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2 Main Topic Fiber-optic broadband hits top gear Fiber-optic broadband hits top gear UN Secretary-General Ban Ki-moon said at the World Telecommunication and Information Society Day 2010, In today s world, telecommunications are more than just a basic service they are a means to promote development, improve society and save lives. After massive 3G investments, an increasing number of countries are deploying fiber-optic networks to enhance competitiveness and spur economic development. With increasingly mature technology, FTTx is more than ready to give operators a competitive edge and a stronger market position. British Telecom is to invest 2.5 billion pounds to cover two-thirds of homes in the UK by The US has earmarked 7.2 billion USD to optimize broadband access. By Li Heshun 17
3 Huawei Communicate Deutsche Telekom will invest over 10 billion euros in fiber optics, mobile technologies and IT processes. South Korea is to spend billion USD to develop the ICT industry, with an FTTH/B subscriber base of 9.23 million. France Telecom plans to invest around 2 billion euros by 2015 in fiber optics. China began to build FTTx networks in 2007, and will invest over 22 billion USD in the fiber-optic field. e-japan strategy has helped Japan acquire million FTTH/B subscribers by the end of Etisalat plans to deploy a nationwide FTTH network in 2011, serving over 1 million customers. Singapore plans to invest 700 million USD by 2012 to build a nationwide FTTH network. Australia has unveiled ambitious plans to develop their national broadband. 18
4 Main Topic Fiber-optic broadband hits top gear Broadband as a national strategy According to Dr. Tim Kelly, the World Bank s lead ICT policy specialist, broadband investment is a policy with no regrets. World Bank research indicates that a 10% increase in the penetration of broadband can produce a 1.4% increase in GDP and quickly help it to rise. An increasing number of developing countries have stepped up fiber-optic network deployment to build better ICT infrastructure and stimulate economic development. For countries with a lower per capita GDP, fiber-optic solutions provide an optimum choice due to the increasingly mature technology and a rising performance/price ratio. In many emerging markets, FTTC, FTTB, and FTTH projects are implemented with governmental support, international aid, or bank loans. These future-oriented technologies can enhance communications infrastructure, while avoiding duplicate construction of copper-based networks. Fiber-optic network deployment is strong in developed countries and accelerates economic development, promotes employment, creates greater telecom competition, while boosting the level of national competitiveness. The last-mile fiber-optic access can eliminate the bandwidth bottleneck resulting from twisted pair connections and accommodate future-oriented services like video communications & entertainment, telemedicine and distance learning. In 2009, President Obama signed the American Recovery and Reinvestment Act, which allocated 787 billion USD to stimulate the economy, with 7.2 billion USD earmarked to optimize broadband access. The Federal Communications Commission (FCC) is now developing a National Broadband Plan to ensure that every American can access the Internet. Finland is the first country in the world to recognize broadband Internet access as the legal right of every citizen. Every permanent citizen has the basic right of accessing 1Mbps broadband in the first phase, and 100Mbps broadband by the end of The objective of the project is to ensure that more than 99% of the population is no further than two kilometers from a 100Mbps fiber-optic cable network. The Asia-Pacific region is also a major incubator of new technologies. To enhance the ICT infrastructure, governments in the Asia-Pacific region have enacted encouraging policies and some are directly investing in fiber-optic network deployment. Japan has been leading the world with million FTTH/B subscribers by the end of With strong support from the government, Japan has launched the e-japan strategy, including deploying FTTH for high speed broadband access. South Korea has also been actively engaged in fiber-optic network deployment. In September 2009, South Korea decided to spend billion USD to develop IT convergence applications, software, key IT solutions, communications and the Internet over the next five years. By the end of 2009, South Korea had an FTTH/B subscriber base of 9.23 million. Singapore plans to invest 700 million USD by 2012 to build a nationwide FTTH network, covering 95% of the nation, and then the entire population by Malaysia has also released its National Broadband Initiative (NBI), planning to invest 2.2 b i l l i o n USD in FTTH deployment before In addition, Australia, New Zealand, Kuwait, Qatar, and others have unveiled ambitious plans to develop their national broadband strategies. A strong wave of investment Cable operators expanding ultra-broadband capacity Technological development has enabled broadband services to generate higher returns, which in turn attracts many new players including cable operators, who provide ultra-broadband services by connecting fiber to buildings and then extending it via cable to homes. In North America, Latin America, and Europe where cable TV penetration rate is high, cable networks provide not only TV services, but also broadband access for a large number of subscribers. Globally, about 20% of broadband connections are cable-based. By 2013, Docsis3.0 technology is expected to prevail with 100Mbps access. Comcast, a leading US cable operator, plans to upgrade its network to Docsis3.0 by 2010, enabling 80% of subscribers to double their broadband access speed. In France, cable operator Numericable acquired 77% of the 40,000 FTTH subscribers added in the first quarter of
