Italy’s Fastweb Relying Heavily On VDSL Profile 35b

The following post comes from Kagan, a research group within S&P Global Market Intelligence. To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Over the last year, Italy's Fastweb SpA has deployed over three million very high bit-rate digital subscriber line, or VDSL, Profile 35b lines, that are a speedier version of vectored VDSL2. These are being used to deliver broadband speeds of up to 200 Mbps over existing copper as part of its enhanced VDSL technology initiative. VDSL Profile 35b essentially doubles the frequency of existing VDSL2, from 17 MHz to 35 MHz, thereby doubling the theoretical bandwidth available to customers over 300 to 400 meters. Italy is blessed with short loops, generally averaging 250 meters or less, making it an ideal candidate for the technology.

Profile 35b is an ideal technology for European operators who have a tremendous number of copper lines in their networks. Along with Fastweb, Telecom Italia SpA, Deutsche Telekom AG, Swisscom AG, and Telekom Austria Group have all noted that Profile 35b will be part of their broadband technology portfolios, which include vectored VDSL2 and G.fast. For these operators, maximizing copper assets is a must, and VDSL Profile 35b allows them to consistently offer 150 to 200 Mbps services for around $100 per home, assuming cabinets are already in place. In Germany and Italy, cabinets are abundant, as operators there have already been down the well-worn path of digital loop carriers, and VDSL digital subscriber line access multiplexers, or DSLAMs.

Fastweb has been understandably quiet about this technology, as both it and Telecom Italia have promised fiber-to-the-home, or FTTH, to subscribers for years, but there has been very little in the way of deployments to date. The lack of interest in FTTH deployments from these two operators is one reason why the Italian market has historically lagged behind the rest of Western Europe when it comes to premium broadband availability.

However, the focus on vectored VDSL2 and, more recently, VDSL Profile 35b has helped push Italy's growth in broadband subscriptions with speeds averaging 15 Mbps or higher, up 98.4% from 2015 to 2016 — the highest growth among Western Europe's biggest markets. Fastweb clearly has an incentive to get premium broadband services and speeds out to subscribers with the expanding presence of the state-backed utility Enel SpA's Open Fiber unit, which is investing in FTTH networks and is currently live in nine Italian cities: Bari, Bologna, Cagliari, Catania, Milan, Naples, Perugia, Turin, and Venice.Fastweb is relying on DSLAMs from Huawei Technologies Co. Ltd. and customer premises equipment, or CPE, from Technicolor. The company expects to reach 13 million users in 500 cities by 2020 with its enhanced VDSL offering, which will likely include a combination of VDSL Profile 35b and G.fast, along with vectored and bonded VDSL2. The enhanced VDSL offering relies on a fiber-to-the-cabinet architecture, whereby fiber is delivered to a cabinet or pedestal that houses the DSLAM that delivers the VDSL connection to subscribers over the last 250 meters.

Deutsche Telekom was expected to have already deployed VDSL Profile 35b technologies beginning in 2016. However, its rollout was postponed due to the lack of CPE, and the company is now committed to widespread deployments beginning in the first half of 2018, with subscribers being added in the second half of the year. The deployment could result in over 50 million VDSL Profile 35b ports being deployed over the next three to four years.