By Don Reckles
As the broadband market continues to evolve, cable operators face critical decisions about their network infrastructure strategies. With declining cable broadband subscriptions and the growth of Fiber-to-the-Home (FTTH), the choice between upgrading existing Hybrid Fiber-Coaxial (HFC) networks to DOCSIS 4.0 or transitioning to FTTH with Passive Optical Network (PON) technologies has become a pressing concern.
In making that decision, cable operators must appraise a variety of technological and commercial factors related to subscriber needs and wants, current and future network capabilities, capital and operating expenses, and more.
It is well known that FTTH/PON is superior to HFC/DOCSIS on virtually every technological metric – speed, symmetry, scalability, signal quality, latency, jitter, and reliability. However, things become less definitive when it comes to the cost and financial analysis.
To help cable operators in choosing the most viable upgrade path, Nokia, in cooperation with tech consultancy ePlus, conducted an extensive study to compare upgrading to DOCSIS 4.0 versus overbuilding with FTTH, focusing on capital expenditure (CAPEX), operational expenditure (OPEX), scalability, and revenue potential. The analysis used real-world deployment scenarios of varying densities and considered infrastructure requirements, maintenance costs, and long-term financial sustainability.
Extended Spectrum DOCSIS 4.0 Upgrade
An Extended Spectrum DOCSIS 4.0 (ESD) network provides a theoretical maximum of 10 Gb/s downstream and 6 Gb/s upstream, making it an attractive option for operators seeking to enhance their HFC networks. However, the financial analysis reveals significant challenges in achieving cost efficiency.
The CAPEX for DOCSIS 4.0 upgrades is driven by the need for Distributed Access Architecture (DAA)-capable Cable Modem Termination Systems (CMTS) and extensive upgrades to active and passive equipment, such as nodes and splitters, to achieve a 1.8 GHz Outside Plant (OSP). These infrastructure requirements add substantial costs to the upgrade process. Centralizing and sharing a CMTS across areas produces significant savings, but may limit peak capacities.
OPEX is another critical factor. Maintaining HFC networks involves higher ongoing costs compared to FTTH, primarily due to the complexity of the infrastructure and the need for frequent repairs and replacements. Power adds substantial OPEX because OSP components in HFC include active electronics. Additionally, DOCSIS 4.0 technology is still in its infancy, introducing uncertainties regarding its long-term reliability and scalability. These risks further complicate the financial outlook for operators considering this option.
FTTH and PON Evolution
In contrast, FTTH networks using PON technologies like XGS-PON (10 Gb/s) and 25G PON, which deliver symmetrical throughput, offer a more straightforward and scalable solution with upgrades requiring changes only at the end points. Extending fiber in the OSP followed by drops to the homes predominate the CAPEX for FTTH overbuilds. Making use of remote Optical Line Terminals (OLTs) eliminates the expense of high-count fiber, and strategic measures, such as phased deployment, can significantly reduce initial investment requirements.
One of the key advantages of FTTH is its long-term OPEX benefits. The passive nature of the network can deliver an immense 80% to 90% power cost savings in the OSP. Fiber networks also are inherently more reliable and require less upkeep compared to HFC networks, resulting in lower maintenance costs and higher customer satisfaction. Furthermore, FTTH’s higher performance enables a wide range of high-value use cases, including enterprise services, mobile transport, smart city applications, and converged network services. These capabilities drive higher average revenue per user (ARPU) and unlock new revenue streams for operators.
Comparative Insights: DOCSIS 4.0 vs. FTTH
The study highlights several key findings:
- CAPEX similarity: DOCSIS 4.0 upgrade and FTTH brownfield overbuild yielded results that were comparable to one another, especially in the case of a dedicated CMTS.
- Long-term financial benefits: FTTH overbuild offers superior financial sustainability due to lower OPEX, higher reliability, and greater scalability.
- Future-proofing: FTTH has a clear edge in supporting next-generation speeds and services, making it the more future-proof option.
- Risk assessment: DOCSIS 4.0’s technological immaturity introduces risks compared with FTTH’s proven reliability.
Strategic Recommendations for Cable Operators
Each operator’s situation is unique, and there are many variables to consider, however, the study suggests that transitioning to FTTH is the better choice for long-term financial sustainability. Operators can adopt the following strategies to balance financial constraints and operational needs:
- Phased deployment: Begin in pockets with high-bandwidth users, localities threatened by fiber competitors, and high-density areas where FTTH deployment yields quicker returns.
- Leverage partnerships: Collaborate with municipalities, utility companies, or technology vendors to share costs and resources.
- Explore funding opportunities: Investigate government grants or subsidies aimed at expanding broadband access to underserved areas.
Leadership teams should prioritize FTTH investments to ensure competitiveness, improve service quality, and unlock new revenue streams in an increasingly demanding market. By leveraging FTTH’s scalability and reliability, operators can position themselves for long-term success.
For a deeper dive into the analysis, download the comprehensive whitepaper on Nokia’s Fiber Broadband for Cable Operators webpage.