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Europe is Fiber-to-the-Home Hotspot

Recent announcements by the cities of Amsterdam and Paris that they plan to deploy pilot fiber-to-the-home networks have been reinforced by a similar declaration from France Telecom. Deutsche Telekom had already indicated last year that it was making FTTH plans, and several big initiatives are under consideration in Spain.

"FTTH has been seen as a big draw in North America and Japan," notes Michael Arden, principal analyst at ABI Research. "Now, with the Europeans talking about connecting hundreds of thousands, perhaps millions of homes, Europe is becoming a hotspot."

Why Europe, and why now? "Europe has been seeing a lot of IPTV and 'telco TV' growth � it is taking off there far faster than in North America, and is offering more sophisticated services than in Asia," says Arden. "As demand for TV technology increases, so must the capacity and capabilities of the access technology. Operators and equipment vendors are increasingly interested in this market because they see IPTV starting to gain more and more traction."

Indeed, a number of large equipment makers have recently thrown their hats in the FTTH ring. Siemens, for example, brought out a PON solution during 2005, because it was getting involved with IPTV and wanted to be able to address it from end to end. Nortel, Fujitsu and Siemens are all examples of large vendors who recognize that they have to provide more than just one piece of equipment; they must have an overall package.

What will spell success for these vendors? What threats exist? On one hand, all players in the FTTH market are potentially threatened by further technical improvements in DSL, which currently dominates the European telco TV landscape. More narrowly, it has frequently been smaller operators and smaller vendors that have set the pace in fiber network deployment. But now that Verizon, NTT, France Telecom and other large telcos around the world are getting involved, their existing equipment suppliers � including the big vendors named above � will in the longer term have the better market position.

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