The FTTH (Fibre to the home) council recently held its fifth annual meeting in Seoul, South Korea. Encouraging positive financial examples were reported. Yet cost-effective networks, particularly for non-urban communities and new services uniquely suited for FTTH, continue to challenge this market. Structural separation and open networks are important ingredients being molded to address this problem.
As the Asia-Pacific region has the largest number of subscribers on a FTTH/B-based network, and the conference host country leads the world in FTTH household penetration, the setting was perfect to review progress and highlight future directions.
FTTH installations show positive financial results
Chul Jeung Hwang, the Director General of Korea Communications Commission, cited the familiar adage (FTTH) is a first pay, later return method. But the telecoms market has been anxiously awaiting the return. At this years meeting, a near critical mass of positive financial results was on display. Here are some examples:
- NTT reported its FTTH ARPU increased 16% from 2006 to 2009 (¥4,800 per month to ¥5,590).
- Broadband ARPU levels were reported to be up 30% when compared to DSL. FTTH users consume five to ten times as much access capacity as DSL users.
- NTT boasts increased revenues from IPTV viewers to the tune of $10 million per month.
- A capex reduction for FTTH deployments was noted. Advances come from cost sharing and cost reductions in fiber deployment, home installations, and materials. NTT reported a reduction for a single house from $3,400 in FY 2004 to $1,500 in FY 2009. Similar cost-reduction rates were cited for Verizon and tier-2 carriers in North America.
- Profitability was cited for Hong Kong Broadband Networks and Lyse Tele in Norway, based on their FTTx operations.
While we note these positive indicators, we are still awaiting the tipping point which makes FTTH the compelling access technology.
South Korea and Japan markets driving ubiquity and services
South Korea and Japan have double-digit household penetration rates and are on target to saturation levels by 2013. Their focal point is shifting to ensuring high connectivity and low, technology-agnostic access barriers to services. Korea Telecoms Korea U-City presentation illustrated the vision in South Korea, while NTT in Japan is launching LTE and expanding its next-generation network to support more users at higher bandwidths.
The high bandwidth required by TV continues to be the killer application for FTTH. The 3DTV demonstration by Olleh KT and the South Korean cable-TV operator CJ HelloVision were of high quality, helping pave the way to high acceptance levels.
NTTs Next Generation Services Joint Development Forum serves as an example for nurturing emerging services and how to fast track them to commercialization. The forum is an incubator for marketing and technology consulting. It provides NGN test beds, value-added interfaces, and supports the development of new services on its network.
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