International. Service providers have significantly expanded their outdoor broadband networks in recent years, as competition and high user demand have led to huge fiber optic developments.
However, much of that work has been completed or is underway around the world, and with a broad scope of wireless 5G technology (and the renewed demand for fiber extension) in a couple of years, the prospect for 2019 is less true for network operators and their suppliers. But there is more, there are also trends that affect the external broadband network and technology needs for next year.
Reduction of competition in North America
At 2019, service providers are expected to meet their customers' data consumption needs by leveraging their existing FTTH networks or by upgrading existing infrastructure through the use of a hybrid coaxial and fiber optic (HFC) cable and a remote PHY combination and DOCSIS 3.1. While these are not necessarily new technologies, for Ric Johnsen, Senior VP, PLM Outside Plant Solutions at CommScope, they respond to the general pause recently observed in the growth of outdoor broadband networks in North America. "Although service providers have not experienced the data consumption they saw in the last three or four years, they are expected to implement more of these solutions to continue to meet the needs of subscribers without a complete overhaul of their networks."
While the growth rate of data consumption has decreased, a relatively calm competitive environment is also sighted and it is expected to continue in 2019. In recent years, operators have invested heavily to keep up with major competitive initiatives, such as the requirement of AT & T (in acquisition of DirectTV) to pass 12.5 million homes with fiber and Google's efforts to build their own fiber optic networks in different cities. Both factors stimulated high fiber demand, but as competitive initiatives have declined in recent years, other service providers are less inclined to be aggressive in fiber deployments.
"Another reason for the reduction in competition is that there are fewer competitors in the North American market due to consolidation. Charter, Time Warner and Bright House were consolidated into one company; Suddenlink and CableVision consolidated in Altice; and AT & T bought Time Warner in June from 2018. Operators are still preparing for a fiber deployment thrust that will support 5G, but will not start broadly until 2020, "added Ric Johnsen.
FTTH expansion in Europe and limited growth in other regions
Some of the big trends outside the US for 2019 they include fiber-to-the-home (FTTH) deployments, connectable and reinforced connectivity solutions, lack of growth and consolidation. In Europe, for example, government directives, subsidies and subsidies are encouraging the development of FTTH, so there will be an additional increase in the expansion of fiber optic in the United Kingdom. Similarly, Germany is expected to start its FTTH development at 2020, France is halfway to its fiber expansion and Spain has completed most of its projects in the main cities. Therefore, by promoting more fiber deployments, growth will be much more controlled because it is the subsidies of governments, not competition, that are driving growth.
Outside of the United States, there is a need for plug-and-play technology, as the speed of implementation and the shortage of skilled labor become a major problem with larger deployments. This helps reduce the first installed total cost of these deployments and allows for aggressive deadlines.
Similarly, there is a greater need in 2019 for enhanced connectivity, which has proven to be as robust, or even more, than spliced connectivity. Some major storms, such as Hurricane Helene in Ireland, have hit areas where there is stronger connectivity and there was no damage to these networks. Some providers do not like the limited number of reinforced connectivity equipment providers they can use, so they stick to older techniques, but in general, providers will look for connectivity and reinforced indexed fiber for reliability, speed of deployment and the labor costs they need.
"Latin America, Southeast Asia, the Middle East and Africa are potential markets, but the unwillingness of operators to invest and the delay of projects will continue to slow growth at 2019," Ric Johnsen said. "The availability of skilled labor is another barrier to growth. But there are some points to highlight in these markets:
Mexico is deregulating its market, and we are seeing that Telmex talks about the approval of several million homes per year in the foreseeable future.
In Puerto Rico, Liberty Global spent 100,000 houses with fiber as part of its reconstruction after Hurricane Maria. "
As in North America, consolidation will be another trend that will reach these international markets. In Mexico, América Móvil continues to acquire service providers in Central and South America, and Telecom Italia and Spain's Telefónica are acquiring suppliers in Latin America.
The calm before the 5G storm
The deployments associated with the densification of the cellular network have not yet begun, but they are expected to do so at 2019, although the extensive 5G development activity is not expected to start until 2020. With these changes there will be a significant growth in the development of fibers for small cells. In the past, operators faced permit challenges: although they had the labor and materials available for cell densification, local governments delayed deployments. As a result, the fiber is built to support fronthaul and backhaul for small cells delayed until the densification of the cellular network can begin in earnest, which will occur in 2019.
There is no doubt that 5G wireless connectivity will be the main growth engine for multiple service providers in 2019 and in the future. There will be a magnitude of cellular sites needed from what we have today, and many of them will be small cells; however, most implementations in the next year will be test sites, validating the architecture and methods before full implementation.
We will also need more fiber to connect small cells, since they may require 4 to 12 and in some cases up to 24 fibers per site. Finally, 5G will see the arrival of truly converged wireless and wireline networks, and providers should offer a total infrastructure solution that covers both. "As we get closer to 5G the following year, we will begin to create a new level of competition among service providers for the services of fiber lit (lit fiber) and dark fiber (dark fiber) to small cells, as well as the competition between operators for all things connected.
So, while global markets are relatively calm for now due to fiber saturation and declining competition, I think we will see a frenetic activity again from 2019, when operators offer converged and wireless network infrastructure for 5G. The enhanced connectivity technology will continue to gain popularity, while improvements resulting from the speed of implementation will be important as the market rushes to support the next wave of outdoor networks, "he concluded for Ric Johnsen, Senior VP, PLM Outside Plant Solutions in CommScope.