Fiber optic networks are rapidly expanding in emerging markets, driven by various factors that create demand for high-speed, reliable, and affordable connectivity. In this article, we will explore some of the key factors that are influencing the growth of fiber optic networks in these regions, and how they are transforming the telecommunications landscape.
One of the main drivers of fiber optic network growth in emerging markets is the increasing demand for broadband services, especially from residential and business customers. Broadband enables access to various online applications and services, such as e-commerce, e-learning, e-health, e-government, and entertainment, that enhance productivity, convenience, and quality of life. According to the International Telecommunication Union (ITU), the global average fixed broadband penetration rate was 15.4% in 2019, but only 8.4% in developing countries and 0.6% in least developed countries. This indicates a huge potential for fiber optic network expansion to bridge the digital divide and meet the growing broadband needs of these markets.
The Internet of Things (IoT) is revolutionizing industries and our day-to-day lives by creating interconnected ecosystems. From smart cities and healthcare innovations to connected homes, IoT is driving transformative changes worldwide. This exponential growth in connected devices inturn calls for a significant expansion of fiber optic networks to handle the scale, performance and stability.
In emerging markets, the fiber optic crescendo thrives on the insatiable demand for broadband. It's more than connectivity; it's a digital revolution, knitting communities, businesses, and aspirations into a high-speed symphony, propelling these markets into the future.
The primary catalyst driving the expansion of fiber optic networks in emerging markets is the escalating demand for broadband services, particularly from both residential and business clientele. Broadband services play a pivotal role in providing access to a diverse array of online applications and services. These services collectively contribute to heightened productivity, increased convenience, and an overall improvement in the quality of life for users.
Capital Investment is a key factor, which in turn is facilitated by: Country political stability, monetary policies, GDP growth, capabilities of local telco players, geographical challenges
Broadband should be approached like infrastructure for electricity or water. The COVID-19 pandemic has shown us that the case for reliable, ubiquitous broadband is not just economic, but now existential and essential. Demand for broadband can be better understood when defined in terms of current, latent, and potential demand. Understanding this demand and how individual industries use cases can be influenced is foundational to building an economic case for investing in broadband and digital infrastructure and fiber optic .
Another factor that drives fiber optic network growth in emerging markets is the surge in mobile data traffic, which requires more backhaul and fronthaul capacity and performance. Backhaul refers to the connection between the core network and the base stations, while fronthaul refers to the connection between the base stations and the remote radio heads. Fiber optic networks offer superior bandwidth, latency, and scalability compared to other technologies, such as copper or microwave, for supporting the increasing mobile data traffic. Moreover, fiber optic networks are essential for enabling the deployment of 5G, the next generation of mobile communication, which promises faster speeds, lower latency, and higher density of devices. According to Cisco, the global mobile data traffic will grow by 31% annually from 2019 to 2024, and 5G will account for 10.6% of it by 2024.
Majority of cellular towers in many emerging markets still use microwave backhaul which has capacity limitations. 3/4G customers connected with cellular towers generate high volumes of data traffic which requires fiber optic backhaul. Tower fiberisation or fiber to the tower (FTTT) is hence becoming a major driver for growth of fiber optic networks in emerging markets.
Another factor other mobile tower backhaul uplink requirement , corporate and consumers apps also required very high bandwidth which copper or wireless access network cannot meet this without fabrization . Fibre being futuristic network will cope with latency and scalability issues
With immense growth of FTTH Network where fibers connectivity is reachable to every street. With XGS-PON Back hauling along with Type-C dual homing can help to cope with BW chocking as well as have a resilient Network Structure for Mobile Towers.
According to the Cisco Visual Networking Index (VNI), global mobile data traffic was projected to grow significantly. In the forecast, it was anticipated that by 2023, global mobile data traffic could reach 77.5 exabytes per month. The demand for higher data speeds and lower latency, especially with the advent of 5G, increases the need for robust backhaul networks. Fiber optics, with their high capacity and reliability, become essential for efficiently handling this surge in traffic. The deployment of 5G networks further intensifies the demand for fiber optic infrastructure. 5G requires more cell sites and increased connectivity between these sites, relying on robust fiber networks for efficient data transfer.
Main usage in mobile data traffic is still video as it was on 3G to 4G transformation. With the 4K video and AR/VR games today, mobile backhauling requires higher capacity per cell site. It demands less latency. The nature of the user traffic also changes these days. It is getting closer to symmetrical with the increase of content creators. So fiber can do better carring mobile data as mid and bachaul networks with symmettical data patterns when compared with microwave or copper.
A third factor that drives fiber optic network growth in emerging markets is the reduction in the cost of fiber optic equipment and installation. Fiber optic cables, components, and devices have become more affordable and accessible due to technological innovations, economies of scale, and market competition. For example, the average price of a single-mode fiber optic cable dropped from $1.2 per meter in 2012 to $0.4 per meter in 2019, according to CRU Group. Furthermore, the installation cost of fiber optic networks has also decreased due to improved techniques, such as micro-trenching, aerial deployment, and pre-connectorized solutions, that reduce the labor and material requirements. These cost reductions make fiber optic networks more attractive and feasible for emerging markets, where the financial resources and infrastructure are often limited.
The developments in DWDM space is also contributing towards reducing the cost of operations of Fibre Optics network. The cost per Gb is coming down with time, making it more affordable.
