FTTH Rollout in Rural areas: Make it possible

Contents• FTTx Watch Service : Presentation• FTTx Worldwide Status & Strategies• FTTH Rollout in Rural Areas: Study cases• How make FTTH possible in Rural areas?Stop by and see us… …or follow us on:IDATE, DigiWorld, DigiWorld Institute and DigiWorld Yearbook are international trademarks of IDATE Copyright © IDATE 2012

FTTx Watch Service : PresentationOur FTTx Watch Service is specifically designed to provide operators, vendors,government bodies and regulators with a comprehensive and continuous analysisof the issues that impact the markets: The service is organized around the following deliverables & services: • Database: a unique, permanently updated market database, providing market data by country and by technology as well as forecasts by 2016 • Insights: monthly views on key issues • Analysts Access: consulting hours, analyst briefs, presentations. 3 Copyright © IDATE 2012

FTTH/B Global Picture: APAC Strong leadership FTTH/B subs worldwide from June 2010 … FTTx means FTTH/FTTB, FTTN+VDSL,TTLA, FTTx+LAN 6.7 M 6M 0.25 M 30.7 M Global FTTx market: 112 M subscribers at June 2011, 61% being FTTH/B• Asia is still the leading market … to June 2011 (73% of worldwide FTTH/B subscribers at June 2011)• Europe, including Russia, is progressing, in particular thanks 10.2 M to Eastern countries (~ 15% of 7.3 M worldwide FTTH/B subscribers at June 2011) ~ 0.4 M 49.5 M• USA: a little slow down in deployment from telcos in 1H11, but acceleration from local <0.3 M authorities due to the Stimulus BB program awards• LATAM and Middle East potential Source: IDATE5 Copyright © IDATE 2012

FTTH/B Global Picture: APAC Strong leadership Top 10 FTTx players worldwide at June 2011 Rank Player Country Technology & architecture FTTx subscribers 1 China Telecom (*) China FTTH & FTTx/LAN EPON LAN/DSL 22 000 000 2 China Unicom (**) China FTTH/B GEPON/EPON & FTTx/LAN 16 000 000 3 NTT Japan FTTH/B GEPON 15 426 000 4 China Mobile (***) China FTTH/B GEPON/EPON & FTTx/LAN 6 800 000 5 KT South Korea FTTB EPON/GEPON 5 380 000 6 Verizon USA FTTH BPON/GPON 4 478 000 7 AT&T USA FTTN/VDSL2 4 100 000 8 ER Telecom Russia FTTB 3 200 000 9 Chunghwa Telecom Taiwan FTTB GEPON 2 197 000 10 KDDI Japan FTTH/B EPON/GEPON 1 867 000 (*) Among which 7 million FTTH/B subscribers and 13 million FTTx/LAN subscribers (**) Among which 5.5 million FTTB subscribers and 9.5 million FTTx/LAN subscribers Source: IDATE 7 Asian telcos among the 10 leading players worldwide 2 Chinese operators leading the ranking! 1 Operator from Russia6 Copyright © IDATE 2012

FTTH: Worldwide Status & Strategies: leadersJapan: the FTTH leader • More new FTTH/B subscribers than new DSL subscribers since April 2005 • Nearly 20.8 Million FTTH/B subscribers at June 2011 and 46 Million Homes Passed... 1 million new FTTH subscribers last 6 months …. Nearly 40% are FTTB subs • At June 2011, FTTH/B subscribers represent 60% of total Broadband subscribers and more than 90% of the population is already covered! • Attractive prices, closing the gap with ADSL tariffs… aerial deployments • Government’s proactive approach to FTTH deployments: 30 million FTTH subscribers in 2010 as a ambitious initial objective…objective revised in November 2007 at 20 Million FTTH subscribers in 2010…has been reached! • But not specific services…. ….with a few IPTV subscribers in Japan (probably around than 1.5 million)8 Copyright © IDATE 2012

FTTH: Worldwide Status & Strategies: leadersUSA: FTTH is the unique solution for RBOC’s • Power of Cable operators: Time Warner, Comcast, launching 30 or 50 Mbps offers • CableVision proposing a 101 Mbps offer … more than twice what Verizons much- touted FiOS offers (50/20 Mbps) • At June 2011, Verizon has nearly signed 4.5 Million FiOS FTTH subscribers and has about 3.8 Million FiOS TV subscribers • At June 2011, the FiOS network on commitment to pass 18 million premises (15.7 passed to date) or approximately 60 percent of total households in areas currently covered by Verizon’s wireline network (objective is to reach 70%) • Initial Target: 18 million homes passed by 2010, has not been reached …Now LTE is being deployed • AT&T (FTTN oriented) and Verizon launched Fibre access for delivering HDTV & Triple Play • Churn is very low for FiOS TV Subscribers: around 1% • 2Q11: FiOS ARPU ~ $1509 Copyright © IDATE 2012

FTTH: Worldwide Status & Strategies: leaders USA: FiOS TV Packaging & Pricing – Example FiOS TV plans (April 2011) Source: Verizon – April 2011 Verizon claims now to be the 6th largest cable operator in the USA10 Copyright © IDATE 2012

