BAIS Podcast: Digitizing the ODN and Centralized OTDRs

BAIS podcast Digitizing the ODN and Centralized OTDR - 2.55mb | mp3

Transcript

Jaimie Lenderman: Hello, my name is Jaimie Lenderman, Research Manager at Omdia. And I am joined by my colleague Stephen Wilson, Senior Principal Analyst, covering all things broadband access. Hi, Stephen, how are you doing today?

Stephen Wilson: Yes, I’m very well, thank you. And how are you?

Jaimie Lenderman: I’m doing well. We’re recording this on Thursday, October 12. So it’s getting kind of chilly. But it’s things are going well. Well, thanks everyone for joining us on another edition of our little podcast. Today, we want to take a look at opex in the network and the value of centralized OTDR technology. So Stephen, let’s start with some of the opex challenges with regards to maintaining and repairing the network. So to start off, what are the costs of maintaining fiber networks and repairing faults that occur on them?

Stephen Wilson: Yeah, so thanks. Thanks for the question. So I think that there are certainly costs involved in maintaining fiber networks and repairing faults. And I think most of those costs really are likely to be in the form of reactive maintenance costs. So that’s when something goes wrong. And examples of those costs might include the cost of truck rolls to fix faults on the network. And then, I guess in terms of the, the magnitude, I think, in terms of the number of truck rolls, operators are seeing for repair and maintenance on FTTP networks. I think some operators have reported numbers around sort of 0.6/0.7 truck rolls per 100 premises passed per year. So numbers of that order. And then truck rolls could also easily have an average cost of sort of low hundreds of US dollars. So you can see in that way, the expense can be considerable. Having looked at this and evidence from different operators in developed markets, the sort of repair and maintenance costs on fiber to the premises networks can be around sort of $10 per premises past per year, which is obviously not insignificant. And we think that is an area in which operators are interested in seeing reductions. And I think for vendors as well, they potentially could benefit from offering tools that could reduce these repair and maintenance costs.

Jaimie Lenderman: So when taking a look at these costs on fiber networks, how do they compare to those on copper networks?

Stephen Wilson: Yeah, so I think again, there’s some information here. So I think it’s interesting to see. So information from different operators in different regions, that tends to indicate that fault rates on FTTP networks are almost half those on copper networks, broadly speaking. And then moreover, these fault rates are then translating into truck roll rates that are around twice as high on copper networks as on fiber networks. So that’s, I think, quite a lot of evidence of that from different operators. Where there is mixed evidence, I think, is the extent to which higher truck roll rates translate into higher costs. So NBN Co in Australia, has noted its average FTTP truck roll costs are actually lower than its average hybrid fiber copper VDSL truck roll costs, but Chorus in New Zealand notes that costs per FTTP fault are higher than for copper—so some differences there. But I think overall, it is clear that the opex saving arguments that you hear for rolling out FTTP those are certainly present and not insignificant at all. And in terms of network repair and maintenance, I think such cost savings for FTTP networks versus copper networks for a developed market operator could be around sort of $10 per line per year.

Jaimie Lenderman: So what are some of the ways that operators could reduce these costs, running fiber to the prem networks?

Stephen Wilson: So I think there’s a lot of developments in this area. So operators have traditionally often used portable or handheld OTDR equipment. So optical time domain reflectometer equipment for different parts of the fiber network lifecycle. So you could use that equipment to test a subset of fibers, as you’re rolling out fibers during the build phase; you could also use such equipment to then locate faults in the case of network downtime, but I think there are some challenges here. So portable OTDRs, they require skilled personnel—and obviously with the current landscape, that can be a challenge with shortages of labor—and I think there’s also cost and time constraints. So using portable handheld OTDRs, you might not test all the fibers during the build phase. And that can then lead to significant problems further down the line during the installation phase, when problems have not been detected earlier, and I think there’s a related problem here as well, that often operators have relied on paper records for documenting the inventory of their as-built fiber network, and the challenge there is that that can lead to inaccuracies and it may lead to the need for extra truck rolls. So for instance, to determine if there are spare ports at drop locations in order to connect a subscriber. So I think in terms of what can happen going forward and what is happening already, so operators could look to centralized OTDRs, a new breed of OTDR that could be with or without reflectors, or centralized OTDR solutions that also might use special splitters combined with a board in the OLT and all these different kinds of centralized OTDR solutions that can be placed in the OLT location. So, in that location, and then at the same time operators could also look to digitalize their optical distribution network, record that electronically rather than relying on paper-based records.

Jaimie Lenderman: So what are the benefits of centralized OTDR solutions, as well as solutions to digitalize that ODN?

