ftth, concerning the RBOC FTTP RFP, in a similar vein, I responded to a poster's question on the Gilder board earlier today. Slightly edited:
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[Greetings]
You asked a question that is a very popular one these days: Who'll benefit the most from the RBOCs FTTP RFP award?
Don’t mind my mind-blasting:
Investors are licking their chops over this one, sometimes imagining that gold exists where it doesn’t. There is some wild speculation going on, in other words.
One must first assume that what has been promoted by these behemoths as a roadmap to fiber to the premises is not merely a ruse or a form of stalking horse by the RBOCs in order to cull favor from the FCC and others in the finalization of policies that would preclude the competition from entering the last mile in any meaningful way.
If you are asking who the pure-play vendors will be, I’d have to claim ignorance. Many of the front-runner vendors in FTTH have been focusing on Ethernet PONs, or EPONs, and other topologies that are not in line with what the RBOCs are specking into their RFP. Namely, the theology of the RBOC is the ATM-based PON, a.k.a. APON. Likewise, many of the smaller vendors who’ve been able to make some headway into smaller FTTH deployments do not meet many of the RBOCs network management and other architectural standards as spelled out by Telcordia (formerly Bellcore), some of those purely based on the extremely high costs associated with attaining those certifications.
Among the largest manufacturers of APON gear who fit these criteria you have Alcatel (who some consider a favorite here, since they’ve already won a similar consortium RFP for DSL gear several years ago, and they are still going strong in that department), Lucent, Nortel, (Marconi for a while, but not sure if they’ll be returning to this space), and a few domestic others, and possibly Siemens, NEC and several others that are foreign. None of these can hardly be considered pure plays, and considering the ten-year time lapse to completion that is being tossed around, an award to any one of these would simply be viewed as business as usual.
Which of the above major players is dependent on a smaller optical component provider through a pre-existing relationship? Alcatel recently cut a deal with someone, I believe;)
Who’ll be the fiber provider? Corning, of course, stands out, but I would not put the house in jeopardy here, just yet. A specialized maker of drop cables (the last couple hundred feet) may surface, such as OCCF or some other obscure outfit, and walk away with some of the prize.
I wouldn’t go so far as to assume that the RBOCs intentions are as stated, just yet. But say that they are, in fact, genuine and that their intent is to do as they’ve stated in their releases. Then we’d have to consider a host of other variables before figuring out who wins what.
On the surface it would appear that the RBOCs, themselves, inclusive of their shareholders and end users (at some future point in time), would come out on top, from a service and revenue standpoint. However, we’re talking about a ten year time lapse, using their own figures, before their stated goals are achieved. That’s a lot of spending on their part before a return can be seen, and, despite how dramatic a move such a venture seems right now, a ten year span would cause a lot of dilution on its true, ultimate impact.
In the end, it might just be another glacial form of annual plant construction spending, sans any level of urgency or apparent change to the landscape, except for the cherry-pick areas where they might be able to achieve maximum initial penetrations. Here I’m referring to residential high rise buildings (MDUs), new subdivisions, and other exclusive neighborhoods that already have been primed for deep fiber penetrations.
One also has to consider that the cable operators and other new (wireless, in particular) entrants are not going to sit idly by watching the RBOCs take their customers away. In fact, the time that it will take for the RBOCs to even put a dent into residential and so-ho broadband with FTTP will allow the cable operators to snatch the RBOCs’ own customers away, offering them local and long distance voice services, long before those fiber deployments are even begun. And they will be doing this using IP technologies over their own backbones, long before the average RBOC customer is ever extricated from copper.
FAC |