The main driver for cost reduction is rather the mutualisation of existing infrastructure (poles, ducts). Now, cost of active equipment can also be a burden, depending on the country. In which case, tax (especially import ones) are probably a more important matter than volumes.
The growing need for bandwidth?is the main factor driving the growth of the passive optical networks market. Consumers, businesses and the exponential demand in IoT demand faster and more reliable networks and this is only possible with fiber optics. Another growing demand is video streaming and other bandwidth intensive applications.
A fourth factor that drives fiber optic network growth in emerging markets is the policy support from governments and regulators, who recognize the benefits of fiber optic networks for economic and social development. Many governments and regulators have implemented policies and initiatives to promote and facilitate the deployment of fiber optic networks, such as setting broadband targets and strategies, allocating funds and subsidies, granting licenses and permits, providing incentives and tax breaks, and encouraging public-private partnerships. For instance, the African Union launched the African Continental Free Trade Area (AfCFTA) in 2018, which aims to create a single market for goods and services, including telecommunications, and foster regional integration and cooperation. This initiative is expected to stimulate the demand and supply of fiber optic networks across the continent.
The access to high-speed internet is an essential element for socioeconomic development. Various international organizations use the indicator of "accesses per 100 inhabitants" to help measure economic growth, productivity, quality of life, and social well-being of a country, state, region, or city. The Organization for Economic Cooperation and Development (OECD) utilizes this indicator to monitor gaps between economies, much like the International Telecommunication Union (ITU), which is the specialized UN agency in information and communication technologies. It is crucial to monitor this indicator and develop initiatives to ensure that broadband is available to all, as it is fundamental for the future of our country.
Policymakers and regulators should lead to increase focus on fibre-optic networks which have the advantage over other traditional telecommunications access networks for customers and businesses. They should enable the operators and players in the sector to make investments and grow fiber optic networks.
Attention needed to utilize unused and unlit capacity (dark fiber). Duplicating is not economically sensible as it requires major new civil engineering work in all areas.
A fifth factor that drives fiber optic network growth in emerging markets is the innovation and competition among the fiber optic network operators and service providers, who strive to offer better quality, coverage, and value to their customers. Fiber optic network operators and service providers have adopted various innovative and competitive strategies, such as upgrading their network technologies and architectures, expanding their network coverage and reach, diversifying their product and service portfolios, and lowering their prices and tariffs. For example, Liquid Telecom, a pan-African fiber optic network operator, has invested in building the largest terrestrial fiber network in Africa, covering over 73,000 km across 13 countries. It also offers a range of services, such as cloud computing, data centers, internet of things, and digital skills training, to its customers.
Another driver for fibre optic growth in emerging markets is the integration of smart city technologies. As these regions urbanise, fibre networks become the backbone for IoT devices, intelligent traffic systems, and efficient energy management, fostering sustainable urban development and offering residents enhanced connectivity and services.
A lack of infrastructure-based competition (with adequate regulatory / open access framework) can actually enable further coverage with fibre technologies, especially in the access segment. This is not in contradiction with innovative offers by service providers either, as characteristics of services mostly depend on active equipment.
This is one of the significant factors for Brazil. In 2013, only five operators dominated 90% of all fixed broadband accesses in the country. However, a decade later, this scenario has changed dramatically, and now it is necessary to bring together 832 operators to achieve the same concentration of accesses. This change is due to the acceleration of competition, and these new operators have adopted superior technologies such as fiber as the main access medium, while the market-leading operators continued activating using coaxial or metallic cable. The evolution here is the result of the efforts of operators that are bringing fiber to every places of Brazil, helping drive the transformation and the new digital economy.
Despite the factors that drive fiber optic network growth in emerging markets, there are also some challenges and opportunities that affect the development and performance of fiber optic networks in these regions. Some of the challenges include the lack of adequate infrastructure, such as power supply and road access, the high cost of maintenance and operation, the regulatory uncertainty and complexity, the security and reliability risks, and the low affordability and awareness among the potential customers. Some of the opportunities include the emergence of new technologies, such as fiber-to-the-home (FTTH) and fiber-to-the-antenna (FTTA), the development of new applications and services, such as smart cities and e-agriculture, the increase in cross-border and intercontinental connectivity, and the collaboration and partnership among the stakeholders, such as governments, operators, vendors, and civil society.
In developing countries, establishing a well-planned fiber network faces significant hurdles, primarily due to theft, right-of-way issues, and the absence of comprehensive policies and effective policing. These challenges directly impact service quality and user satisfaction. Operators often grapple with addressing these issues independently, as government initiatives may be insufficient. To ensure the robust functionality of their networks, operators must navigate complexities like theft prevention and negotiate right-of-way obstacles, emphasizing the need for a collaborative effort between operators and government entities. Comprehensive policies and effective law enforcement become pivotal in safeguarding fiber infrastructure.
Rising demand for high-speed internet due to increasing smartphone and internet penetration is a key driver for fibre optic network growth in emerging markets. Government initiatives for digital inclusion and infrastructure development also play a crucial role alongside foreign investments and collaborations to enhance connectivity infrastructure. These factors collectively accelerate the deployment and expansion of fibre optic networks, facilitating improved access and digital opportunities.
Here one important thing I think missing is high speed internet required for AI & Big Data applications & algorithms. AI & AGI algorithms need excessive customer/user data for processing and effective decision making. So, fiber optic network is inevitable to feed these data hungry intelligent networks.