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Research from Rethink TV is making the claim that there will be no less than a boom in the market for virtualisation of fixed broadband access infrastructure and that it will sweep through almost all internet connections over the next decade.
The research forecasts that the fundamental dynamics will likely see 500 million broadband virtualisation connections by 2025, representing two-fifths of the total 1.26 billion global broadband subscriber base. This compares with 0.48% at the end of 2018 and 2.58% at the start of 2020.
With voice alone no longer generating much revenue, and margins for video squeezed to around 15% in North America and Europe, broadband continues to deliver 60% or more of operators’ revenues. Such a dynamic is intensifying competition in the broadband space and driving operators towards virtualisation to defend those generous margins.
As existing broadband infrastructures have evolved to higher speeds through technical advances in terminating equipment and increased penetration of fibre, Rethink says operators are now running out of road for further improvements and that this is inhibiting new services, thus providing a stimulus to virtualisation.
In its Virtualisation to capture 500 million fixed broadband customers by 2025 report, Rethink said multiple service operators (MSOs) have become all too familiar with the scaling issue as they face increased bandwidth consumption rising. This has driven demand for additional hardware-based converged cable access platform (CCAP) platforms consuming increasing space and power, both at the headend and in hub sites, while also requiring ever more complex fibre links.
The initial advantages of the CCAP architecture were mitigated by tight integration between hardware and software, which meant that upgrades such as migration from DOCSIS 3.0 to DOCSIS 3.1 required substantial changes to both that had to be carefully coordinated. Virtualisation, by decoupling hardware from software, allows both hardware and software to be upgraded independently and brings the immediate benefit of being able to scale efficiently.
The pace of virtualisation adoption is set to pick up during 2020 and continue to increase over the next five years, running at over 9% of total connections per annum by 2025.
The study also suggests that virtualisation will proceed at around same pace in all regions except for Africa, with relatively little difference between the telco and rather smaller cable broadband sectors. Such a roll-out, said Rethink, reflects virtualisation being universally recognised as essential to contain costs and boost efficiencies in a cut-throat broadband market that has become the lifeblood for cable companies and telcos alike.
US cable company Comcast and telco Deutsche Telekom were cited in the report as being among the strongest early adopters, and added that many operators in developing countries across Asia-Pacific and Latin America will be not far behind as they deploy virtualised equipment, expanding footprint and as part of the replacement cycle.
Some developing countries will be among the leaders, with Indonesia on course to virtualise 63% of its connections by 2025, a considerably higher proportion than the US on 42.8% with a greater encumbrance of legacy.
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