Vertical: Business fiber availability up in U.S. and Europe, but SMBs remain underserved

Fiber availability continues to be one of the main drivers to extend Ethernet and high speed low-latency services to businesses.

Newly released research from Vertical Systems Group revealed that business fiber penetration increased to 27.7 percent in the U.S. and 18.4 percent in Europe at the end of 2010. This is an increase over from the 22.9 percent and 15.1 percent at the end of 2009.

What drove the increase in fiber penetration in both the U.S. and Europe, explains Rosemary Cochran, principal and co-founder of Vertical Systems Group was "the demand for higher speed Ethernet services to support domestic and multinational enterprise networks," in addition to the ongoing Fiber to the Node and Fiber to the Home buildouts by AT&T (NYSE: T), Qwest (NYSE: Q) and Verizon (NYSE: VZ) which brought fiber "to many adjacent commercial sites, which particularly benefited small and medium size business locations."

Vertical Systems Group fiber availability

In addition, the growing desire from financial companies and large enterprises to have low latency connections is driving service providers, such as AboveNet, that focus on providing 100 Mbps and above bandwidth connections to continue expanding their domestic and international fiber footprint.

Cochran said service providers like "AboveNet are looking predominantly at the high performance, point to point ultra high speed" market for financial, content delivery and other applications.

But while fiber availability rose during the past year, 73.3 percent of U.S. commercial buildings still lack access to a direct fiber connection and only 27.7 percent are fiber-ready. 

"Most businesses aren't able to get direct fiber, meaning everything else like SONET, T1, Coax, or T3 has to get used," Cochran said in a previous interview with FierceTelecom. "Service providers will use whatever they have to use depending on the speed, the location and the application."

Interestingly, the lack of fiber to deliver Ethernet has created a growing market for Ethernet over Copper. Competitive operators that are fiber-rich such as PAETEC through its acquisition of Intellfiber and XO Communications (OTC BB: XOHO) are increasing their Ethernet over Copper and Ethernet over bonded T1 offerings.

This means that these service providers can deliver Ethernet offerings to a broader set of customers that were once limited to nothing more than lower speed T1 access or very expensive DS3 circuits and plug up the fiber gap that previously limited the delivery of Ethernet to large businesses.

For more:
- see the release

Related articles:
Closing the SMB fiber availability gap isn't easy
Overture-Hatteras marriage is all about closing the Ethernet fiber gap
Overture, Hatteras Networks merge to create a larger Ethernet aggregation, access vendor

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