KEYMILE: Demand for Broadband Drives Investment in the Telecommunications Market
Hanover, Germany, March 22, 2012 – KEYMILE estimates that the German telecommunications market will be marked by three trends arising from the constantly growing demand for more bandwidth in the next few years. This will lead to further growth in the number of VDSL2 and optical fibre connections. Likewise, open access networks will be expanded in order to distribute costs more effectively.
The German telecommunications market has made significant strides in the last year in terms of expanding broadband in rural areas and eliminating “white spots”. That being said, many challenges still remain for 2012 and 2013.
Demand for more bandwidth is one of the central themes driving the market.
According to a recent study published by the inter-branch organisation VATM and the market research company Dialog Consult, the volume of data generated by broadband connections increases by approximately 20 per cent year-on-year and has tripled over the past five years. Video data accounts for approximately 40 per cent of all Internet traffic and, according to projections, this is set to rise to 90 per cent by 2014. Private households and companies use bandwidth wherever it is available. Based on market research conducted by KEYMILE, a leading supplier of cutting-edge technology for communications solutions in access and transmission systems, demand for the ‘optimum’ broadband connection is set to increase nearly six-fold from
2011 to 2016, from 25-30 Mbps to 150-200 Mbps. This is primarily driven by increased demand for IPTV services.
Network operators operating across Germany and regional telecommunication carriers need to consider the ISDN heritage, in addition to taking the constantly increasing demand for broadband Internet into account. For instance, multi-service access platforms are especially well suited for areas where broadband Internet has only recently been rolled out. They allow network operators to simultaneously provide broadband Internet and legacy telephone services. In this way, private households and companies can continue to use their old devices while also benefiting from new services.
KEYMILE has identified the following trends that will play a decisive role in how the telecommunications market develops in Germany:
1. VDSL2 growth is an important stepping stone along the path toward FTTH networks
VDSL2 is available in most cities and increasingly in rural areas as of the beginning of this year. This has given roughly one third of households access to high-speed Internet. This growth is set to continue in order to eliminate white spots (areas where broadband connections are insufficient).
Optical fibres are installed up to the street cabinet (FTTC) for VDSL2 broadband connections. This is a good starting point for future expansion of optical fibre to buildings (FTTB) and homes (FTTH). Network operators can provide ADSL and VDSL2 services with just one card thanks to modern VDSL2 cards. They are furthermore in a position to deliver triple play services such as broadband Internet, VoIP, Video on Demand, and IPTV to private customers over DSL. Plus, the latest vectoring technology reduces drops in performance during mass rollouts to provide data rates of over 50 Mbps for multiple simultaneous VDSL signal transfers.
2. Expansion of the optical fibre network gradually gains momentum
VDSL2 vectoring is an ideal stopgap measure on the way to providing high bandwidths in FTTH networks. Germany still lags behind other European countries as far as optical fibre broadband expansion is concerned. For example, ten per cent of all connections in Lithuania, Norway and Sweden are fibre optic, compared to less than one per cent in Germany. However, expansion is gathering momentum, driven primarily by local and regional public utilities and telecommunication carriers. They have set up new optical fibre networks or expanded existing ones in Munich, Oldenburg, and Schwerte for example.
3. Better distribution of costs with open access networks
Expansion of the optical fibre network to every household requires tremendous investments in infrastructure with a long return on investment time, which is unusual for network operators. The distribution of costs will be made easier under a new regulation on the expansion of open access networks recently adopted by the Next Generation Access (NGA) Forum. These open access networks allow multiple network operators to easily access local loops. The potential distribution of costs in open access networks is likely to encourage greater investment in optical fibre networks. The German Federal Association of Broadband Communication estimates that further investment is likely to increase the number of households with fibre optic connections by three-fold by 2015.
“Industry experts believe that demand for high speed broadband connections is set to increase six-fold between 2011 and 2016. So continuing to develop
VDSL2 connection points is an important step,” says Klaus Pollak, Head of Consulting and Projects at KEYMILE in Hanover. “In the long term, optical fibre networks are the only way to meet growing demand for broadband services. Substantial investment is needed for this. Above all, local projects that involve partnerships of cities and regional energy suppliers, for example, are able to raise the financial resources needed to expand the optical fibre network. In the meantime, VDSL2 represents a stopgap technology that creates the necessary infrastructure for complete and uninterrupted optical fibre connections from FTTC to FTTB/FTTH.”
KEYMILE is a leading supplier of cutting-edge technology for communications solutions in access and transmission systems. The flexible and robust IP-based multi-service access platforms allow telecommunications providers to supply a variety of voice and data services via copper wire and optical fibre. Simultaneous availability of IP/Ethernet and TDM technology guarantees smooth migration to the Next Generation Network. Keymile systems are used for reliable data transmission in mission-critical areas of telecommunications networks used by railway companies and energy suppliers, as well as in mobile and professional mobile radio networks. The company has major business bases in Germany and Switzerland, as well as subsidiaries and partners worldwide. It has installed systems in more than 100 countries. For further information visit