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Fiber optics heading for every home - Fraunhofer report

24 Jan 2007

By 2010 every tenth broadband household will be connected with the Internet via optical cable, according to a new report from Fraunhofer ISI in Karlsruhe, Germany. "Internetisation" of telecommunications is also set to continue.

In 2006 Germany's Deutsche Telekom AG lost one million customers in the fixed network sector, a clear indication of the turmoil the telecommunications sector is still experiencing. More and more customers are not only surfing the Internet, but are also turning to the net for telephony. And in the future they will be using it to watch television too.

The pace of this trend towards the so-called "Internetisation" of telecommunications is growing, according to a newly-published study by the Fraunhofer Institute for Systems and Innovation Research in Karlsruhe, Germany.

The study, Long-Term Perspectives in Telecommunications (TK2010), conducted by the Fraunhofer ISI together with the SAP Chair for Entrepreneurship and Innovation at the Technical University of Dresden on behalf of the German Federal Ministry of Economics & Technology, also reaches the conclusion that more and more households will be connected with the Internet via optical cable.

The Fraunhofer ISI expects that by 2010 up to 10% of households with Internet access will have an high-speed optical cable connection providing transmission rates above 100 Mbit/s and which will also be used for telephony and television.

In the meantime, the report states, in metropolitan areas migration to optical technologies has become economically feasible even for smaller network providers, since the associated technology costs have significantly dropped.

There will also be a strong increase in the number of Internet-capable TV cable connections, serving approximately 15% of households. The loser here will be conventional DSL technology, which will see its market share shrink from today's 98% to 75%.

What future for DSL?

DSL (Digital Subscriber Line) is a technology developed in 1998 that enables transmission of (relatively) high-bandwidth information over conventional copper telephone lines. Although theoretically possible to carry up to 8 Mbit/s, DSL typically provides from 1.5 Mbit/s to 512 kbit/s downstream and about 128 kbit/s upstream.

The increasingly common replacement of copper cable connections with fiber optical cable for household and small business connections will mean a shake up for this sector, similar to the upheaval experienced after the telecoms liberalisation of the 1990s.

ISI project director Bernd Beckert comments, "The clear boundaries separating both markets and technologies will become blurred, resulting in new type of collaboration between telecommunications and media corporations, television network providers and Internet service providers."

The complete transition from conventional telephone networks based on copper cable to optical cable reaching all the way to the end-customer will however take until at least 2020, according to the ISI study. By then alternatives such as cable TV networks and mobile technologies such as WLAN and WiMAX will also gain in importance.

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