Stephen Wilson: Yes, I think um, I think there are various benefits here. So, in the first instance, centralized OTDRs that use reflectors, these really promise the ability to test the fiber network as it is being built out. And when reflectors are being used, they can also provide visibility in the network beyond first splitter locations. So as you’re building out, testing all fibers can be done rapidly. And so you can assess the work of contractors that might allow the contractors to be paid more quickly. Using centralized OTDR with reflectors in this way, that can also avoid these problems further down the line when you’re performing installations, as we discussed, the problems avoiding failed installations, because issues were not picked up earlier. And in fact, many operators are reporting sort of at least really double-digit percentages for failed installations. And so testing all fibers before connecting subscribers can really reduce that number considerably. And I think another sort of very related point here is that also digitalizing the ODN can help during the fiber installation phase; it can help ensure that, indeed, spare ports are available at drop locations. And in this way, you are avoiding and eliminating unnecessary preliminary visits, perhaps to see if it will be possible to connect a subscriber. And then there’s also another sort of set of use cases, which is the monitoring of the network. So, when the fiber network is active, centralized OTDRs can also monitor it to help precisely find the location of faults. So centralized OTDRs without reflectors are really using ONTs in place at the subscriber’s home, and these promise end-to-end visibility of the fiber to the premises network. And if operators use centralized OTDRs with reflectors to monitor the network they could leave reflectors in a subscriber’s premise to monitor the end-to-end network but the challenge perhaps is that those reflectors introduce some costs. Another alternative might be you leave reflectors in place at final drop locations to give you visibility there—so there are different ways of delivering value that centralized OTDR solutions can bring throughout different parts of the fiber lifecycle. So lots of benefits there.

Jaimie Lenderman: Thanks for going into detail on that. So with the business case, regarding this does, the business case for centralized OTDR solutions stack up?

Stephen Wilson: Yeah, so I think this is a really good question. So this is still something that perhaps isn’t the mainstream among operators. But our sense is that using centralized OTDRs to test the network as it is being built, that can certainly make sense from a business case perspective. And I think a lot of that is through avoiding failed installations. So a little example that if we assume an FTTP installation costs $300, if we assume maybe conservatively that the failed installation rate is 10% and that, in the end, the operator will achieve a 50% subscriber take-up rate of premises passed, then you can see, put those numbers together, you can see the centralized OTDR solution just costs, several, let’s say US dollars per premises passed, you can see that there’s a potential there for an attractive business case to deploy centralized OTDRs. And I think that in some ways, it’s surprising that such solutions are not more widely deployed. But I think the challenge is, is that it can be hard for operators to change their rollout processes once they’ve started deploying fiber. But at the very least, I think our sense is that centralized OTDRs are something that’s at least worth considering. And then I think the other part to this here is using centralized OTDRs for the fiber monitoring phase. So potentially that could also work. I think here the challenge is with the business case, is that actually what you’re doing isn’t so much avoiding truck rolls—the centralized OTDR isn’t avoiding the faults in the network—but what it’s allowing you to do is more precisely locate those faults, and therefore reduce your mean time to repair. Now, I think importantly, here end-to-end visibility of the whole fiber to the premises network would help. I think what we see is that a significant proportion of faults are likely to occur in the final drop section of the network. So I think it’s important that there is end-to-end visibility. And I think overall, it might be possible to save somewhere around $1 per premises passed per year if there is full visibility of that end-to-end network. And so it’s certainly not implausible that if your centralized OTDR solution costs several US dollars per premises passed that it could potentially be attractive. And I think one thing that comes up quite a lot, and one big uncertainty here, is how those fiber fault rates will evolve over time. Now, if those fiber fault rates start getting worse and there are more faults, then these kinds of centralized OTDR solutions have more room for cost savings, and will become more attractive. So I think there’s a bit of a lack of data here. And it’s certainly something we’ll be keeping an eye on to see how the fault rates evolve. Now, it’s also worth saying here, we’re always interested in hearing from operators on personal experience with regard to fiber opex. And we’ve also recently published a report covering this topic and that report is titled Analyzing FTTP Opex and the Value of Centralized OTDRs. And that report features in Omdia’s Broadband Access Intelligence Service.

Jaimie Lenderman: And that report is available at omdia.com. Thanks so much, Stephen, for your great insights. And thank you to everyone listening in today. Please feel free to reach out to us on LinkedIn or through omdia.com. Stephen, look forward to doing another one of these with you soon.

Stephen Wilson: Yes, thank you very much, Jaimie.

Appendix

Further reading

Analyzing FTTP Opex and the Value of Centralized OTDRs (October 2023)

Author

Jaimie Lenderman, Principal Analyst, Service Provider

Stephen Wilson, Senior Principal Analyst, Service Provider

[email protected]