There is much effort being put into closing the digital divide around the world. Governments recognize the importance of broadband connectivity for sustaining communities, not to mention the socio-economic benefits that it brings. But even in nations with the most advanced broadband networks, there is still work to do, especially in bridging the gap between urban and rural connectivity.
In the U.S., a Pew Research study found that almost 30% of rural Americans do not have a broadband internet connection at home. In Europe, the European Commission’s Digital Divide report estimates only 18% of citizens in rural areas have broadband of 30 Mb/s, which is barely adequate for modern digital living standards.
The business case has long been the challenge for deploying fiber broadband in rural locations, but recently, governments have been stepping up incentives with initiatives like the Rural Digital Opportunity Fund in the U.S. and the EU’s Recovery and Resilience Facility.
With demand for rural connectivity surging, both for residential and for modern agricultural and Industry 4.0 applications in rural areas, the business case for deploying fiber to rural communities is increasingly attractive, with the added benefit that the first operator to invest closes the door on competitors.
Recently, fiber broadband has seen an innovative application scenario in rural areas. For example, the town of Kayamandi in South Africa uses a fiber broadband network to deliver affordable, uncapped, ultra-fast broadband services accessible to everyone. Users can connect their devices (smartphones, personal computers, etc.) to township Wi-Fi, which is backhauled by the fiber access network, with time-based and pay-as-you-go pricing schemes. This is both more cost-effective and user-friendly than mobile data solutions.
The key question today for rural broadband deployment is whether to use Gigabit Passive Optical Network (GPON) or XGS-PON technology, which delivers 10 Gb/s.
Some argue that GPON, with its 2.5 Gb/s capacity and lower cost, is sufficient to serve the lower number of users and endpoints in rural areas in a cost-efficient way. However, the relative cost difference between GPON and XGS-PON is small because the biggest cost is in laying the underground optical fiber cables and building the outside plant — which is the same for both technologies.
So, if the cost difference is incremental, why not deploy XGS-PON from the start?
GPON is slowly running out of steam, especially with Gigabit speeds now becoming a standard service offering. PON is based on point-to-multipoint architecture, where multiple users (usually around 30) share the same fiber feeder. As bandwidth usage continues to grow, and each user on a PON needs to be able to access Gigabit speeds at any time, the GPON capacity will likely be insufficient in a few years. It is not long before XGS-PON will be necessary, making it the more future-proof option.
Moreover, there are other compelling reasons to go straight for XGS-PON. For a start, a market with 10 Gb/s services will not attract competition and new players, because it will be hard for them to compete on service quality. Therefore, XGS-PON protects the market.
The higher capacity brings more revenue, not just from higher-tier broadband services but from business and industry, and this capacity will be enough for many years, eliminating the need for a near-term upgrade. Additionally, 10 Gb/s is also enough for additional services to be run simultaneously on the same infrastructure, such as 4G/5G mobile backhaul. This also brings a new revenue opportunity or a cost saving for converged operators rolling out their mobile networks.
Incidentally, this converged approach is the future for fiber broadband networks, as fiber-to-the-home networks become fiber for everything, connecting homes, businesses, industries, smart cities, mobile cells, you name it, and making the business case even stronger. XGS-PON makes sense for a brand-new fiber deployment as the incremental cost over GPON is much smaller than the substantial capacity increase XGS-PON brings. All this is why XGS-PON will soon overtake GPON as the fiber technology most widely deployed.
Operators nevertheless need a pragmatic approach to fiber deployments in rural areas to manage costs and maximize returns. Recent technology advances help. Multi-PON, for example, is a universal fiber solution that is seeing exponential growth. Every port on a Multi-PON blade can work in GPON mode, XGS-PON mode, both GPON and XGS-PON simultaneously, or 25G PON enabling operators to start with the most cost-optimized solution and still be able to boost the speeds when and where needed with minimal incremental investment.
For example, they can start with lower-cost GPON, which can still deliver very competitive speeds, and then introduce XGS-PON for power users like factories, or even 25G PON. This is a huge advantage for deployments because it gives operators flexibility and choice, applying each technology where it makes sense, and having a seamless, future-proof upgrade path.
Finally, the alternative to investing in rural fiber broadband is, well, to not invest. This prolongs the current situation with unserved and underserved communities left socially and economically disadvantaged; meanwhile, urban and suburban areas will continue to surge ahead.
Government and municipal broadband initiatives care deeply about rural broadband because of its direct benefits for citizens, the attractiveness for businesses, and the effect on population flows from rural to urban areas.
And shareholders invest in businesses with strong corporate social responsibility (CSR) agendas, so it helps that rural broadband not only improves lives, but it also decreases the world’s carbon emissions both directly, compared to alternative broadband technologies, and indirectly by enabling online and remote activities that would otherwise involve transportation.
Not investing in rural broadband does not mean status quo — it means going backward. The way forward is fiber and XGS-PON.
