Ftth in china

Feature Articles: Optical Fiber Communications

FTTH in China

Wang Jianli
Deputy CTO, Fiberhome Technologies Group, Wuhan, China

ABSTRACT current broadband access status in China is provided
to help to understand the great potential in FTTH
This paper provides current status and future trends growth in the future; In Section 3, the driving forces
of FTTH in mainland of China. It discusses current for FTTH are analyzed; Section 4 provides current
FTTH research, development and deployment status status and latest activities in FTTH research,
in China, including technology choices, deployment development, and deployment; different FTTH tech-
considerations, major equipment vendors and carriers, nologies are analyzed in Section 5 according to
standardizations, market barriers and opportunities. service and application requirements; the major FTTH
Key words: FTTH, market, China players and products are presented in Section 6; In
spite of all the progress made in the last two years,
there are still a lot of challenges to face, which are
I. INTRODUCTION
discussed in Section 7; while there are a number of
barriers to overcome for FTTH, there are also some
In the last a few years, China has seen a rapid growth
opportunities, which are discussed in Section 8 to-
in broadband access. With the increasing require-
gether with some proposed strategies. The paper is
ments for bandwidth by new applications, fiber to the
summarized in Section 9.
home (FTTH) has been drawing attention of both
research and industry in China since Nov 2003 when
a number of Chinese experts started the latest II. CURRENT STATUS OF
FTTH wave in China at the APOC 2003. Since BROADBAND ACCESS
then, a great progress has been made in FTTH
research, development and deployment. This paper In the last a few years, the number of Internet
is to provide a general view about the FTTH in subscribers in China grew very fast. By March 2005,
China. China had 73.45 Million Internet users. Among
FTTH means differently by different people. ITU- them, 28.33 Million are broadband users, 95% in-
T defines FTTH as fiber to the household, where no crease over 2004, and 8 times of that in 2002,
copper between Central Office (CO) and household. accounting for 38.6% of all Internet users. In spite of
While in the definition by FCC of the United States, the growth of broadband users, dial-up is still the
FTTH includes both household and small business. dominating access solution in China, accounting for
In this paper, we define FTTH as to include single 61.3%. A small number of subscribers also use
household, small business and multi-dwelling apart- leased line for Internet access. In comparison, in
ment building. March 2004, the dial-up users accounted for 79.5%,
This paper is organized as follows: in Section 2, broadband 20.4%. We can see a great growth in

China Communications December 2005 89


broadband access in 2004. It is forecasted that China's fee is about $12 per subscriber. In China, the de-
broadband users will reach 144 million by 2007. ployed DSL so far are all ADSL. In late 2004,
Those broadband users are potential FTTH subscrib- ADSL2+ products became mature and were tested
ers because they have experience what broadband by service providers. The massive deployment of
can bring to them. ADSL2+ is expected to start late 2005. China al-
ready has mature VDSL products, but we have not
2.1 Access service requirements seen urgent deployment requirement because
ADSL2+ is able to provide high bandwidth and
To understand fiber access in China, we need to
therefore will delay VDSL deployment or even make
understand the service requirements of different type
VDSL deployment unnecessary.
of subscribers. In China, the access users can be
Ethernet is another important access technology in
divided into three major categories according to their
China. With this approach, fiber from central office
service requirements.
reaches a point close to residential area or a building,
Large corporations: this category includes head
called optical drop. From this optical drop a LAN
quarters of large corporations, large government
leads to each home or office. With this approach,
departments, universities, financial institutes,
each home or office usually has FE interface.
media, hotel, business building, etc. This type of
Another major category of access technology in
users usually has large-sized private network
China is broadband fixed wireless (BFW). There are
and has high requirement for network availability,
three types of BFW deployed. WLAN based on 2.4
security and quality of service. The major access
GHZ is the most promising fixed wireless technol-
services required by this type of users are vari
ogy in China. 3.5Ghz is another promising
ous leased line services.
technology, while 5.8G deployments has just started.
Medium and small-sized enterprises: this type of
In addition to above broadband access technologies,
users has a relatively wide range in access net
cable modem also has some market share. PLC has
work capacity. The services they need include
a very small market in China. So far the optical
DSL, DDN, FTTx+LAN, dial-up and ISDN.
access is mainly FTTB and FTTC. In China about
The line speed is from a few ten k , 512k, 1M, 2M
90% of business buildings have fiber drops. Some
to 10/100 M.
residential communities also have fiber drops.
Residential users: for this type of users, the major
services are voice and Internet access. These
users are more caring about simplicity, plug and III. DRIVING FORCES OF FTTH
play, and cost. The major access approaches
include dial-up and DSL. In terms of FTTH driving forces, China is not differ-
ent from the rest of the world. There are five major
2.2 Technologies forces that are driving FTTH research, development
and deployment in China.
According to above access users categorization, the
major broadband access technologies include ADSL,
3.1 Increased bandwidth demands
LAN, broadband fixed wireless (BFW), etc.
In China, ADSL has been dominating access The most important driving force for FTTO and
market. The line speed of ADSL is from 512K to 2M. FTTH is that more and more broadband applications
But most subscribers are using 512k and 1M. The need more bandwidth. In the last a few years, China's
equipment price has been dropped dramatically in broadband access grows very rapidly. The increas-
the last a few years. Now the central office equip- ing rate is about 200% every year. In addition to the
ment price is around $40 per subscriber. The monthly old applications such as web surfing, email, and file

