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FTTH Council Asia Pacific: Fttx Trends - 16 Country Review

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FTTH Council Asia Pacific: Fttx Trends - 16 Country Review FTTH Council Asia Pacific: FTTx trends - 16 country review February 2014 Julie Kunstler Principal Analyst [email protected] 1 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Table of Contents Section Page Section Page Methodology 3 Malaysia 84 Project Deliverables 4 New Zealand 92 Australia 5 Pakistan 106 Bangladesh 18 Philippines 118 China 27 Singapore 133 Hong Kong 37 South Korea 145 India 47 Taiwan 154 Indonesia 62 Thailand 169 Japan 75 Vietnam 182 2 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Ovum’s Methodology Ovum conducted an independent assessment and analysis on broadband deployments with specific focus on FTTH activity in the Asia Pacific region, focusing on 16 countries: Australia, Bangladesh, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. We analyzed information on the FTTH subscriber bases in each country. We developed FTTH subscriber forecasts based on deployment and investment plans and realistic implementation schedules. We also studied other types of wireline access in each country. We gathered information concerning along FTTH regulatory issues and announcements for each country. Information was gathered from reports, announcements, press releases and interviews provided by regulatory agencies, other government agencies, communications service providers, vendors and investment groups. We have developed opinions on the drivers and inhibitors of FTTH in each country as reflected in our FTTH and household penetration forecasts. We have also developed forecasts for other types of wireline broadband including DSL and cable modem. In addition, we gathered basic information concerning LTE and WiMAX for selected countries. Broadband wireless is becoming a stronger and stronger driver for the use of fiber-based (including FTTH) mobile data backhaul solutions. 3 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Ovum’s project deliverables Our deliverables include: Detailed excel workbook containing: Wireline broadband subscriber actuals and forecasts for FTTH, DSL and cable modem each country from 2011 t0 2017. Wireline household penetration actuals and forecasts for FTTH, DSL and cable modems for each country for 2011 to 2017. Summary tables and graphs for the Asia Pacific region including ranking of countries by FTTH subscriber base and household penetration for 2013 and forecasts for 2017. Presentation of FTTH subscribers, forecasts and household penetration to be shared with the FTTH Councils around the world and used at the upcoming FTTH Council Europe Conference. Detailed presentation (approximately 200 slides) of FTTH market activities in each country. Detailed presentation of the FTTH Asia Pacific market, including subscribers, subscriber forecasts, drivers, challenges and technologies, at the upcoming FTTH Council Asia Pacific Conference. In addition, this presentation will also discuss new revenue opportunities for service providers based on FTTH networks. Note: Service providers and regulators in different countries each have their own definition of broadband. Consequently, there is little consistency between service providers and regulators within a country, let alone across countries. 4 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Australia 5 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Australia Profile General Information Estimated Population – 22.3 million Urban – 89% Estimated Households – 8.8 million Wireline Broadband Connections – 6.0 million Wireline Broadband Penetration by Household – 67.5% DSL – 54.9% Cable – 10.8% FTTH – 1.8% 6 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Broadband Overview Broadband subscriber in Australia grew by 4.6% to reach 12.1 million in June 2013 compared to 11.6 million in June 2012. Approximately 78% of these broadband subscribers were household users and the remaining 22% comprised of corporate and government customers. Fiber was the fastest growing Internet access technology, which increased by 26% to reach 115,000 connections in June 2013. Trend in broadband access technology Subscribers (‘000) Speed June 2012 December 2012 June 2013 DSL 4,632 4,727 4,787 Cable 917 918 934 Fiber 52 91 115 Satellite 94 92 93 Fixed Wireless 30 49 49 Mobile Wireless 5,862 5,995 6,150 Other broadband 10 7 3 Total broadband 11,597 11,897 12,131 * Subscribers with dial-up connections are not considered here. 7 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Australia - Broadband Overview Demand for high speed broadband data has been increasing over the past few years in Australia. Volume of data downloaded by broadband connection increased by 58.5% to reach 657,262 Terabyte in June 2013 as compared to 414,537 Terabyte in June 2012. As of June 2013, the download speed with the highest proportion of