While the speed and capacity of global telecoms infrastructures have grown exponentially during the past few years, carriers still find themselves constrained by an old bottleneck.
The last mile, that final leg of a telecoms network between a local exchange and a subscriber, still represents a considerable challenge for operators trying to deliver true broadband services.
Often consisting of an ageing pair of copper wires, the last-mile link determines the maximum connection speed possible, regardless of the performance of other parts of the network. Frustrated users often face sluggish data transfer rates that make all but the most basic online activities all but impossible.
"The last mile is a huge challenge for carriers around the world," says Telstra's Chief Technology Officer Hugh Bradlow. "It is a critical link and one that is vital for the uptake of future broadband network services."
To overcome these restrictions, a range of technologies is emerging, designed to remove the bottleneck and improve user experiences. Some augment existing infrastructure while others bypass it completely.
"There is no single answer to the last-mile challenge," says Bradlow. "It is a matter of using the best technology for a particular situation. We are going to see some interesting changes during the next few years."
When it comes to extracting better performance out of existing copper connections, xDSL technologies continue to grow in both usage and performance. The most popular, ADSL (asymmetric digital subscriber line), can offer speeds of up to 6 megabits per second to the subscriber (downstream) and more than 800 kilobits on the return path.
Another variant gaining an enthusiastic following is VDSL (very high-rate digital subscriber line), which offers up to 55 megabits per second downstream and upstream speeds of around 2.3 megabits per second.
Of the real-world challenges faced by all xDSL technologies, the most restrictive is the length of copper over which they will work. As the distance between subscribers and their local exchange increases, performance decreases. If the distance is more than a couple of kilometres, ADSL will not work at all.
VDSL is even more restrictive, requiring a link no longer than a couple of hundred metres.
Practically, this requires providers to locate network nodes in individual streets rather than exchanges. The nodes are connected to the exchange via fibre links, meaning copper only has to be used for the very last hop to the premises.
However, this need to place equipment close to users will severely limit the take-up of VDSL technologies, says Meta Group Senior Research Analyst Bjarne Munch.
"Carriers are reluctant to place expensive equipment in cabinets on the street where it is hard to protect and maintain," he says. "The technology can be used more easily in larger buildings, but not when trying to cover large suburbs."
Despite such technical challenges that will delay faster DSL technologies, Munch expects demand for ADSL to continue to grow among both business and residential users. Its stability and reliability, combined with its coverage of the majority of potential users, will ensure it remains the dominant form of last-mile broadband connectivity for the next few years.
The emergence of newer incarnations of ADSL, such as ADSL 2 offering speeds of up to 12 megabits per second and ADSL 2+ which can deliver up to 24 megabits per second, will help to further drive demand for services.
However, popular as it is, ADSL will not have a stranglehold on the last mile for ever, and many in the industry believe it is only a matter of time before it is replaced by even faster technologies. Ericsson Australia broadband expert Colin Goodwin says it is inevitable that copper connections will give way to optic fibre in an evolution that will provide "true broadband speeds".
"As wonderful as ADSL is, it is inevitable that it will eventually be replaced by optic fibre," says Goodwin. "Trials have started and the pace will continue to grow."
Called Fibre To The Home (FTTH) or Fibre To The Premises (FTTP), such trials are gathering pace and provide a glimpse of what is possible when last-mile speed restrictions effectively disappear.
Goodwin says that, once data speeds move towards gigabits per second, a host of new applications will emerge that will fundamentally change the way people use their links for work and leisure.
Extensive research has shown there are demonstrable economic benefits to be gained from widespread, high-speed broadband connections and fibre will ultimately be the way these connections are delivered.
But it won't happen overnight. First will come FTTH implementations in green field sites such as new housing estates where there are no existing copper phone lines. High-density areas such as large apartment and office blocks are also likely to be early adopters of the technology.
However, no one is expecting carriers to undertake large-scale overlays of existing copper networks any time soon. The economic arguments simply do not stack up. However, as these links age and require replacement, it is likely this will be done with fibre.
"Fibre is definitely the new local loop," says Goodwin. "It is just going to take some time."
In Western Australia, one carrier is investing heavily in fibre in the belief that the speeds it can offer will drive future customer demand. Clive Stein, Chief Operating Officer with Amcom, says customers are already hungry for local loops that can offer better speeds than ADSL.