90 China Communications December 2005


downloading, many new applications and services 10 provinces in Northern China. China telecom
have been become popular. Examples include online owns local network resource in the rest part of
gaming, IPVOD, and videophone. Those applica- country mainly in Southern China, For the 10
tions need much more bandwidth. provinces in Northern China, China Telecom
Another important application is broadcasting TV. needs to find another approach to provide local
China has launched a national TV digitalization access services to compete with ADSL pro
program. The goal is to stop analog TV nation-wide vided by local carriers. Vice versa, China
by year 2015. Currently, the TV programs are deliv- Netcom needs to do the same thing in Southern
ered by a separate network operated by CATV, China. Other carriers including China Unicom
however, the nation is promoting convergence of and China Mobile almost have no local network
CATV network, PSTN network and the Internet, facilities and also need FTTH for competition.
especially for the access portion, to realize triple- For local carriers to bypass residential ser
play. With HDTV, the bandwidth requirement is vice providers
even higher. The bandwidth need for a typical family
In 2001, China started a trial program to open
is estimated to be around 100Mbps. With that amount
access network to residential service providers.
of bandwidth, none of the current available broad-
With this trial, a new model, known as "Tailong
band access technologies is able to meet the needs.
Model" in China, emerged. With this model, a
new type of service provider, residential net
3.1 Reduced system cost
work service provider, owns residential net
Another important driving force for FTTH is the cost work facilities and is able to connect to any
of optical-electronic components reduced dramati- local carrier's network according to residents'
cally thanks to technology advancement. In the past choice. In order to bypass the residential service
a few years, almost all the optical components used provider's network, local service provider pre
for FTTH saw a great drop in cost. Fiber is now about fers to have their fiber reached each home
$16 per kilometer and optical transceiver at 1000M directly. FTTH is one way to that end.
is about $80 per unit. The cost of Ethernet card,
For telecos and CATV providers to
passive optical component, etc keeps dropping every
compete for data access
month. Reduced system cost makes FTTH and FTTO
economically acceptable. Currently CATV providers are not allowed to
provide telephone services and Telecos not
3.2 Competition allowed to provide CATV services, but both are
allowed to provide Internet services. Chinese
Competition is usually a driving force for applica- government is working on the regulations for
tion of any new technologies and there is no excep- CATV n e t w o r k a n d t e l e c o m n e t work.
tion for FTTH. In China, FTTH is widely accepted as Convergence. Now it is very important to own
the dominating broadband access technology in the access facilities so that it will likely own the
future. Although there is no urgent immediate de- subscribers in the future. Although the final
ployment needs, most carriers and service providers goal is for the subscriber to freely access to any
are active to promote FTTH because they have service provider's network they want, but in a
realized that sooner or later FTTH will take off and certain period of time, the access network and
they need to occupy the territory. This competition the local service will be in monopoly.
can be seen in the following aspects:
3.3 Market
For CLECs to compete with ILECs
China Netcom owns local network resources in FTTH has a huge market. It is not only for the FTTH