subscribers was in the 8Mbps – 24Mbps range. Trend of high speed broadband demand Subscribers (000s) Speed June 2012 December 2012 June 2013 256 Kbps –1.5 Mbps 980 609 394 1.5 Mbps –8 Mbps 5,067 4,212 3,970 8 Mbps –24 Mbps 4,094 5,406 5,976 24 Mbps or above 1,458 1,645 1.785 Total 11,600 11,873 12,126 * Subscribers with speeds less than 256kbps are not considered here. 8 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Australia – FTTx Status (1/5) National Broadband Network (NBN) National broadband network is Australia’s national wholesale only, open access communications network that is being built to provide high speed broadband service by leveraging the three types of technology fiber, fixed wireless and satellite, depending on location. NBN Co, a government-owned corporation, was established in 2009 to design, build and operate the high speed national broadband network. First trial rollout of national broadband network started in Tasmania in July 2010 and first NBN services went live in Armidale in May 2011 with a coverage of 2,900 premises. NBN Co signed an agreement worth A$9 billion with Telstra to access its infrastructure for a period of 35 years. As per the agreement, Telstra proposed to disconnect its copper, co-Axial and fiber broadband subscribers and slowly migrate to NBN network. A similar kind of agreement was signed between Optus and NBN Co for approximately A$800 million where Optus will shift its HFC customers on NBN network. In December 2010, the corporate plan 2011- 2013 was prepared and key objectives and targets were set for NBN Co. This corporate plan was replaced by a new corporate plan 2012-15 which was prepared in August 2012. 9 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Australia – FTTx Status (2/5) National Broadband Network (NBN) Corporate plan 2012-2015 targets - • Complete the transit network in FY2015 with deployment of dark fiber connectivity, 121 Points, of Interconnect (PoIs) and more than 650 Fiber Access Nodes (FANs).Remaining FANs, more than 400 to be built over the FY2016 – FY2021period. • Deploy 206,000km of Gigabit-capable Passive Optical Network (GPON) by FY2021. • Spend A$37.4 billion as capex for development and maintenance of broadband network by June 2021. • Pass 12.2 million premises by fiber and 1 million premises by fixed wireless & satellite by FY2021. • Connect 8.5 million premises by fiber and 0.2 million premises by fixed wireless & satellite by FY2021. • Launch two satellites with commercial operations starting in mid-2015. • Implement Telstra definitive agreement and Optus HFC agreement. 10 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Australia – FTTx Status (3/5) Strategic review outcomes In September 2013, Federal Election was held in Australia and the subsequent change in the government from Labor to the Liberal National Coalition prompted a strategic review of national broadband network. The strategic review found that: • The rollout will miss its forecast completion date by three years, which will finish in June 2024 instead of December 2021. • NBN plan might require funding of A$73 billion (an additional A$29 billion) compared to A$44 billion in the current 2012–2015 corporate plan. • It may require more than A$19 billion of additional capex i.e. A$56 billion compared to A$37 billion in 2012– 2015 corporate plan. • In the current NBN Corporate plan, revenues are overestimated by $13 billion through 2021. • Continuation of NBN will require a cumulative increase in opex of more than $5bn until the new network completion date of 2024. • Generate a much lower IRR, 2.5% versus 7.1%. 11 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Australia – FTTx Status (4/5) Strategic review – Rollout status 12 © Copyright Ovum. All rights reserved. Ovum is part of the Datamonitor Group. Australia – FTTx Status (5/5) Strategic review - Recommendations NBN Co has suggested an alternative to use optimized “Multi-Technology Mix” (MTM) for faster rollout. The Optimized Multi-Technology Mix scenario will result in the following outcomes according to NBN Co.: • Faster roll out of NBN by choosing the most economically efficient technology depending on various regions. • The MTM scenario will require funding of A$41 billion, i.e. A$32 billion less compared to A$73 billion of old NBN. • About 91% of premises in the fixed-line footprint can have access to download rates of at least 50Mbps by 2019 and 98%-100% premises with 25Mbps by 2020. • Uplift of the revenues leading to cumulative revenues of around A$18 billion over FY2011-21. A multi-technology approach would deploy FTTP, FTTN, FTTB/DP and HFC in addition to fixed wireless and satellite. The plan envisions a split of 26% FTTP, 44 % FTTN and 30% HFC. 2014 update: By June 2014, the rollout is expected to pass a total of only 357,000 brownfields premises with fiber, against a target of 1.129 million as set out in the August 2012 corporate plan.
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