It was recently announced that Israel’s largest cellular operator Cellcom is planning to deploy street cabinets aimed at offering wireline broadband services, based on a FTTC model. At the same time, it was announced that Orange Israel, the country’s second largest operator, will expand its next-generation, rich-media services using BitStream, an approach similar to a virtual operator which does not require actual deployment of equipment, but rather is based on leasing capacity from third parties
The above are some examples of the sudden twists cellular operators have been taking to stay profitable and competitive. The Israeli cellular market is currently undergoing a golden era (if you ask end users…), with the introduction of MVNO providers and even two new regular cellular operators, a fact which considerably brought down ARPU. While end users are joyfully bargaining and switching between operators, the three established cellular operators had to come out with creative ideas to survive the sudden drop in revenues.
Cellcom decided to use its country-wide optical network, which has been deployed over the past years and covers most of the urban areas of Israel. This way, it can fully control the transport and aggregation parts of the new services and all is left is to find a solution for the last mile. Bezeq, the original incumbent, controls the copper-based last mile, and is obliged by law to unbundle. Although unbundling is regulated, no other operator tried to implement this right, up until now. Cellcom’s decision to use its deep-reaching fiber, combined with FTTC (Fiber-to-the-Cabinet), means that they will claim unbundling rights, and take it to the very last loop.
They will have to deal with a number of issues:
- Real estate – Cellcom will have to obtain permissions from municipalities for their cabinet deployments.
- Connectivity – Assuming Cellcom will resolve the location issue, they will have to find a creative way of connecting their active equipment customer-facing interface to the copper bundles currently terminated in Bezeq’s cabinets.
- Interference – Bezeq is using VDSL2 to offer 100Mbps services and, assuming it will soon introduce vectoring, this may severely jeopardize Cellcom’s ambitions for NG broadband.
Out of the three, the later may pose the hardest-to-solve issue. In the last few months, a number of publications have been released, discussing the pros and cons of the so called xDLV (Cross-DSLAM Vectoring), a concept aimed at solving issues of multiple VDSL2 DSLAMs accessing the same copper bundles while trying to run effective vectorized services. While these publications are highly informative and very academic, none presented a down-to-earth solution for multiple DSLAM deployments (from the same operators and even worse, from two operators, incumbent and alternative). No wonder that, from these studies, one may easily consider BitStream-type services as viable and adequate solutions. And this should not cause many surprises, since BitStream is a win-win situation. For the incumbent operator, an array of FTTC DSLAMs enabling vectorized services allows them to sell bandwidth to end users as well as to alternatives operators. This way their ROI is much faster, and they can expand field deployments. For alternative operators, the wining argument is obvious - $$$$$.
This has been the case in the UK with BT Openreach, and this is the case in Austria with A1, in Italy with Telecom Italy and others. Even in EEC documentation, where sub-loop unbundling is promoted, BitStream is also mentioned as a very acceptable and desired solution.
To summarize, cellular operators will have to diverse their services portfolio to maintain their revenues, which means wireline broadband services. But the question is – how? Extra capex (FTTC) or opex (BitStream)? There is not one answer that fits all, but network and business realities often dictate a preferred path.
Product Marketing Manager
Network Solutions Division