system and equipment, but also the devices, 4.2 FTTH products
accessories, manufacturing, and services. Assuming
100 million FTTH subscribers within 5 years, it is The very first FTTH system was developed in 2001
estimated that China's average FTTH annual market in China by Fiberhome Technologies Group as part
is between $30 - 40 billion. of the effort of the national 863 APON plan. Now
there are a number of FTTH equipment vendors.
3.4 Regulatory Fiberhome ranks number one with most advanced
technology and richest functionalities. Other local
In many cases, new technology promotion needs vendors include UTStar, Greenwill, Fohope, Huawei
encouragement from government's regulation. So and ZTE.
far, Chinese regulation is not favorable for network Up to now, most local vendors focus on EPON
convergence and therefore not for FTTH. But some system and point-to-point system. GPON system is
local government is considering of setting rules to under consideration by some vendors, but none has
promote FTTH deployment. For example, new-built mature products yet. There is only one WEPON
house or apartment must have fiber deployed. Those vendor, Fohope. The FTTH products can be basi-
rules will help to promote FTTH deployment. cally divided into three categories according to their
capability of service support. First category is that
can only support data service, such as Fiberhome's
IV. CURRENT FTTH STATUS IN CHINA 100M EPON and 1000M EPON, UTStar's 1000M
EPON, etc. This type of FTTH system can only
In APOC 2003 held in Wuhan, many Chinese telecom provide Internet access. The second category can
experts discussed FTTH in China for the first time in only support data interface and CATV interface by
the last a few years. The topics include FTTH oppor- using a separate wavelength. Those products include
tunities and challenges, FTTH applications, FTTH Fiberhome's point-to-point FTTH system and Fohope
network architecture, cost analysis, etc. That forum WEPON system. The third category is real triple
attracted a lot of attention of China's telecom com- play, using three wavelengths to support all data,
munity and become a starting point for this new TDM/voice and analog or digital CATV services.
FTTH wave. All above products are mature and have deployed in
a number of field trials and commercial deployments.
4.1 National FTTH research plan
4.3 Field trials and commercial networks
FTTH research activities in China actually started in
1999 when China launched FTTH research and Since 2002, there have been a number of field trials
in China. Wuhan Changfei FTTH project in 2003
development program to study key technologies of
was to demonstrate the feasibility of various FTTH
FTTH and develop FTTH systems. The first research
systems. The project consists of three building with
program is a national "863" hi-tech program called
87 homes. The equipment vendors include
APON. That program completed in 2001. Another
Fiberhome, Optical Solutions, Fohope Networks,
similar state "863" hi-tech program on EPON started
Salira, and Wave 7. The FTTH systems deployed
in 2001 and completed in 2003. A number of organi-
include 100M EPON, 100M P2P, and WEPON. The
zations with Fiberhome Telecom as the leader took services provided include Internet and CATV. The
part in those two programs, the results are positive. service is provided by Wuhan Telecom. This project
In China's "eleventh five years plan" period, many concludes that (1) FTTH products are mature to be
proposals have suggested FTTH as one of the major commercially deployed; (2) the cost of the FTTH is
area for government financial support. still very high in comparison with ADSL. Another



