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The many paths of Asian fibre
The most prominent examples of FTTH deployment in the Asia Pacific region aren’t necessarily the most instructive. Benoît Felten explains why
E
ver since the emergence of fibre-to-the- home (FTTH) in the early 2000s, the world has looked towards Asia for leadership. To be perfectly fair, it hasn’t
exactly found the encouragement it was looking for and ultimately the early Asian examples haven’t inspired copycat deployment elsewhere. But there is a new wave of Asian fibre deployments – both in developed and in emerging markets – that may well inspire other nations as we move forward.
Unfollowed leaders Japan and South Korea were the front runners of FTTH deployment (or more appropriately fibre-to-the-building in most instances) and to a large extent they still are the world leaders in terms of both deployment and adoption (the latter at least applies to Korea, the Japanese story is a little less rosy). Part of the appeal for fibre in these countries
– certainly in South Korea – is that the technology choice made at the time let service providers leapfrog DSL altogether. In other words, the development of broadband and the appeal of the Internet as a resource occurred more or less simultaneously, and broadband was indistinguishable from the fact that it was delivered with fibre. Te benefits have been many in both
countries, but not always where one might expect them. NTT in Japan benefited by reconquering a large part of the access market with fibre: whereas it was facing heavy competition via unbundled copper, it refocused most of its wholesale offerings on active fibre resale, therefore recapturing part of the lost value in the broadband market. In South Korea, due in large part to restrictive
policies that prevented services from being bundled with access (that were overturned quite late in the market’s development), most of the
28 FIBRE SYSTEMS Issue 7 • Spring 2015
service value was not captured by the fibre- deploying service providers, although they are now catching up. Sceptics in the west like to point at the fact that
service providers in both countries don’t seem to have been made massively rich from the deployment of fibre, but this misses the broader point: both countries’ superior broadband platforms have fostered the emergence of online giants in gaming, social networking and various other service fields. Examples include Korean mobile messaging company Kakao and e-commerce giant Rakuten from Japan. Te next wave is likely to be in healthcare, education and more serious endeavours than what has been seen so far. With close to ubiquitous coverage, thanks to
state encouragement in various forms (policy, loans, political will), you would expect both countries to have leveraged their advance and success internationally, but that isn’t really the case. Sure, some equipment vendors, especially around passive components, have market presence in Asia, but by and large the proprietary nature of the technologies (and insular culture of the players) used for fibre-to-the-premises (FTTP) deployment in Japan and South Korea has hampered the ability of the pioneer vendors to make a dent in the worldwide market. In other words, while Japan and South Korea
are still world leaders when it comes to FTTP deployment and adoption, they are largely unfollowed.
Emerging markets Instead, the models that seem to be emerging in the Asia-Pacific region are those that offer developmental opportunities in markets where for a long time it was considered that mobile broadband would be the only form of widely deployed Internet access. China leads the way, and is not only the world
leader in deployments today, but it is expected to stay that way more or less forever. Te Chinese deployment model is largely a combination of its urban development policy and its political structure. Incumbent operators are state owned and, while they compete in mobile, they don’t (yet) do so in fixed access. As a consequence, fixed broadband has always been a local monopoly. When the government decides that deploying fibre would be good for the country’s development, the operators obey and deploy. Tat’s not to say that financial and return-on- investment considerations don’t exist, but they are secondary to the political goal. In addition, the vertical development of
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Chinese cities with massive numbers of small dwellings in a single building block makes copper-based infrastructure impractical: one copper line per subscriber leads to massive, heavy copper bundles that are costly to deploy and maintain. As a consequence, point-to- multipoint fibre is the technology of choice for broadband deployment, which largely explains the massive deployments seen over the last few years. China currently has more than 40 million FTTB subscribers and coverage is estimated to reach 200 million homes by the end of 2015 with subscriptions targeted at 70 million (but likely to fall a little short of that). Unlike Japan and South Korea, the Chinese
FTTH equipment vendors by embracing international standards, have managed to exploit their in-country experience elsewhere in the region, and have expanded into Europe, Africa and Latin America. Huawei and ZTE are the most notable examples. And while deployments in Asia-Pacific’s other emerging markets are not necessarily copycat approaches to the Chinese model, they are undoubtedly influenced by the Chinese vendors. Te most advanced of these are Malaysia and Indonesia, both with very interesting models
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