FTTH Network Sharing in Africa PON Architectures

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1 FTTH Network Sharing in Africa PON Architectures The old saying goes sharing is caring, but when it comes to Fibre-to-the-Home (FTTH), the saying should be sharing is saving. Network sharing is driven by several motivations, the most prominent being the reduction in Total Cost of Ownership (TCO) of the network, followed by increasing revenues by opening up the network to lease agreements with other operators. This article examines the various network sharing architectures being implemented by operators. An understanding of these network sharing architectures and their operational dynamics will provide insight to how economically viable FTTH deployment can be achieved / 08 Author: Douglas Sele & Robert Mataruse, Detecon International We make ICT strategies work

2 1. Introduction Operators look toward fibre technology as a means to provide high-speed broadband access in today s world of high data consumption and increasing internet usage. As internet usage evolves, FTTH presents itself as a solution to meet the speed and capacity demands. Fibre delivers a multitude of digital information more efficiently than traditional copper coaxial cables. This is an attractive premise for African operators seeking to meet increasing consumer demands for data, retain subscribers and attract new ones as well. With 52 African countries connected to submarine cables either directly or indirectly via terrestrial crossborder Fibre Optic (FO) networks, 44% of the African population now live within a 25km reach of a fibre node. This forms the basis of FTTH operations on the continent; with over 580,000km s of operational terrestrial fibre, at least 100,000km s is located within city metro rings and FTTH networks and these numbers are constantly growing with every new governmental or operator investment in fibre 1. Fibre Reach in Africa April 2016 Remarks By June 2014, 44% of the population of Sub- Saharan Africa (410 million) lived within a 25- km range of an operational fibre optic network node The continent had a total of 586,707km of operational fibre optic network by Q4 2014, comprising of long-haul, metropolitan and FTTH/B (fibre-to-the home/building) terrestrial fibre optic networks Of this inventory of 586,707 km of operational terrestrial fibre, at least 109,830-km was within cities: metropolitan fibre rings and FTTH/B networks. The FTTH/B networks provide the last mile access, delivering the bandwidth right to the door. Source: Hamilton Research, With the market attractively ripe and available for FTTH services, what drives operators to engage in network sharing activities in Africa? 2. What are the FTTH Roll-out Challenges? Fibre for the foreseeable future is going to be the preferred choice for residential fixed access service offerings. Fibre is able to provide much higher transmission capacity than traditional cable or copper, however, in the rollout FTTH networks, operators in Africa are faced with several challenges that threaten the economic viability of these networks. These challenges include (but are not limited to); High cost of the passive infrastructure civil works constitute an estimated 60-70% of the initial investment (Capex Limitation) 2 Regulations lack of properly defined regulations for the deployment of fibre in multiple African regions hinders the growth of FTTH deployments 1 FTTH Council Africa Annual Report Network sharing with FTTH/PON architectures - Huawei Communicate Jan 2013

3 Subscriber uptake in most African markets where users have limited budget for fixed broadband subscription, operators are faced with the challenge of rolling out in noneconomically viable regions Return on Investment Fibre deployments usually require high up-take by customers in order to reach the brake-even investment mark within an acceptable number of years (Long ROI periods) To mitigate these risks and associated challenges, operators can get into infrastructure sharing agreements. These infrastructure sharing agreements are almost similar to the local loop unbundling by Telcos for the provision of DSL services. 3. What are the Drivers for FTTH Network Sharing? Several drivers contribute to the adoption of FTTH network sharing activates Cost Savings Reduction of overall network roll-out and operational costs Regulations Active regulatory policies encouraging and rewarding sharing initiatives Competition Increase competitive pricing favours new entrants and aggressive operators Reduced Civil Work Relatively high trenching cost avoided when engaging in sharing scheme A thorough understanding of the technical and financial implications of FTTH network sharing, both in terms of the architectu re and number of operators involved, is needed before any partnerships between parties are made. There are numerous motivations for FTTH network sharing but none more prominent than to reduce the TCO of a network. This includes significant capital expenditures and recurring operational costs. Network sharing can lead to operators spending almost half of what they would have spent had they gone it alone. Saving money on the rollout of the FTTH network makes sense economically for involved Telcos as rapid customer uptake is not guaranteed. 4. What to Share? Operators can reduce the cost of passive infrastructure through access network sharing which, as a result, reduces the cost per operator for a home connected. This approach has been used successfully in the wireless arena for 3G and 4G networks and operators aim to replicate this success in the Fixedbased arena. For FTTH access network sharing, operators employ a Passive Optical Network (PON) architecture, where access equipment is shared rationally by the involved operators. The passive infrastructure in the PON architecture can be shared by different operators through multiplefibre schemes. The main components for the passive infrastructure include; in house cabling, splitters, distribution segments, street cabinets, feeder segments and optical distribution frame. Active infrastructure elements include; optical network terminal (ONT CPE) and optical line terminal ( central office equipment).

