FEATURE FIBRE TO THE HOME
(and three smaller regional infrastructure players) to invest massively in FTTH deployment. As of today, 570 000 homes in New Zealand are open for UFB service, around 43 per cent of the 2019 target. Only 69 000 homes have subscribed so far but the growth in subscriptions is extremely fast. Australia also set off down the path of
structural separation to get fibre deployed, but its methods were rather more complex and convoluted, partly due to the entrenched power of incumbent Telstra and partly due to politics. As a consequence the creation and early years of government-owned broadband infrastructure provider NBN Co were rather tumultuous: it
Benoît Felten, founder of Diffraction Analysis
had been the norm for some years before fibre came onto the scene. Neither did these countries follow the Japanese or South Korean models of subsidising the incumbents to boost deployment. Rather, in three of these countries the core issue was understood to be that fibre infrastructure would be a natural monopoly in most of the territory and the market should therefore be structurally separated to avoid abuse.
New structures for more fibre Singapore led the way, shiſting the market structure for FTTH to three layers: a passive (dark fibre) layer now owned by the incumbent Singtel, an active (wholesale) layer owned by the cable operator Starhub, and numerous retail providers on top. Tis has allowed Singapore to deploy FTTH in its territory very fast. Coverage is now close to 100 per cent and Singapore focuses on making fibre available for resale in street cabinets to enable smart city applications. Te market structure is still being discussed, particularly the rationale of maintaining two layers at the bottom of the stack, but so far the model has worked reasonably well (although the small scale and high density of Singapore avoid some of the challenges faced elsewhere). New Zealand went for a more formal sort of
structural separation as part of the government’s Ultra Fast Broadband (UFB) fibre plan. By offering subsidies for fibre deployment only to companies that had no capitalistic ties with retail providers in the market, the government strongly encouraged the separation of the incumbent. Now two companies, Chorus (infrastructure) and Spark (services), this has allowed Chorus
30 FIBRE SYSTEMS Issue 7 • Spring 2015
Telekom Indonesia has been pulling out the copper and selling it on the hungry raw materials markets
took a long-time for NBN Co to negotiate a deal for access to its infrastructure that Telstra would accept, then NBN Co struggled with sub- contractor management and delays. Finally, the government change in 2013 led to a radical redesign of the scheme. Te new plan in place since the latest government change in Australia has significantly altered the approach and downplayed the importance of FTTH in the country’s broadband development. Considering
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the project’s history, it would be prudent to wait and see if it bears fruit.
Conclusion Te common thread to be found in these diverse examples is that some form of government intervention has spurred fibre development wherever it has occurred. But the similarities end there. By and large, the opportunity for emerging
markets seems to lie in their general lack of telecom infrastructure, copper or fibre. Huge parts of the territory in these countries currently don’t have broadband and existing copper infrastructure is rarely of a high-enough quality for short-term DSL-based options to be viable. As a consequence, if these countries want the economic development that comes with decent broadband, fibre is the only route open to them. Existing market structures in emerging
economies make government intervention comparatively easier than in developed economies, hence the interest of governments in the area of FTTH. In developed economies the paths to fibre are different because government intervention is a more sensitive topic and requires certain forms to be respected. It seems to go either through subsidies for infrastructure replacement for the earlier players or, more recently, through structural changes in the market. However, if the story of fibre in Asia-Pacific
tells us anything, it’s that there is no one way to achieve next-generation access deployment.l
Benoît Felten is founder and chief research officer at Diffraction Analysis based in Shanghai, China.
www.diffractionanalysis.com
Jakarta will host the FTTH Conference Asia-Pacific in May 2015
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