"We have seen data speed demand grow from an average of 2 megabits per second to 10 megabits," he says. "We believe it will continue to grow to 100 megabits and gigabit speeds in the not-too-distant future."
Stein says ADSL can take users to a certain point, however they will soon find they are using applications that require a much faster link. At that point, fibre becomes the only choice.
But while enthusiasm for wire line-based local loop technologies continues to grow, many telecommunications industry players are placing their bets on a range of emerging wireless alternatives.
"Realistically, wireless local loop is the only way people are able to completely break free from the constraints of Telstra," says Meta's Munch. "We are seeing more and more development and take-up in the wireless area than ever before."
Wireless local loop options can be divided into two camps - those using licensed and those using unlicensed spectrum. Wi-Fi, or 802.11 technology, is dominating the unlicensed space, while a range of operators such as Sydney-based i-Burst are staking their claims in the licensed arena.
The use of Wi-Fi as a last-mile alternative is gathering pace as the technology matures. Traditionally strong in office and home networking applications, Wi-Fi is showing it has the reliability and reach to be a serious wireless local loop technology.
"It is interesting to watch its development," says Telstra's Bradlow. "It certainly has a way to go, but people are demonstrating that there is a business case for its deployment in this space."
Senior Marketing Manager with carrier Request, Chris Roberts says a key advantage of Wi-Fi-based services is their low cost base.
"The standards have been in place for a while and equipment costs are coming down quickly because demand is driving economies of scale," he says.
Roberts believes there is an opportunity for providers of these services to appeal to customers who do not have access to cable or ADSL services. "There are black spots in cities and large country centres where those services will not be available for some time. Here there is definitely a market for wireless local loop technologies," he says.
This is exactly the strategy being adopted by small New South Wales-based service provider BigAir. The company is using Wi-Fi standards to create a wireless local loop service for subscribers out of the reach of other technologies.
BigAir Chairman Jason Ashton says his company has started small, but already has a number of paying customers in the inner-Sydney area.
"We are targeting multi-tenanted buildings where the cost of the antenna equipment can be shared between a number of customers," he says.
While some dismiss Wi-Fi technology because of fears of overcrowded spectrum and interference problems from electrical equipment, Ashton says his service operates well, delivering multi-megabyte data speeds.
"We use specially designed directional antennas which reduce interference and ensure ongoing high data speeds," he says.
Once an antenna has been installed on the roof of a building, BigAir uses existing cabling to distribute the service within the building via an ethernet network. As well as Internet and high-speed networking, the company is also looking at delivering voice services in the near future. Already BigAir has four operational base stations in central Sydney and plans to install another 10 during the next 12 months.
"Overall, we can provide a wireless local loop service that competes very well with DSL," he says. "And we have significant cost advantages. If we have 50 customers connected via a base station, it can make that base station break even."
Ashton says the company is also closely looking at the emerging WiMAX, or 802.16 standard, which offers higher data speeds through more effective use of allocated spectrum.
WiMAX is capable of delivering data speeds of up to 70 megabits per second over distances of up to 50 kilometres. Equipment is expected to be commercially available early next year.
IDC Senior Analyst Warren Chaisatien agrees WiMAX has significant potential as a wireless local loop technology.
"Its speed is very impressive, however it could suffer from the same interference and capacity problems as Wi-Fi unless networks are carefully planned," he says.
Telstra's Bradlow says WiMAX is built on "an impressive set of standards" and could have a lot to offer as a competing WLL technology.
"This is a happening thing. WiMAX is the next big thing," he says. However he couched his enthusiasm with a little caution. "Radio technologies are always more complex to deal with than fixed. I would still exercise a little caution until we see real-world performance."
Meanwhile, in the licensed spectrum space, operator i-Burst is finalising trials ahead of its commercial launch. The i-Burst system uses directional antennas to provide multi-megabit speeds to both mobile and fixed users within the coverage range of its base station network.
The company is yet to announce pricing schedules, however it is expected to have a competitive offering for home and business users looking for a WLL alternative.
"There are a range of potentially disruptive technologies emerging in the wireless space at the moment," says IDC's Chaisatien. "It will take a while before things settle and we can see which will be successful."
During the next few years, last-mile technologies will continue to be driven by technical innovation and market forces. DSL-based services will continue to dominate in the medium term, while wireless offerings will quickly gain ground.
For users, such developments will result in greater choice, more competitive prices and better speeds. The days of ubiquitous, high-speed broadband services will have come a step closer.