ARGE Glasfaser Waldviertel: Austria (1/2)A trio of small villages in the northeast of Austria have installed acommunity-owned FTTH network • The story begins in 2003 when community leaders recognized that they had a problem of high unemployment and a declining population. • The incumbent, Austria Telecom, was not planning to serve such small communities even with ADSL, so the mayors decided to take matters into their own hands by laying fibre-optic cable to every property. Installation begun in 2005 and was achieved in 2011. • Thus ARGE Glasfaser Waldviertel was created, which translates as “Forest Quarter Fibre Co-operative”. Each municipality owns its own duct and dark fibre, but by working together the 3 towns have been able to share knowledge, experiences and gain economies of scale. • The project was able to take advantage of planned work on the sewage system to install ducts for a fibre network in the same trench as the new sewer pipes. • The total cost of the network is under €1 million and other nearby villages are interested in connecting to the network. Local farmers helped to lay more fibre between the 3 towns so that the three communities could network with each other. • Today the fibre network passes more than 1,650 homes and small businesses, of which around 400 are receiving services over the network (end 2011 figures). • Technology is Active Ethernet with 4 virtual LANs per customer. As national ISPs weren’t interested in doing business because of the small number of subs., the 3 munis joined forces with a regional ISP called WVNET to form an independent company that now operates on the network and offers broadband, VOIP services and IPTV. 12 Copyright © IDATE 2012

ARGE Glasfaser Waldviertel: Austria (2/2)A trio of small villages in the northeast of Austria have installed acommunity-owned FTTH network • Main challenge is to get a reasonably priced high speed due to necessary connection to the internet exchange. • Suddenly, after the first FTTH customers were connected, Telekom Austria decided to bring ADSL to the villages of the region, and a small wireless ISP (EVN) owned by the power utility company started offering services locally. • “The interesting thing was that a lot of the people in the municipalities said ‘It’s nice that Telekom Austria and EVN suddenly come and offer us something, but we are no longer interested because we have our own network’,” said Peter Höbarth, Mayor of St. Martin. 13 Source: FTTH Council Europe Copyright © IDATE 2012

Oberhausen: GermanyThanks to exemplary Public Private Partnership, Bavarian municipalitybuilds its own FTTH network – Unser Ortsnetz-Oberhausen (our LocalNetwork) • The poorly connected municipality of Oberhausen was not satisfied with the offer from Deutsche Telekom and Kabel Deutschland and then decided to act. • In June 2009, the town council decided to make a European-wide call for tender for the deployment of an FTTH network with data rates of at least 50 Mbps for all households. The tender specification required non-discriminatory and technology neutral access to the network for third parties, as well as a detailed financial model. • A precondition for starting the deployment was a minimum take rate of 75% for these 1,150 households of the village. About 70 inhabitants from the village committed themselves to promote FTTH services. • About €4 million was financed by Raiffeisenbank • Ehekirchen-Oberhausen, a co-operative bank, • to set up a Public Private Partnership. • Out of a total of 1,150 homes passed • 1050 are connected to FTTH in Oberhausen 14 Source: FTTH Council Europe Copyright © IDATE 2012

Public Bodies are key for small rural FTTH Projects► In Europe, municipalities and power companies are still the main type of player involved in FTTH/B rollouts, in terms of the number of projects – accounting for 49% of deployments at the end of 2009► Local authorities can use several forms of leverage in particular to enable FTTH deployments • The first solution, which is aimed at reducing the civil engineering costs of an FTTH network rollout, consists of using existing infrastructure and cable paths that fall under the local authority’s responsibility. • When a local authority has a specific broadband or FTTH rollout strategy in place, it can even deploy active or passive FTTH infrastructure itself, using an open access model: either directly or through an intermediary, which could be a power company or a housing company under its control • The Local Bodies can act as an aggregator of demand (Public sites, Consumers, Enterprises) as well as a prime negotiator for financing plan under PPP approach► Challenges ahead for Local Bodies • Challenge could be either intrinsic to the local authority as the result of reactions from existing telecom carriers or cable companies, or even be due to state legislation – as is often the case in the US. • Some public power companies that elected to go into the business of supplying FTTH access underestimated the difficulties of the profession, and their initiative ended in failure (e.g. Dong Energy in Denmark). 16 Copyright © IDATE 2012

About usFounded in 1977, IDATE has gained a reputation as a leader in tracking telecom,Internet and media markets, thanks to the skills of our teams of specializedanalysts.Now, with the support of close to 40 member companies – which include many of thedigital economy’s most influential players – the newly rebranded DigiWorld Institute hasentered into a new stage of its development, structured around three main areas ofactivity: Business units Telecoms Strategies Internet TV & digital Regional Content development IDATE Consulting IDATE Research DigiWorld Institute• Time-tested analysis and consultancy Our expertise and client list > Consulting• An independent observatory Our catalogue of reports > Research• A European forum open on the world Our annual programme > DigiWorld Institute17 Copyright © IDATE 2012

FTTH Rollout in Rural areas: Make it possible

by DigiWorld by IDATE on Mar 30, 2012

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FTTH Rollout in Rural areas: Make it possible Presentation Transcript