field trial in 2003 is Chengdu FTTH project by FTTH network deployed and commercially oper-
Chengdu Tailong, the only residential service pro- ated by China Netcom in Beijing. It provides triple-
vider in China. The project is designed to provide play with GEPON system from Fiberhome. The
triple play through a single fiber. The total number of project was completed and started commercial op-
homes covered by this project is about 4000. The eration in July 2005. In addition to above, a bigger
equipment vendors include Fiberhome, etc. Currently, FTTH project has been planned. It is an FTTH/
the service providers connected to this residential FTTO network for combined residential and busi-
FTTH network include China Telecom and China ness district. The district occupies about 7 square
Railcom. In addition to above two, there are more kilometers with a population of 160,000. The dis-
than 30 other field trials all over the country to study trict will use FTTH and FTTO for all the home and
the business model and network operation and
business access.
maintenance.
The first FTTH equipment testing by Carrier was 4.4 Standardization
completed in Dec 2004 by Beijing Netcom. There
were five FTTH equipment vendors participated in With the progress made in FTTH research, develop-
the test: Fiberhome, UTStar, ZTE, Huanwei and ment and deployment, China started FTTH
Gaohong. The equipment tested is GEPON and the standardization. CCSA has just stared an FTTH
result is positive. Among the five vendors, Fiberhome standard task with Fiberhome as the primary task
is much more advanced in system functionally and taker. There are also two local government level
performance, especially in multi-service support. FTTH standard programs on going, one in Wuhan
The result shows that the FTTH technology and and the other in Hangzhou.
products in China are mature for commercial There is also an FTTH forum in China to promote
deployment. Beijing Netcom has also completed an FTTH technology and deployment. The forum was
FTTH interop test. formed in 2003 and has been very active in organiz-
The first commercial FTTH network by key ing various activities.
carrier in China is Zisong FTTH project in Wuhan
by Wuhan Telecom, it consists of 420 subscribers,
and the equipment is Fiberhome's 1:32 triplex V. FTTH TECHNOLOGY
GEPON. The services provided include POTS voice, CONSIDERATIONS
VOIP voice, IPTV, CATV, Internet access and TDM
leased line. This network was deployed by (Wuhan) Currently, the three major FTTP technologies com-
China Telecom in a brown field for old multi-dwell- monly considered in China are EPON, GPON and
ing apartment buildings. The network operation P2P. APON will not be deployed due to its com-
started in Jan. 2005. In Aug. 2005, Wuhan South plexity and high equipment cost. Those three tech-
Lake FTTH network was completed. This com- nologies are complimentary rather than conflicting.
mercial FTTH network was deployed and commer- EPON is mainly used for FTTH in the area with
cially operated by China Netcom for new buildings high population density; GPON will be mainly used
in Wuhan. The GEPON equipments and cable used for corporations that need large number of TDM
in this project were provided by Fiberhome. This leased line services. P2P can be used for both
project has about 700 subscribers. The services pro- business cases and residential cases. For business
vided are the same as Zisong project. The only case, P2P will be used when the required bandwidth
difference is that this project uses two fibers with one is more than that a PON can provide. For residential
fiber exclusively used for CATV services. Beijing case, P2P is preferred than EPON when the residen-
broadband house FTTH network is a commercial tial homes are scarcely located.



5.1 EPON will be dominating FTTH market 5.2 GPON will be mostly used for FTTO

In China, for FTTH and some of FTTO cases, EPON GPON is a new PON standard proposed by ITU-T.
is preferred than GPON. The considerations are as The biggest advantage of GPON is its support for
follows: multiple services, especially the TDM service. While
Technology wise, EPON is more mature than some EPON products can also support TDM service,
GPON at present time. Most Chinese FTTH ven but GPON can provide TDM service in big capacity
dors can provide EPON systems, although they and relatively straightforward way. For most busi-
are different from each other in multi-service nesses and enterprises, TDM leased line service is
support. While GPON is relatively new technol required. Although EPON can also provide TDM
ogy and there is no mature GPON products in service, when the number of TDM T1/E1 is large, it
China yet ; is neither easy nor efficient for EPON to provide it.
EPON can meet all the service requirements for In this case, GPON is a preferred solution. In some
residential uses. For family home usage, the corporation or business cases, other leased line ser-
services need to be supported are POTS vices such as ATM and frame relay, are also required.
telephone, maybe fax, Internet access (file GPON is able to carry those services.
download, IPTV, games, etc), and CATV.
5.3 P2P will not be widely deployed
Fiberhome EPON equipment can meet all the
above requirements. It can provide telephone Currently, the biggest advantage of P2P type of
service by using either VOIP with embedded FTTP system is its flexibility in terms of bandwidth
IAD (Integrated Access Device) function in expansion. Because each user has a dedicated fiber
ONU or through TDM (E1/T1) over IP; It can exclusively used for itself, the bandwidth can be
provide Internet access in a straightforward way easily expanded when needed. Therefore, it is very
because of its Ethernet based transport nature; It good for those with large bandwidth needs and fast
provides CATV service through a third wave bandwidth increase. However, P2P type of FTTP
length which is dedicated for analog CATV system has a problem, that is, lower central office
transport. The fax service can be either through equipment density. In comparison with PON system,
telephone line over IAD or via VOIP T.38. it has more ports (one for each end user) in central
EPON is very easy for NGN evolution. NGN office, and therefore more central office space, more
is the future of the network. One of the key power consumption, more likeliness of system
features of the NGN is that it will be packet problems. This problem becomes server especially
based, while IP network is widely accepted as in big cities where central office space is limited.
the transport network of NGN. Ethernet based Another problem with P2P is that it needs more fiber.
EPON is very easy for NGN evolution because Although fiber cost keeps dropping, the fiber/cable
Ethernet is the best layer 2 technology for IP installation and deployment is still very expensive,
support. especially when new pipe needs to be placed. So in
EPON equipment is cheap. Ethernet is one of the China P2P system will not be widely deployed.
widely used layer two technology, more than
5.4 Multi-service support is required
80% of the IP traffic is now carried by Ethernet.
Ethernet protocol is very mature and many In China, one of the driving forces for FTTH is
types of Ethernet cards have become commodity. network integration, or triple play. This is different
Because of all above, EPON equipment is from that in Japan, where the FTTH is mainly used
cheap. for Internet access in most cases. In China, especially



