Bringing it home: With a number of providers set to introduce fibre-optic infrastructure, internet speeds should rise dramatically

A number of firms are investing in bringing fibre-optic cables all the way to people’s homes – known as fibre-to-the-home (FTTH). An alternative to FTTH is fibre-to-the-building (FTTB), which brings fibre-optic cable to the consumer’s building, but then completes the final distance to individual rooms via copper wire. Although the FTTH/B segment remains small, its expansion is set to radically increase download speeds and have a major impact on the way Saudis use the internet.

While fibre-optic cables have long been widely used for the wholesale transmission of data, the final connections to homes and offices often remains metal wire DSL connections (including in the case of the great bulk of Saudi fixed internet subscriptions).

FTTH, which is now being rolled out in the country, will change this by using fibre for the entire network, thereby significantly increasing connection speeds. For example, the fastest DSL retail package currently offered by the state-backed telecoms operator Saudi Telecom Company (STC) has peak speeds of 40 Mbps, compared to 100 Mbps for its FTTH service. Some fibre operators in the Kingdom are providing connections as fast as 1 Gbps to corporate customers, and in other countries in the region, such as Turkey, operators are offering equivalent speeds to retail customers (albeit currently at costs few households are likely to be willing to pay).

Need For Speed

The need for fibre is being driven by factors such as rising demand for high-definition video downloads and streaming, and the growing popularity of cloud computing and cloud storage, both of which involve increased bandwidth use and require high download speeds. Furthermore, Saudi Arabia has widely distributed and sprawling cities, and fibre cables can run over greater distances from connection nodes than copper lines without a negative impact on speeds.

The fibre segment in the Kingdom remains in its early days; as of the end of 2011, there were only 35,400 FTTH/B subscribers, according to research carried out by media and ICT industry research firm Pyramid Research. However, although accounting for only around 1.8% of the Kingdom’s fixed broadband subscribers, the segment represented year-on-year growth of over 500%, and was the second-largest FTTH subscriber base in the MENA region (though it was dwarfed by regional leader the UAE, which had 445,200 subscribers). According to Pyramid Research, the number of homes passed by FTTH/B networks in the Kingdom – homes that could potentially subscribe to services – stood at 115,200 in 2011. Again, while this remains fairly low (the figure for the UAE, which has a substantially smaller population, stood at 1.19m), it represented growth of 290% over the 2010 figure.

In The Pipeline

A range of operators are providing or plan to provide FTTH services, including utility firm Saudi Electricity Company, as well as telecoms operators STC, Mobily, Go (Etihad Atheeb Telecommunication Company) and ITC (Integrated Telecom). STC in 2010 became one of the first operators in the MENA region to offer FTTH and the company aimed to connect over 500,000 residences to fibre by the end of 2012 and to have doubled the figure a year later. Mobily aims to bring fibre to 800,000 homes and companies by 2016. In March 2011, Go appointed Chinese firm ZTE to build its FTTH/B network, focusing first on Riyadh with plans to later move on to Jeddah and Dammam.

With Speed Comes Service

The roll-out of FTTH is set to transform the way Saudis use the internet. Currently, use is fairly traditional, with emailing, internet browsing and social networking making up the top three uses of the internet in 2010, according to the CITC. Consuming audio and video, and sharing media online came in seventh and eighth place, respectively, with less than 40% of Saudis using the web for this purpose. However, the enormously increased download speeds offered by FTTH are likely to see a surge in usage, though this will also require growth in the currently low levels of e-commerce to accommodate legal media purchases. Emerging services that leverage higher speeds, such as e-health and telemedicine, are likely to have knock-on effects that will be felt across the economy as a whole.