frenzy maybe even more intense than it is in the Americas. Indeed, except (possibly) for parts of Asia, Europe is now leading the world in adopting new fiber broadband infrastructure.
Indeed, European cable operators and other service providers have deployed fiber so broadly that fiber is now the leading broadband technology platform across the continent. FTTH networks accounted for an impressive 42% of all broadband subscribers in Europe last year, easily beating out cable hybrid fiber-coax (HFC) and telco DSL networks, according to the latest market statistics compiled by Omdia.
“Fiber [in Europe] has proliferated over the last five years,” said Julia Schindler, senior analyst for European markets at Omdia. During Light Reading’s Cable Next-Gen Europe digital symposium in late June, she noted that FTTH had boosted its broadband subscriber market share to 42% from 26% over the past four years.
Notably, most of the fiber’s growth has come not at the expense of cable. Instead, it has come at the cost of DSL, which up until 2021, was the top broadband platform in Europe and still controls 36% of the market.
“European operators are very much focused on migrating DSL customers onto fiber networks to monetize the infrastructure investments that they have undertaken or are still in progress,” Schindler said. “Cable’s share has remained broadly stable.”
Some European countries particularly stand out in their adoption of fiber. Take Spain, where fiber accounts for more than 80% of the nation’s broadband subscribers, leading the entire continent as such large cablecos as Vodafone Spain pivot almost entirely to fiber, mainly in greenfield areas.
“It’s not a question of the technology,” said Angel Campos, manager of network design and engineering for S.NGA evolution at Vodafone Spain, speaking during Light Reading’s Next-Gen PON digital symposium in late June. “It’s a question of how complex it is to evolve from a DOCSIS network to a fiber-to-the-home network.”
And Spain still needs to finish its fiber rollout. Omdia projects that FTTH networks will command 90% of the Spanish high-speed data market by 2027 as Vodafone Spain and other cable operators continue their fiber rollouts and such major telcos as Telefonica switch off their DSL networks by the end of 2024.
“[Spanish] Operators are focusing on ultra-rural areas,” Schindler said. “So, they’re filling the last gaps now.”
Meanwhile, French fiber deployments have surged over the past few years. With fiber lines accounting for nearly 60% of French broadband subs today and significant cable operators such as Altice Europe’s SFR Numericable unit aggressively carrying out FTTH builds Omdia projects that the number will shoot up to almost 90% by the end of 2027, like that in Spain.
Jeff Heynen, vice president of broadband access and home networking for Dell’Oro Group, said France is one of the European markets that will not see upgrades to DOCSIS 4.0. “Altice had deployed fiber deep years ago, reducing service group sizes to less than 100. From there, it has overbuilt and expanded with fiber to compete more with Orange, Bouygues, and Free.”
Likewise, in Romania, Russia, and Sweden, fiber’s share of the broadband subscriber market has either scaled or is now approaching 80%. Other European standouts include Belarus, Finland, and Portugal, which now have fiber lines connecting more than 60% of their respective broadband homes.
Europe’s aggressive stance
Robert Conger, senior vice president of technology and strategy at Adtran, said Europe is much more aggressive than North America in deploying fiber. He expects that trend to continue as European operators increasingly seek to meet the regulatory mandates set by their national governments.
Even cable-centric nations that have seen relatively little fiber activity up until now are starting to shift significantly to FTTH. Two prime examples are the United Kingdom and Ireland, where Liberty Global’s Virgin Media unit has embarked on an ambitious program to blanket the two countries with fiber through a joint venture with Telefonica and another investor.
In the United Kingdom alone, plans call for deploying fiber to as many as 28 million homes passed by 2028, mainly in greenfield areas, even as the cableco upgrades many of its legacy cabled sites to DOCSIS 4.0, according to Bill Warga, Liberty Global’s vice president of technology and strategy.
“It’s country-specific in how we target where we’re going to put fiber in,” Warga said in a fireside chat during the Cable Next-Gen Europe symposium. “It just depends. It’s nice to have DOCSIS 4.0 and fiber in your toolbox to target even within a country, certain markets, or certain demographics.”