for the new building, FTTH needs to support triple- WLAM combined solution might be useful in some
play or all-play. Although CATV network and cases. With this solution, FTTH has optical drop at
telecom network are currently separate, there are the door and then the voice and Internet access is
many efforts for network convergence. The separa- provided by WLAN, and the video service is con-
tion of CATV program and network is under nected the TV set through cable. For this solution, the
government's consideration. The "Telecommunica- ONU of the FTTH system has to provide WLAN AP
tion Law" to be issued soon will likely relax the function in its ONU. Another case for the function
restrictions on telecom service operation, to allow integration is to integrate the home gateway function
third party to run telecom services. All of those are into FTTH ONU. The extra function may include
good signs that the government encourages the inte- various interfaces for home security, hydro and
gration of the three networks, especially for the power meter reading; TV STB can be also integrated
access portion. into FTTH ONU. With all those functions integrated,
the ONU actually acts as a home gateway. With this
5.5 FTTH functionality expansion solution, each family has only one box at home
providing multiple communication, entertainment,
Currently, most FTTH systems only functions as
monitoring and other functions.
transport system. A typical FTTH system is consist-
ing of an OLT and multiple ONUs. An FTTH equip-
ment is consisting pure FTTH function only. The VI. MAJOR FTTH PLAYERS
vendors are now considering of expending the AND PRODUCTS
functionality of the FTTH system in the following
two aspects. After a few years of research, development, and field
The first expansion is multiple OLT function for trial of FTTH, now FTTH products are mature and a
smooth evolution. Currently, FTTH has not been number of carriers are showing strong interests in
widely deployed in China. In the near future FTTH FTTH commercial deployment. This section will
will not completely replace existing access solutions, describe the major FTTH equipment vendors and
especially DSL solutions. DSL and FTTH will coex- major carriers.
ist for a long time. In a residential area, it will be very
likely that some homes prefer FTTH while others 6.1 Major FTTH service providers
prefer DSL. So an integrated function OLT is a good
Currently, China Netcom is the most active FTTH
solution: a single chassis consists of both ADSL and
promoter. It views FTTH as part of its "Broadband"
FTTH (e.g., EPON) cards and those different cards
strategy. China Telecom and China Railcom are also
can be configured by any combination according
considering of building FTTH networks. Another
to the customer's requirements. For the uplink
new service provider called Tailong is very much
interfaces, the equipment can provide interfaces
promoting FTTH by encouraging government to
to different networks, including PSTN, Internet
open residential networks.
and CATV network.
For China Netcom and China Telcom, in the cities
Another expansion of FTTH is integrated ONU for where they have local network facilities, they want to
home network. The typical FTTH ONU only per- use FTTH for new residential buildings, in the cities
forms optical termination and provides different where they don't have local network facilities, they
interfaces for family usage including RJ11, RJ45 and try to use FTTH to compete with their competitors
CATV cable interface. Recently, local area and for access networks. For Tailong, it wants to build its
home wireless technologies such as WLAN are own residential networks and perform network op-
mature and accepted by the industry. An FTTH and eration and maintenance while leave the service to



