Has Gfast Reached Its Peak? All Signs Point to Yes.

Gfast we hardly got to know you…but its looking like your time may be over before you ever really got started.

8 ball - signs point to yes

This past week – the operator with the largest commitment to Gfast technology – BT’s Openreach,  informed ISPs that they will not be providing any further guidance on future build plans for their G.fast (ultrafast broadband 100Mbps+) technology.  This means that under the existing roll-out they will only cover 2.73 million UK premises by March 2020 versus previous plans to offer the 330Mbps-capable G.fast product to  5.5 million (down from the original 10 million) premises by the end of 2020.  .

According to multiple press reports, the company confirmed it is reassessing capital injection plans across all broadband technology platforms, including G.fast, while it drafts the next phase of fiber-to-the-premises deployment.

In July 2018, the government of the United Kingdom released its Future Telecoms Infrastructure Review (FTIR) which sets its strategy and goals for both FTTH and 5G.   In an effort to increase its competitiveness; boost productivity and meet the future demands of its consumers and businesses – the UK set targets of 15 million full-fiber (FTTH) premises by 2025 and nationwide coverage by 2033.  In order to provide nation-wide coverage of FTTH to all 27 million premises, an investment of £30 billion would be required.

A copper-to-fiber switchover happening sooner than planned?

The UK government believes (and rightly so) that a FTTH network would improve quality of service; be more reliable and offer operators lower maintenance costs than copper.  As such, it believes it to be prudent, and to encourage consumers to migrate to FTTH that a copper to fiber switchover strategy be in place to stimulate demand and could be in place across the majority of the country by 2030, with a possibility that is could occur as early as 2027.

BT has already raised its FTTP connection target from 3 million to 4 million as it faces increased competition from other FTTP providers such as CityFiber, HyperOptic, and Vodafone.

Current State of the Gfast market

Due to its super short loop lengths (50m for 1Gbps) – Gfast was always viewed (IMHO) as a highly tactical deployment to offer faster speeds in highly competitive environments where time to market was critical.   In fact, the top use case cited by 70% of operators (from our 5th Global Operator Survey on Gfast Deployment strategies) was Fiber-to-the-Building (FTTB), with the DPU placed in the basement of the MDU.  There has been virtually no interest by any operators (outside of BT’s Openreach) to deploy Gfast to single family homes.

Although Gfast has the capability to offer speeds up to 2Gbps – the majority of Gfast deployments were targeting speeds in the 250-500Mbps (BT’s Openreach was targeting 330Mbps) – far below the speeds that can be offered with FTTP.

Furthermore, cost remained a top concern for operators that are currently deploying or plan to deploy Gfast.  Factors contributing to cost concerns include the need to deploy fiber further into the network, as Gfast requires significantly shorter loops than VDSL2 Vectoring; the potential need for external power depending on DPU location, as well as new CPE.  In addition, since the distribution point will likely serve a smaller number of customers than ADSL or even VDSL2 Vectoring, the cost per subscriber is likely to be higher.

Beyond cost concerns, the quality of the copper plant – particularly within the MDU has proven to be challenge for those operators that are actively deploying Gfast.  Issues such as the type of cable – anything from CAT6 cabling down to pieces of flat cable patched together – as well as lack of documentation related to cable lengths have made deployment in some MDUs particularly challenging.

All of these challenges combined with a rapid increase in streaming services as well as the need for more fiber in support of 5G networks offers no surprises that we are seeing a change in strategy with respect to Gfast.

The actual volume of deployment is likely to remain relatively small – as operators continue to use this as a tactical tool to address very specific use cases for broadband service deployment.

Globally, to date, approximately 3.85 million Gfast ports have been shipped to operators – with the majority shipped primarily to two operators:  BT’s Openreach and Swisscom.   Although Australia’s NBN, Deutsche Telekom have also been vocal proponents of Gfast – these operators (with the exception of nbn) have also shifted their focus towards FTTP.

GlobalGfast

GfastShipments

As shown, Gfast shipments actually peaked in 4Q2018 and have steadily declined since this time period.  Huawei has been the market leader for Gfast as it is the primary supplier to the both Openreach and Swisscom.  And while they are the most likely to be impacted – its impact is minimal as they are also the provider of FTTP equipment within these (and many other) accounts.

Gfast will continue to offer a option to fill in the gap for speed when time to market is critical.  But its role as a long-term options for ultra broadband services has likely already seen its best days.

Has Gfast reached its peak?  All signs point to YES.