In deploying fiber optics, fiber-to-the-home (FTTH) is widely recognized as the best solution for broadband connectivity. While 2023 was a record year for fiber expansion, 2024 is a turning point for the industry.
The 2023 North America Fiber Provider Survey from Fiber Broadband Association (FBA) and RVA revealed that fiber has been deployed to 78 million homes by the end of 2023, growing 13% year-over-year (YoY).
Notably, fiber broadband hit all new records, with 9 million newly-passed US homes added by network operators in 2023. Among this is UTOPIA Fiber’s successfully completed FTTH build in the city of Santa Clara, Utah.
Moreover, FTTH connections, which became the lead internet platform for Latin America in 2022, also grew 21.2% YoY to reach 62.9 million, or 56.3% of the regional fixed residential broadband market in the same period.
Fiber to the Home
FTTH delivers a high-speed fiber-optic connection directly to the user's home. Unlike other fiber deployment methods, such as fiber-to-the-node (FTTN) or fiber-to-the-curb (FTTC) which involve part of the copper route, FTTH offers an all-fiber connection.
The main difference between the other types of broadband connections and FTTH is the location of the fiber-optic cables and the type of cables used to transmit data.
While FTTN and FTTC use a mix of fiber-optic and traditional cables, potentially leading to slower speeds and less consistent connections, FTTH offers direct, high-speed internet connections with fiber-optic cables running directly to homes. As a result, it provides faster and more reliable service.
The technological shift to FTTH is not just about enhanced internet speeds; it represents a fundamental change in how communities access and use digital resources. FTTH’s widespread implementation is fostering new opportunities in education, healthcare, and business, leading to better quality of life and enhanced local economies.
Analysts’ Express Positive Growth Outlook
The 2023 North American Fiber Provider Survey shows a 45.4% average take rate for US fiber providers, with some seeing significant first-year improvements, while Canadian fiber passings also grew by 12% in 2023, with a 44.6% uptake rate.
The Fiber Broadband Association predicts continued acceleration in FTTH growth, projecting 12 million new homes with fiber in 2024, driven by telecom expansions, network upgrades, and federal grant opportunities.
As examples, during the first half of 2024, Bluepeak allotted USD 100 million to expand its FTTH network to over ten new markets in Oklahoma and Texas. Glo Fiber, powered by Shentel, also plans to deploy next-generation, fiber-optic broadband services to over 40,000 additional homes and businesses in Ohio.
Fiber broadband has now officially crossed the halfway mark in the effort to bring fiber to every US home. RVA estimates that more than 100 million homes are still potential markets for FTTH, including areas that may require second and third installations. With this in mind, the current pace of deployment is likely to continue, if not increase, for at least another decade.
RVA also expects USD 150 billion to be spent on residential fiber (FTTH) in the United States over the next five years, more than all the capital spent to date on fiber.
Between 2026-2028, funding availability from network operator capex reinvestment, private equity investment, and government subsidy are all expected to reach unprecedented levels.
Additionally, analysts at Wolfe Research predict the US fiber subscriber count will double over the next decade, with the FTTH penetration to increase from 45% to 65-80% within this timeline.
TD Cowen estimates that AT&T will take the bulk of the share in the total US FTTH passings this year, followed by Verizon and Frontier, and that the total number of passings will reach an estimated 91.4 million in 2027.
This is aligned with Ookla’s Speedtest Connectivity Report during H1 2024 wherein AT&T Fiber demonstrated strong performance and hailed as the fastest and most consistent fixed internet service provider.
Agreeing to the same context, UBS believes that the US is in the midst of a 5-year FTTH land grab that will see record levels of deployment in 2025 and 2026 given renewed wireless carrier sponsorships and unprecedented federal funding.
In Latin America, the market has been driven by the expansion of FTTH services in recent years, led by major global players like América Móvil, Liberty Latin America, Telefónica, and Millicom, along with several fast-growing smaller companies, particularly in Brazil.
S&P Global Market Intelligence Kagan predicts that by 2030, over 60% of households in Latin America and the Caribbean, totaling 146.1 million, will have fixed broadband internet subscriptions.
Fiber Innovations
Fiber technology is rapidly advancing, offering faster speeds, lower latency, better security, and more flexible applications. Recent milestones include an 800-Gbps data rate transmitted over 4,887 miles using a single wavelength of light.
Remarkably, a key development in FTTH is the adoption of 10 Gigabit Passive Optical Network (XGS-PON) as the industry standard in 2023, providing speeds up to 10 Gbps. Some providers are already exploring 50G PON, with the potential for 100G PON in the future.
With government, public, and private funding fueling the rapid FTTH expansion in the US, there is a keen interest in having the most cost-efficient and future-proof equipment. These needs are mainly motivated by consumer demand for higher speeds, the transition from analog or cable to fiber, and upgrading and migrating to the next level of technology.
The growth of smart homes is closely linked to advancements in fiber technology. Smart devices like speakers, cameras, thermostats, and appliances have transformed home automation, allowing users to control their environment with voice commands, mobile apps, or cloud-based services. However, this convenience increases demands on capacity, network traffic, and security.
FTTH technology meets these demands by providing the necessary bandwidth to support the rising number of smart devices, ensuring a smooth and efficient connected home experience.
What is more, as edge computing becomes more integral to FTTH, the network infrastructure must evolve, requiring more nodes, greater diversity, and enhanced visibility. This means that testing and monitoring FTTH must continually adapt to the dynamic and varied landscape of edge computing, including elements like fog nodes, mini data centers, and other edge devices.
The Importance of FTTH in Today's World
The real growth of FTTH networks is driven by their economic affordability, user acceptance, and the social benefits they offer. With this in mind, FTTH’s value-added services enhance quality of life by providing reliable, high-speed internet, transitioning from DSL variants to optical routers.
Because optical signals are faster and immune to noise, crosstalk, or interference, FTTH delivers uninterrupted internet over greater distances. On top of that, the decreasing costs of optical fiber and FTTH equipment have further accelerated the widespread adoption of FTTH technology.
Now more than ever, the trend of remote and hybrid workforce brings the need for FTTH at home, and in any indoor place. FTTH also ensures a smooth and efficient learning experience as online education becomes the norm for both students and adults looking to upskill. In terms of entertainment, people who are either streaming movies in 4K or playing multiplayer games online can seamlessly benefit from this technology.
Is FTTH Sustainable?
FTTH connections are considered more environmentally friendly than other broadband options due to their energy efficiency, longer lifespan, and reduced emissions.
Fiber-optic cables use light signals, which require less energy than traditional copper or coaxial cables, leading to lower energy consumption by connected devices. These cables also support higher data transmission speeds, potentially reducing emissions from internet usage.
Not only that, the durable materials used in fiber-optic cables also result in a longer lifecycle, minimizing waste and CO2 emissions. According to the Fiber Broadband Association, FTTH PON networks reduce carbon footprints by 60% compared to HFC networks. However, the overall environmental impact of FTTH varies depending on the infrastructure and energy sources used.
The Wireless Option
Fixed wireless access (FWA) is a notable alternative to fiber, gaining popularity and poised to significantly impact the broadband market, especially if the government allocates more spectrum to the mobile industry.
While the upfront costs of fiber deployment remain high with longer TCO/ROI considerations, service providers are finding ways to lower operating costs by smartly reusing existing infrastructure.
FTTH and 5G are complementary technologies, often sharing network infrastructure since both depend on widespread fiber availability and numerous connection points.
Effective 5G connectivity relies on seamless fiber backhaul and fronthaul, and by integrating the infrastructure and rollout of both technologies, providers can boost efficiency and reduce costs over the coming years.
