July 19, 2012 – Copper networks continue to be a cash cow for telephone companies (telcos), delivering broadband over DSL to more than 367 million subscribers worldwide in 2011, says ABI Research. And while fiber-to-the-Home (FTTH) technologies bring 10x the bandwidth compared to advanced DSL, upgrades to DSL require a fraction of the investment of upgrades to FTTH.

“Financial instability in the advanced economies of Western Europe and lack of innovative internet video services force telcos to look into the cost-to-value proposition delivered by making large-scale investments into FTTH,” said Adarsh Krishnan, senior analyst of TV & Video at ABI.

“Strong government initiatives to develop fiber infrastructure have, in most cases, been a necessary prerequisite to fund FTTH or fiber-to-the-building (FTTB) deployments,” noted Sam Rosen, practice director of TV & Video at ABI. Worldwide, FTTH/B service revenues reached $29.6 billion in 2011.

Innovative internet video services (including IPTV and OTT [at HD resolutions]) give telcos the necessary competitive edge for triple-play (telephone, internet and TV) and quad-play (+mobile phone) services that have been lacking against competing cable operators, notes ABI. Even in the absence of fiber upgrades, telcos can compete with triple-play services; for example, AT&T U-verse delivers IPTV over ADSL2 at 15 Mbps bandwidth.

Global revenues from DSL broadband services have seen incremental growth in service revenue to reach $106 billion with a CAGR growth of 14% in the last five years up until 2011.

These findings are part of ABI Research’s Broadband CPE service, which provides an outlook on telcos network deployments, consumer adoption and service revenues for DSL and fiber broadband services. An analysis of key trends, current/emerging technologies—as well as drivers and inhibitors influencing consumer adoption of telco broadband services—is also presented.