VSG: Fiber penetration gap in U.S. businesses narrowed to under 60%

Fiber penetration into U.S. buildings has come a long way over the past 10 years, rising from as low as 10.9 percent in 2004 to over 42 percent in 2014, according to Vertical Systems Group's latest figures.

Fiber penetration for 2014 is up from 39.3 percent of U.S. buildings in 2013.

"In 2004, there were 90 percent of buildings that did not have fiber," said Rosemary Cochran, principal at Vertical Systems Group, in an interview with FierceTelecom. "Now the fiber gap is under 60 percent for the first time."

Cochran added that there's "still a lot of buildings without fiber, but in terms of movement, it's there."

The research firm said that fiber-based business services in the U.S. "nearly quadrupled between 2004 and 2014" as service providers like AT&T (NYSE: T), cable operators, and a host of competitive carriers equipped thousands of business sites with 20 or more employees with fiber over the course of this period.

Having available fiber is fast becoming a key element to enable the delivery of carrier Ethernet to businesses and also increasing access to high speed IP/MPLS VPN services, cloud and Internet connectivity, and for wireless backhaul applications.

One of the competitive differentiators that Ethernet providers said in Vertical Systems Group's worldwide survey of Carrier Ethernet service providers will set them apart from their rivals is how much fiber they have deployed in their network and the reach of their fiber facilities into buildings.  

"When we did our end-of-year survey with service providers and asked what the competitive advantages were in delivering Ethernet, fiber footprint was number one," Cochran said. "Some talked about their ability to do Ethernet over copper, but the reality is that it was a competitive advantage where they had fiber."

Looking toward 2015, respondents said that expanding the reach of their fiber network was a primary growth challenge.

"When asked about what's the growth inhibitor and challenges for growth, their answer was expanding their networks and the fiber footprint and trying to get it to more places as possible," Cochran said.

While direct fiber is a key element of the service providers' Ethernet delivery arsenal, a growing number of service providers are also deploying GPON technology in a fiber-to-the-premises (FTTP) network architecture to expand Ethernet availability.

Case in point is CenturyLink (NYSE: CTL). The service provider has been rolling out 1 Gbps GPON services targeting multi-dwelling units (MDUs) in various markets.

After conducting deployment of the 1 Gbps GPON service to residential customers in certain parts of Omaha and Las Vegas and select business customers in Salt Lake City, CenturyLink said it would provide the 1 Gbps service to residential and business customers in 10 cities and business customers in another six cities.

Having this service on hand means that CenturyLink can quickly address the need for higher speed business services to battle CLECs and also cable operators that have mainly focused on serving small to medium businesses (SMBs) with asymmetrical DOCSIS-based solutions.

In addition to CenturyLink, Cox Business has been delivering GPON-based services to SMBs in the markets it serves.

"There's a lot of momentum on GPON," Cochran said. "A lot of carriers are looking at that as a lower bandwidth, lower cost alternative for businesses that weren't being served before."

For more:
- see the release

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