RIYADH – Governments and regulators must move decisively to fiber in order to support future economic growth, said Arthur D. Little (ADL) in its new report “National Fiber Strategies: National economic imperative or just another private industry task?” Saudi Arabia is among the least developed GCC countries when it comes to fiber deployment but has previously had success in promoting mobile and broadband services with its Universal Services Fund program. Despite the on-going work of key fiber players such as STC and Mobily, a lot of work still has to be done. “Government should make fiber infrastructure a national priority,” said Dr. Karim Taga, Managing Partner and Global Practice Leader, ADL TIME practice. “This means devising new ways of financing and promoting future deployment in order to catch up with neighboring countries in the GCC.” There are clear economic benefits to improving broadband infrastructure; jobs are created and there is a permanent boost to GDP. Ultra-fast broadband also drives critical diversification of economies, as small and medium businesses are among the first to benefit from new services. It is no longer possible to modernize and upgrade the copper-based network. Whole fiber or mainly fiber networks are needed for the fastest fixed access services and to underpin the micro layer of the latest mobile backhaul networks. These benefits do not come cheap, as the investment needed is vast. On the back of huge investments made by incumbent operators, some GCC countries are already ranked as global leaders in passing /connecting homes to their FTTH networks. Although this is bringing increasing visibility to the region in global discussions on high-speed broadband infrastructure deployment, the Middle East still has significant challenges to overcome that require intensive government participation. Based on a global market survey, ADL has identified five National Fiber models that governments around the globe have followed to reap the benefits from fiber. ADL has concluded that the most promising fiber strategy models involve a hybrid approach, a combination of free market competition, graded government coordination and geographically-targeted public investment open to competitive bid. “Governments should ensure the right regulation and control so that funding can maximize the economic impact,” said Taga. “Choosing a National Fiber strategy is about identifying the best model for specific national market conditions and applying that model well.” An analysis of achieved penetration rates reveals the complexity of the National Fibre topic and indicates where national situational factors can swing to favor either FTTB/H or hybrid FTTCab models. It is clear that it is already time for FTTB/H solutions in many countries. While it is tempting to look at the top and bottom of the list to find winners and losers in the fibre race, this would be an oversimplification that ignores many markets' specific characteristics, such as where FTTCab is a valid alternative. Each example of the various National Fibre models is unique. For example, the UK, due to its relatively compact geography and proud, 100-year history of significant network investments, has a good copper- and coax-based access network. The country enjoys a high proportion of fast broadband (circa 50 percent of homes have access to 50 Mbps or greater). This situation has impacted the timing and reduced the pressure to move fully to fiber solutions. This gradual approach has also been adopted in other countries where cable and FTTCab address the need for increased connection speed with limited marginal costs, and enable further enhancements to be implemented over time. However, 50 Mbps will rapidly be seen as modest, and the need to move to FTTB/H may be approaching over the next five years. — SG