Similarly, in Germany, Vodafone Germany recently formed a joint venture with Altice to extend fiber to seven million unserved locations throughout the country. Much like the United Kingdom, Germany, until now, has been a market dominated by cable.
Of course, as in North America, cable HFC networks are gradually disappearing from the European landscape. Most cablecos are continuing to upgrade their existing HFC plant to DOCSIS 3.1 and potentially DOCSIS 4.0 even as they install fiber in greenfield areas or, as in Virgin Media’s case, overbuild their legacy networks.
“It’s not like HFC is going away,” Warga said. “This is not a forklift type of implementation. HFC is going to continue to be there. It’s just targeting where fiber makes the most sense and where you need to be on par with competition.”
But, even with that caveat, fiber is clearly on the upswing across most of the continent, even in poorer areas such as sections of Eastern Europe and in colder climates such as in Scandinavia.
“The Nordic countries are also seeing this pivot to fiber,” Heynen noted. “Elisa, TDC, and Netia are all expanding and overbuilding with fiber.”
Efficiency, regulatory drivers
Why are European operators moving to fiber so aggressively these days? The high cost of energy, for one. With power consumption costs soaring across the continent, especially since the Russian invasion of Ukraine began early in 2022, operators have been scrambling to contain those costs as best they can. Deploying energy-efficient fiber lines offers a significant way to do just that.
“Energy costs in Europe have skyrocketed, starting last year,” Conger noted. As a result, he said, operators have set “very, very aggressive targets for cutting power consumption.”
Second, on the American side of the Atlantic, more and more European consumers are clamoring for faster broadband speeds and more excellent bandwidth capabilities. “We’re seeing an accelerated demand from consumers, with COVID-19 being a key growth driver because it highlighted the benefits of fast and stable broadband connectivity,” Schindler said.
Third, as mentioned earlier, regulatory mandates increasingly require operators to build fiber networks, especially in unserved and underserved areas. In France, for instance, the national government has mandated the construction of a nationwide fiber network by 2025 and switching off all DSL connections by 2030.
“Fiber has become a priority for European governments, regulators, and operators, which has accelerated the rollout across those countries,” Schindler said. In particular, she noted that the European Commission has set ambitious fiber rollout targets for its member states.
Fourth, cable HFC networks differ from the dominant broadband platform in Europe, like the United States and Canada. As a result, cablecos have a greater incentive to innovate and try something new rather than stay entrenched and defend their legacy turf through HFC and DOCSIS upgrades.
That’s particularly true in Eastern Europe, which has much less cable HFC infrastructure than its Western counterpart. In addition to Russia, Romania, and Belarus, other Eastern European nations such as Latvia and Estonia have been deploying lots of fiber. As a result, FTTH’s share of the broadband market in Eastern Europe is an impressive 61%, nearly double its 32% market share in Western Europe, according to the latest Omdia stats.
“Legacy networks were less developed in Eastern Europe, so incumbents were much faster to switch to fiber,” Schindler said. “Western Europe incumbents were more focused on upgrading their existing networks.”
Furthermore, unlike in North America, only some pure cable operators are left in Europe. Most cablecos, such as Virgin Media, Vodafone Spain, Vodafone Germany, and Vodafone Ziggo in the Netherlands, are now part of more giant telco-oriented conglomerates. Thus, they are less wed to legacy HFC networks and more open to fiber alternatives.
Thanks to all these trends, Schindler said Omdia expects fiber’s share of the entire European broadband market to reach 62% by 2027, up from the 42% mark in 2022-and this, despite the rising costs of materials and increasing labor shortages that slow the pace of growth. Breaking that figure down between the two primary regions, she expects Western Europe’s fiber share to jump to 68% and Eastern Europe’s share to climb to 70%.
“There will be much growth over the next five years,” she said, noting that Western Europe will take over as the primary growth engine on the continent. In particular, she expects Germany, the United Kingdom, Belgium, the Netherlands, and France to lead the fiber charge over the next five years.
When it comes to fiber broadband, our European friends know a good thing when they see it.
Gary Bolton is the president and CEO of the Fiber Broadband Association.