Bell will spread out its IPTV investment with a hybrid approach

The big question facing telephone companies as they build networks for delivering IP-based television services is: fibre to the premise (FTTP), or fibre to the node (FTTN)? With FTTN, fibre extends to the last kilometre, but signals travel over copper to reach individual homes. For the time being, copper bonding and VDSL2 technology will be used to increase bandwidth to address longer loops and offer premium IPTV services, said Bell Canada director of access network technology Jean Huppé at VON Canada, a recent conference devoted to digital telephony. "Fibre to the premise is the end game, but completely fibre-izing access could take 10 to 20 years," Huppé said. " focuses the investment to one specific area at a time, leaving the others exposed to cableco competition for many years." Consequently, Bell is implementing what it calls a hybrid FTTN-FTTP deployment, initially rolling out networks to the node followed by gradually implementing FTTP, with completion of a full fibre network slated for 20 to 25 years from now. "We’re leveraging this hybrid approach to match...demand with the speed of deployment, so we don’t miss opportunities." FTTN is also very much a timing play for Bell: according to Huppé, it can be deployed three to five times faster than FTTP. "We cannot wait for churn, for natural attrition of subscribers, to fibre-ize neighbourhoods," he added. Huppé added that a FTTP approach is unnecessary in that the first homes to receive direct fibre will have more capacity than they need for a few years, since the full potential of IPTV won’t be available right away. FTTN will cover more subscribers quicker and allow providers to install FTTP as the premium services become available. And from a cost standpoint, FTTN is five to 10 times cheaper than FTTP; with the price of FTTP expected to drop in the next two to three years, the benefits of spreading out network investments over time are apparent. The main reason behind IPTV, of course, is to give telcos a television bundling option with which to defend themselves from subscriber loss due to cableco telephony services. Glen Campbell, first VP of telecommunications and media at Merrill Lynch & Co. Inc., said for IPTV to be immediately successful the content needs to match or exceed that of cable and has to offer value for customers. Campbell sees IPTV strictly as a defensive move by the telcos, which it will remain until more flexible packaging or à la carte channel selection become available. While Bell doesn’t yet offer IPTV, Huppé said the company is currently working with Microsoft Corp. on a platform, and promised that Bell’s service will be "a jump ahead of what IPTV is offered right now." The ability to have a browser open on your television screen – and the attendant potential advertising and purchasing options – are natural extensions that could make the telco’s multi-billion dollar network upgrades pay off down the road. But multiple layered services also raise questions about bandwidth constraints. Huppé’s potential evolution path to full FTTP features data delivery speeds of 25 Mbps for the first five years, 50 Mbps through VDSL2 and FTTP installations after that, and 100 Mbps once a full FTTP network is in place. With high-definition TV carrying a minimum compression rate of more than 9 Mbps, it might be difficult to offer programming that’s as good as cable from the outset. But its choice of a hybrid network rollout shows that Bell is willing to risk the potential initial loss of some subscribers because of bandwidth limitations, rather than target a direct FTTP launch and face the possible mass churn in the unserviced areas.

Bell will spread out its IPTV investment with a hybrid approach

News | 04/21/2006 4:00 am EDT

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