NTCA: Rural telcos find cost is the main barrier to deploying FTTH

A sunset over a barn structure

Rural telcos may be making progress in extending fiber-based broadband to customers in their service areas, but a new NTCA report revealed that deployment and installation costs remain key impediments.

The NTCA 2016 Broadband/Internet Availability Survey Report (PDF) found that that 89% of survey respondents cited the cost to deploy fiber infrastructure as the top barrier to making FTTH services widely available. NTCA said that 29% of its members participated in the online survey in the spring of 2017.

“Deployment cost remains the most significant barrier to widespread deployment of fiber, followed by regulatory uncertainty, long loops, current regulatory rules, low customer demand, obtaining financing, fiber order fulfillment delays, and obtaining cost-effective equipment,” said Rick Schadelbauer, NTCA manager of economic research and analysis, who authored the report. Throughout the history of the survey, deployment cost has been respondents’ most significant concern.”

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Rural telcos are making progress with their fiber expansion efforts with 52% of respondents deploying fiber to serve 50% of their customers with FTTH, while another 82% of survey respondents indicated they had a long-term fiber deployment strategy.

NTCA

Hybrid fiber and copper strategies that drive fiber to a neighborhood node and use VDSL2 technology to deliver services over short copper loops continue to grow. Thirty-nine percent of those respondents with a fiber deployment strategy plan to offer fiber to the node (FTTN) to more than 75% of their customers by year-end 2019, and 66% plan to offer fiber to the home to at least 50% of their customers over the same time frame. An additional 31% have already completed fiber deployments to all customers.

As rural telcos expand their broadband footprints, survey respondents are making higher speed services available to customers that are requesting service. Sixty-seven percent of respondents’ customers can receive a maximum downstream speed of greater than 25 Mbps and 20% can receive between 10 Mbps and 25 Mbps.

NTCA noted that although take rates trail availability, rural consumers are increasingly subscribing to higher broadband speeds. Schadelbauer said in the study that rural telcos are using various strategies to increase broadband service adoption.  

“Respondents are taking numerous marketing steps to increase broadband take rates, including free customer premise equipment installation, bundling of services, price promotions, free introductory service, free education and training, discounted computers or tablets, and free modems,” Schadelbauer said.

In the 2016 report, 17% of respondents’ customers subscribed to broadband service of over 25 Mbps, up from only 8% a year ago, while 60% percent subscribed to service of 4 Mbps or greater, versus 55% a year ago. The overall broadband take rate remains relatively constant at 72% this year from 73% last year.