4 PON Architecture with Cascaded Splitters PON Architecture with Splitters Customer 1 Multifibre Cable Customer 2 Operators Central Office (CO) Feeder Optical Splitter 1 Distribution To more customers Optical Splitter 2 PON architectures are characterized by its use of passive optical splitters featuring an Optical Line Terminal () and an Optical Network Unit (ONU). The OTL located in the operators Central Office (CO) connects to a Fibre Distribution Hub (FDH) that houses the optical splitter which connects to the homes. A drop cable then goes to an Optical Network Terminal (ONT) located at the home. Passive network infrastructure can be costly, due to difficulties in the field such as digging and trenching, however, costs are reduced in PON architecture by enabling a multi-fibre feeder fibre from the operators CO to serve multiple homes. Unfortunately, this method serves about 32 homes unless the architecture is altered to include a cascade of optical splitters. This PON architecture with a cascade of splitters is used to connect larger community of homes. Typical FTTH Architecture OTL Optical Line Termination FDH Fibre Distribution Hub ONT Optical Network Terminal Passive Optical Network (PON) Architecture Customer 1 Multifibre Cable FDH ONT Customer 2 Operators Central Office (CO) Feeder Optical Splitter ONT ONT Customer N A cascade of optical splitters may be utilized in the case of a very high density of subscribers, saving the operator on the amount of cabling required to connect homes. The cascade of splitters with different ratios provides great network design flexibility and reduces fiber counts in the cables. However, there will be some loss per added optical splitter in the network. For example, an operator may have a 4:1 splitter near the central office and another 4:1 (or 8:1) splitter near the subscribers. This inevitability will connect more houses with very little investment in the cabling required to support these homes.

5 5. Types of Sharing Architectures GPON or XG-PON (Gigabit Capable PON) TWDM-PON (Wavelength Dist. Multiplex POPN) Operator 1 Central Office Operator 1 Central Office ONT 1 ONT 1 Street Cabinet ONT 2 WDM Street Cabinet ONT 2 Operator 2 Feeder Segment Splitter 1:8 Distribution Segment Splitter 1:4 In this architecture, operators share the passive infrastructure voluntarily. Each operators is in charge of its own active network elements. A multifiber scheme is employed to share the passive infrastructure. Operator 2 Splitter 1:8 Splitter 1:4 In this architecture, operators also share the passive infrastructure voluntarily. Each operators is also in charge of its own active network elements. A single fibre is shared by different network operators Each operator will transmit within its own wavelength. Shared Infrastructure Gigabit-Capable PON (GPON) GPON architectures have been in commercial use for some time now. GPON architecture uses optical wavelength division multiplexing (WDM) so a single fiber can be used for both downstream and upstream data. While each ONU gets the full downstream rate, GPON uses a time division multiple access (TDMA) format to allocate a specific timeslot to each user. This divides the bandwidth so each user gets a fraction (such as 100 Mbits/s) depending upon how the service provider allocates it. The upstream rate is less than the maximum because it is shared with other ONUs in a TDMA scheme. The determines the distance and time delay of each subscriber. XG-PON The latest version of GPON is a 10-Gigabit version called XG-PON, or 10G-PON. As the demand for video and over the top (OTT) TV services has increased, there is an increasing need to boost line rates to handle the massive data of high-definition video. XG-PON serves this purpose. Different wavelengths tae used on the downstream and upstream, allowing XG-PON services co-exist on the same fibre as standard GPON. XG-PON is not yet widely implemented but provides an excellent upgrade path for service providers and customers. TWDN-PON (Wavelength Distribution Multiplex PON) The TWDM-PON network architecture combines the cost advantages of GPON, which can support multiple subscribers on a single wavelength, with the wavelength flexibility of WDM PON, which allows wavelengths to be dedicated to particular subscribers or applications. A significant advantage of TWDM- PON is its ability to support different types of subscribers or applications by using different wavelengths and different bit rates on those wavelengths. An operator can assign a single wavelength to a particular customer (such as an enterprise), or to a particular application (such as mobile backhaul). The ability to simultaneously support more subscribers, more applications while encouraging network sharing leads to faster network monetization, which is important given the costs and challenges associated with building an FTTH networks. Others Other PON architectures which are less prevalent include; the Broadband Passive Optical Network (BPON) which is not widely used as the more advanced GPON; the Ethernet Passive Optical Network

6 (EPON) which uses WDM with the same optical frequencies as GPON and is fully compatible with other Ethernet standards; and the Gigabite Ethernet Passive Optical Network (G-EPON) which shares similar characteristics with the EPON system. Comparison of PON Architectures GPON XG-PON TDWM-PON Commercialization Uplink (Gbps) ( ) 10 (4 x 2.5) Downlink (Gbps) ( ) 40 (4 x 10) Distance/Reach (km) 20 (60 km logical reach) (up to 512) Splitting Factor 128 (64 or lower) 128 or more Limitations All signals work with the same wavelength pairs. It is not possible to share an individual fibre link hence multiple deployments are prerequisite for network sharing to be achieved Same as GPON Advantages Backward compatibility with GPON passive infrastructure elements such as cables and splitter s Operators can work with different wavelengths on the same fibre link, allowing the sharing of individual fibres. WDM can be used to combine signals from different operators, at a capacity of 4/8 XG-PON ports. Backwards compatibility with GPON/XGPON passive infrastructure is also possible

7 Conclusion The multiple PON architectures available provide strong motivation for network sharing among African operators. FTTH network sharing schemes provide the solution to common challenges associated with FTTH deployments such as the high cost of the passive infrastructure, particularly of the civil works which correspond to the whole majority of the investments. Regulators and policy makers need to create appropriate regulations and unified standards to address operators concerns, especially those related to economic implementations and market offers. Only by embracing sharing schemes will FTTH expand cross all regions in Africa, the sooner FTTH network sharing becomes more widespread across Africa, the better it will be for operators, consumers and African countries.

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