service providers. The driving force for them to build Technologies, UTStar, Greenwill, and Fohope
FTTH network is to expend its residential networks. Networks. Fiberhome ranks number one in terms of
product maturity, functionality richness, and current
6.2 Major FTTH equipment vendors deployment in China.
Since 2001, a number of equipment vendors started Another type of FTTH equipment is Ethernet
to develop commercial FTTH systems. Those ven- based P2P system to use one fiber for each ONU. It
dors include Fiberhome Technologies, UTStarcom, can also support triple-play and TDM leased line
Greenwill, Fohope Networks, Huawei and ZTE. services.
Most of those companies have their FTTH products
deployed in various field trial FTTH networks. In VII. MARKET BARRIERS
addition to the domestic companies, there are also a
few foreign companies participating FTTH field trial Since Nov. 2003, FTTH has become a very hot topic
in China, including Wave 7, Optical Solutions, and in China's access networks, there have been a lot of
Flexlight. forums, technical papers, state funded research pro-
grams and a number of field trials going on. There are
6.3 Major FTTH system products
also a number of commercial FTTH networks. But
There are a number of FTTH equipment vendors in massive commercial deployment and operation of
China. The major FTTH systems include EPON FTTH in China seems to have a number of barriers to
system and point-to-point system. There are also one overcome. These barriers include high system cost,
vendor developing WEPON system and some con- lack of killer applications, lack of encouraging
sidering GPON system. In the following, we briefly regulations, and competition from other technologies,
describe the EPON, point-to-point, and WPON sys- as discussed below. Those barriers are not standing
tem of a few vendors. along, but inter-dependent.
According to the application it supports, current
EPON products in China market can be divided into 7.1 High system cost
three types: (1) for data services only; (2) for both
data services and TDM/voice services; (3) for data, The biggest barrier for massive FTTH deployment in
voice/TDM and analog CATV services. China is that the cost of FTTH system is very high
A typical EPON system follows IEEE 802.11 in comparison with ADSL. Currently, the ADSL
standards. One system can have 32 EPONs and equipment cost is about $40 per line, while that for
support 1024 subscribers. It uses 1.31 and 1.49 for FTTH is about $200 per sub for Internet access only
upstream and downstream TDM and data and $500 per sub for triple play. So FTTH is not
respectively, and 1.55 for downstream video. TDM attractive especially for the brown field where the
service is provided by TDM over IP. Both TDM existing telephone service and CATV service are
user's data and the synchronization signals are en- already available.
capsulated on RTP on top of UDP/IP. Each PON can
7.2 Lack of applications
support 32 or 64 end users. Downstream 1000M is
shared by all the 32 users; upstream bandwidth is Another problem with FTTH deployment is that
dynamically adjustable with a granularity of 512K there are no killer applications for FTTH. Although
within the range of 0~1000M. System is protected. It the overall bandwidth requirements are keeping
provides traffic control, priority control, DBA and increasing, but there is no one killer application that
many OAM functionalities. makes FTTH a must. Currently the most Internet
The main EPON vendors include: Fiberhome applications are low bandwidth applications. CTAV



is the number one bandwidth consumer, however, and for other services with new VOIP and other
currently in China, CATV programs are not allowed similar technologies. Both HFC and LAN are able
to be carried by networks other than Broadcasting to provide triple play.
and TV network. Fixed wireless technologies are other barriers for
The new applications include IPTV and gaming. FTTH deployment. Those technologies include
But none of them need more than 5Mbps bandwidth.
WLAN and the newly developed WiMAX. Those
HDTV is considered to be the killer application
technologies can provide enough bandwidth.
because it needs much more bandwidth than many
existing applications, however it is not available in
China yet. So lack of applications is another big VIII. MARKET OPPORTUNITIES AND
barrier to FTTH. DEPLOYMENT STRATEGIES

