Most consumers do not need FTTH speeds and capacity, but there are other reasons why households may pay a premium for full fibre connectivity.

The current picture of fibre connectivity

This report explores how telcos can persuade more households to buy full fibre connectivity. The analysis focuses primarily on adoption in Europe where many telcos have now built out extensive fibre networks but have seen widely varying degrees of consumer uptake. However, much of the report’s analysis and conclusions will be relevant in developing countries, where telcos are rolling out fibre in major cities. A chapter on Indonesia explains how the dynamics differ there from in Europe.

While FTTH is the state-of-the-art in connectivity, many households worldwide get by using much less capable technologies. Even in wealthy cities, such as London and Munich, only a small percentage of households have a full fibre connection.

Indeed, consumer adoption of fibre connectivity varies dramatically across the developed world. In some countries, such as South Korea and Japan, fibre to the building (FTTB) accounts for approaching 90% of all broadband connections, while in the UK and Germany, it is less than 15%, according to OECD figures (see the figure below). Note that the figure below includes FTTH, fibre to the premises (FTTP) and FTTB , but not FTTC and fibre to the node (FTTN). The latter technologies rely on copper wires to connect the fibre network to each building.

For the purposes of this report, FTTH and FTTP constitute a full fibre connection. The OECD also includes FTTB connections, but these could be shared by multiple households within that building and the final connection to the household will be by alternative means, which could reduce the bandwidth available to each user.

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Usage of full fibre broadband varies dramatically across developed markets

Includes FTTH, FTTP and FTTB. Excludes FTTC and FTTN.
Source: OECD, December 2022

In some countries, alternative technologies, such as hybrid fibre-coaxial (HFC) and very high-speed digital subscriber line (VDSL), are used to provide consumers with high-speed broadband. But even taking these alternative technologies into account, there are major disparities in the usage of high-speed broadband in developed countries.

As illustrated in the figure below, in the UK and Australia, there are less than 10 fixed line 100 Mbps+ connections for every 100 inhabitants, while in South Korea, Switzerland and Portugal that figure is 40 or more, according to the OECD. In some countries, notably France, Hungary and Switzerland, fixed lines with throughput speeds of more than 1 Gbps are reasonably widespread.

Even between neighbouring countries within the European Union, such as France and Germany, there are major differences in the quality of connectivity used by households.

Number of high-speed fixed broadband lines per 100 people in 2022

Source: OECD, December 2022

Some of these differences are down to supply factors – in some areas, high-speed broadband is not available simply because telcos have not made the necessary investments. One challenge has been the historic reluctance of cash-strapped incumbent telcos, such as BT in the UK, to take the major financial hit involved in replacing functioning copper networks with fibre.

In addition to the substantial cost of laying fibres in the ground, connecting a household could cost another €300 to €500 to run a drop from a fibre chamber in the street and install an ONT (optical network terminal) at the house, especially if local rules require cables to be underground or on building facades, rather than aerial strands.

Another complicating factor is the role of landlords, especially in countries where many people live in rental properties. Telcos and/or the tenants may need to get the landlord’s permission to run fibre into/through the building. To overcome this hurdle, some countries, such as Spain, have introduced rules that essentially force the landlord to allow the telco into the building.

Table of contents

• Executive Summary
  • Keep it simple and sell reliability
• Introduction
• The case for full fibre
• Telefónica Spain is about to switch off copper
• Deutsche Telekom sees slow and steady uptake
• Orange is forced into aggressive pricing
• BT is stretching the case for fibre
  • CityFibre puts BT under pressure
• FTTH in developing countries is very different
  • Fibre makes incremental progress in Indonesia
• Conclusions
• Index

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