As the year 2012 comes to a close, FierceTelecom is once again taking a look back at the major trends that took place this year in the wireline segment of the telecom industry.
For today's issue of FierceTelecom, we are serving up our fourth annual Year in Review issue.
While there are certainly other trends that could be worth mentioning in 2012, I think there were five key ones that had the most effect on the wireline industry:
VDSL2 and vectoring: At a time when both traditional telcos like Verizon (NYSE: VZ) and Bell Aliant (Toronto: BA-UN.TO) are delivering over 100 Mbps and Google Fiber (Nasdaq: GOOG) is delivering 1 Gbps speeds to homes over fiber, it's a bit ironic to talk about copper. However, the reality is that it's not economically feasible to bring fiber to every premise. With the advent of VDSL2 and emerging techniques including vectoring and phantom mode, copper is coming back into the spotlight. While large U.S. telcos such as AT&T (NYSE: T) and CenturyLink (NYSE: CTL) have expressed interest in using VDSL2 in combination with vectoring, the majority of the trials and deployments are taking place in Europe. VDSL2 combined with vectoring can help mitigate cross talk and noise issues that occur on the copper pairs, thus increasing speeds to 50 and over 100 Mbps, depending on how far away the customer resides from the nearest remote terminal (RT) cabinet. During the year, service providers including Belgacom, Deutsche Telekom, OTE, TDC Denmark and Telekom Austria A1 all began deployments or are now conducting trials of VDSL2 and vectoring.
AT&T's multibillion-dollar network bet: After months of speculation, AT&T finally revealed it would not sell its rural assets, but instead would spend $14 billion to make various changes to upgrade its wireline network to an IP-based infrastructure and migrate some of its harder-to-reach copper customers to 4G LTE wireless services.
Special Access Reform: Special access has become a divisive issue in the wireline segment of the telecom industry. On one side, there's the traditional telcos like AT&T and Verizon that argue the regulations that once governed the copper-centric PSTN world should not apply in the emerging IP and fiber-based world. However, CLECs and industry groups including COMPTEL argue that any changes in regulation "should be to preserve and promote competition by ensuring that competitive carriers continue to have access to last mile facilities and interconnection." To assist in this transition, the FCC recently created its Technology Transitions Policy Task Force. A number of industry pundits argue that AT&T's $14 billion landline and wireless investments and Verizon's recent move to accelerate their copper-to-fiber transition are ways they are trying to create leverage in changing last mile access regulations.
Verizon's copper-to-fiber transition: Verizon made it clear recently that after Hurricane Sandy left much of its aging copper network facilities in New York City damaged beyond repair, they would upgrade those facilities with fiber. While this natural disaster was unprecedented, it has prompted the service provider to accelerate this transition. Earlier this year, Verizon's CFO Fran Shammo said the company will migrate over what he calls "chronic" copper customers, or those with more than four truck rolls per year, to fiber-based FiOS.
Software Defined Networking (SDN): SDN, one of the latest and greatest acronyms in the industry, is a form of network virtualization in which the control plane is separated from the data plane and implemented in a software application. The technology has been finding utility in applications including cloud-based Infrastructure as a Service (IaaS) as part of a consolidated data center. And just as the SDN market gains momentum, a number of the largest telecom suppliers, particularly Alcatel-Lucent (NYSE: ALU), Cisco (Nasdaq: CSCO) and Juniper Networks (NYSE: JNPR), have all been upping their SDN product lines internally by either acquiring or creating new so-called "spin-in" divisions or paying top dollar to get into the SDN space if need be. Juniper, for example, recently acquired Contrail Systems for $176 million. Meanwhile, Alcatel-Lucent and Cisco have created their "spin-in" SDN units Nuage and Insieme.
Finally, please take a look at our previous Year in Review features from 2011, 2010 and 2009. --Sean
P.S. FierceTelecom will be on a publishing break for the holidays. We will be updating the website with any breaking news, but our newsletter be back in your inbox on Tuesday, Jan. 2, 2013. Enjoy the holidays and have a Happy New Year!