7.3 Regulations As we discussed in Section 7, we have many difficul-
ties to overcome before massive FTTH deployment
For most new technologies, its application at early
in China. But we also have some opportunities as
stage needs government's regulation encouragement.
described below.
The FTTH in Japan and broadband in South Korea
are good examples. The bundling rule issued by FCC 8.1 Starting with FTTO
of the United States for FTTH is another good
example. But so far central Chinese government has When we discuss FTTH, it actually includes two
not taken any measures to promote FTTH. types of application environment: one is FTTH and
the other is FTTO. For FTTH case, one of the major
7.4 Competition from other technologies issues is its high cost. But that issue is not that serious
for FTTO case. For FTTO, the customers are more
Another factor which prevents FTTH from massive
concerned about the services and stability of the
deployment is that existing access technologies are
system, while the system cost is not their number one
good enough for current various usages. Without TV
concern. In comparison with today's existing access
programs to be carried by the telecos access network,
solutions, FTTO is not that costly considering its
the current ADSL is good for most service and
TDM leased line services. A case study shows that
applications. The ADSL deployed in China today
for the small business office usage, the payback
can provide bandwidth of 2M for each subscriber.
period for telecom operator for FTTO is about two
2Mbps is good for most family usage. The new
years with assumption of 50% take rate at the end
versions of ADSL, ADSL2+ can provide much
of the second year. So one of the strategies for
more bandwidth (25Mbps) in many cases. That is
promoting FTTP in China at present time is for
enough for today's and most of the future's
business office use.
applications. ADSL2+ has been tested by a num-
ber of carriers in China and will start to be 8.2 FTTH for the new residential district
deployed late 2005.
In addition to ADSL, HFC and LAN are also Although FTTH is not really needed and not eco-
competing with FTTH. For broadcasting TV, HFC nomically realistic at the present time, especially for
is the most preferred solution at present time due to the brown field, the industry accepted that FTTH is
its existing network infrastructure and regulation the future of broadband access. So for the new
restrictions regarding to TV program broadcasting. building, people prefer to have fiber to be deployed
LAN is also a good solution for the green field to home rather than to have copper for now and fiber
because it is straightforward for Internet access to replace copper a couple of years later. What is



more, the cost for copper and fiber deployment is environment. For example, for the brown field where
compatible for the new builds. people already have phone service and CATV service,
So one way to promote FTTH is for carriers to the FTTH system only needs to provide Internet
work together with house builders. FTTH as a com- based services, the system can be very simple and the
cost can be much lower.
munication system is expensive, but in comparison
with a house, it is nothing. In China, many people
have their houses luxury furniture. For the new IX. SUMMARY
houses, people prefer to have their wire (or cable,
fiber, etc) to be deployed at the construction time FTTH has been very hot in China since 2003. Now,
rather than after the house is furnitured. When people the FTTH equipments suitable for Chinese market are
believe that FTTH is a trend, they can accept the mature. A number of carriers have been started FTTH
current cost. So the FTTH deployment can be bundled field trials and commercial deployments. China's
together with house construction. FTTH standards are under active study. Some local
Chinese governments are considering new regula-
8.3 Competition tions to encourage FTTH deployment in China; the
China's national "863" hi-tech program also has FTTH
As we described before, there are different aspects of related projects funded by the government; there is
competition, for CLEC to compete against ILEC and also an FTTH forum in China to promote FTTH
for telecos to compete against CATV providers. technology and deployment. Technology wise, there
Three networks convergence is an ideal network are a number of choices including various PON system,
infrastructure to avoid duplicate network point-to-point and WDM. Study shows that EPON is
one of the best choices for FTTH (including small
construction. That is more important for access
business) while GPON may be the best choice for
networks. Although this cannot be realized in the
FTTO according to their application environment and
near future, but people realized that it is the trend,
service to be supported. Although China has made a
sooner or later the three networks will be converged great progress in FTTH research and deployment in
into one. With that belief, CATV and Telcos are last a few years, there are still some challenges to
competing for FTTH territory. That will also drive further FTTH deployment. Among those challenges
FTTH deployment. So the strategy is to take the best are high FTTH cost and lack of killer applications. But
advantage of competition. at the same time, some short-term FTTH opportuni-
ties have been provided and a few suggestions were
8.4 HDTV needs FTTH presented for equipment vendors and service providers.

Although HDTV has not been popular in China,
people accept that it will happen in the near future. BIOGRAPHY
When customers started to demand HDTV, then the
best access solution is FTTH. The strategy is there- Wang Jianli , Ph. D. Deputy CTO of Wuhan
fore to promote HDTV. Research Institute of Posts and Telecoms (also known
as Fiberhome Technologies Group). He obtained his
8.5 Flexible solutions for different envi- Ph D. from Beijing University of Posts and Telecoms
ronment in 1992. His professional experience includes re-
search and product development in PDH, SDH, ATM,
The cost of the FTTH system is very much dependent IP over ATM, MPLS, IP over WDM, VoIP, NGN and
the services it provides. The system cost for triple FTTH. He is now leading a team responsible for
play is much higher than that for Internet access only. technology directions and product strategies of
So we need to differentiate different application Fiberhome Technologies Group.


Ftth in china

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Ftth in china