5 Huawei Communicate Mobile operators entering the fiber-optic field Increasing competition in the mobile voice market has led to decreased ARPU and a higher churn rate. Fixed broadband can help mobile operators diversify their revenue portfolio, provide bundled services and retain customers. Many mobile operators have entered the fixed broadband field by building or acquiring fixed infrastructure. In 2008, Vodafone acquired Arcor and turned it into a wholly-owned subsidiary. Arcor now is the second largest fixed operator in Germany with a 14% share in the broadband market. In 2008, Arcor deployed FTTC to enhance the broadband speed to 50Mbps, providing customers with services like HD IPTV and Internet access. As a result, Arcor has increased its market share year on year and showed a 30% increase in broadband customers. China Mobile has been a leader in the Chinese mobile market. After acquiring the fixed network in 2008, it has become an integrated operator. They selected GPON as the major access technology for full-service operations and to diversify competitiveness. In next few years, China Mobile is expected to fully expand broadband access and move towards being a full-service operator by building their own fiber-optic network. Mobily is the second largest mobile operator in Saudi Arabia. In 2007, it became an integrated telecom operator by acquiring fixed assets. Lacking copper infrastructure, they focused on fiberoptic deployment, rapidly expanding FTTH and expect to have 100,000 FTTH subscribers by the end of By rapidly deploying fiber-optic broadband networks, mobile operators are entering the fixed broadband field and bringing more investment to the fiber-optic infrastructure. Fixed operators are promoting FTTH deployment With the advent of an ultra-broadband era, fixed operators are facing increased challenges in terms of sustainable growth, competition and network deployment. Based on their substantial subscriber base and infrastructure, fixed operators are ramping up FTTH deployment to gain a more competitive edge in the market. American operators have accelerated FTTH deployment to better cope with intense competition from cable operators. In particular, MSOs plan to offer 100Mbps access for customers and increase the pressure on incumbents like Verizon and AT&T. In 2004, Verizon invested 23 billion USD to build an FTTH network, covering 18 million homes under the umbrella of the FiOS service. To date, the service covers 15.6 million homes. FTTH has enabled Verizon to increase ARPU when facing a declined fixed-line business. Dominating customer satisfaction surveys, FiOS has helped Verizon gain a substantial number of new broadband users and TV viewers. In October 2009, British Telecom unveiled a plan to spend 1.5 billion pounds building an FTTC network that will cover 40% of UK homes before By the end of 2010, the FTTC network will cover 4 million homes. In 2010, British Telecom announced adding an additional 1 billion pounds to fulfill the ambitious plan of covering twothirds of homes in the UK by BT has also accelerated FTTH deployment based on network infrastructure. In March 2010, Deutsche Telekom unveiled a high-speed broadband plan, under which it will invest over 10 billion euros in the next three years in fiber optics, new mobile communications technologies and IT processes. It is projected that by 2012, there will be an FTTH subscriber base of 4 million covering 10% of all homes in Germany. In Ja n u a r y , t h e Fr e n c h government decided to spend 2 billion euros to improve the national broadband infrastructure and provide low-interest loans to encourage operators to build fiber-optic networks in large cities other than Paris. In February 2010, France Telecom announced a plan to invest around 2 billion euros by 2015 in fiber optics and will roll-out ultra high-speed broadband in cities including Cannes, Montpellier and Orleans in As a technology leader in the Gulf region, Etisalat plans to deploy a nationwide FTTH network in In March 2010, Etisalat announced that more than 500,000 residential Al Shamil broadband subscribers have up to 30Mbps access speeds. By 2011, the subscriber base is projected to exceed 1 million and the broadband speed will reach 100Mbps. Other operators such as Portugal Telecom, Telekom Austria, and Telecom Italia have also released their FTTx strategies and are prepared to launch nationwide fiber-optics networks. Gaining momentum in China China began to build FTTx networks in 2007 and showed remarkable progress in 2008 and In June 2010, China Mobile invited bids for 6 million FTTx lines. China Telecom and China Unicom are also expected to deploy and operate up to 10 million FTTx lines in Prior to 2010, FTTB was the major FTTx network construction mode in China, with only a small number of FTTH trial projects being initiated. With the rapid development of the industry chain and reduced equipment and terminal costs, FTTH began to show its advantages in terms of cost and technology and is now set to be an optimum choice for fiber network deployment in China. In 2010, the Chinese government announced plans to invest over 22 billion USD in the upcoming three years to converge telecommunications, broadcasting and Internet networks. Driven b y m a s s i v e g overnment investment, China s FTTx network deployment will see exponential growth in the coming years. Editor: Li Xuefeng xuefengli@huawei.com The electronic version and subscription information are available at Questions and suggestions may be directed to the editor concerned. 20
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