FTTH: The Progress The Drivers The Promise

Transcription

1 FTTH: The Progress The Drivers The Promise North American Market Research Michael Render September, 2014

2 Informational Objectives For Session (For European Developers, Policy Makers, and Providers) The Progress Deployments in America The Drivers Consumer drivers Competitive drivers The Promise FTTH is already changing lives What does the future hold?

3 The Research: North America (USA, Canada, Caribbean, Mexico*) 350 Provider/ Vendor/ Expert Interviews: March May ,050 Consumer Interviews: May - June, 2014 *Mexico stats from IDATE

4 FTTH: The Progress

5 North American FTTH Connections Are Accelerating Homes Marketed Reaches 30 million (US, Canada, Mexico) Homes Passed Homes Marketed Homes Connected Official estimates due end Sept 2014 US Rough estimates June 2014: 22.7 Marketed 10.4 Connected Mar '14 Sep'13 Mar '13 Sep '12 Mar '12 Sep '11 Mar '11 Sep '10 Mar '10 Sep '09 Mar '09 Sep '08 Mar '08 Sep '07 Mar '07 Sep '06 Mar '06 Sep '05 Mar '05 Sep '04 Mar '04 Sep '03 Mar '03 Sep '02 Mar '02 Sep '01 Homes passed = Homes that could be served / includes builds in progress etc. Home marketed = Homes actively marketed with FTTH

6 Higher Capacity Broadband Is Winning

7 FTTH Results In High Take-Up U.S. Take-Ups Reach 45.9% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Mar '14 Sep '13 Mar '13 Sep '12 Mar '12 Sep '11 Mar '11 Sep '10 Mar '10 Sep '09 Mar '09 Sep '08 Mar '08 Sep '07 Mar '07 Sep '06 Mar '06 Sep '05 Mar '05 Sep '04 Mar '04 Sep '03 Mar '03 Sep '02 Mar '02 Sep '01

8 Gigabit Providers Are Increasing Rapidly USA Gigabit Providers As of July 15, 2014 Municipal Private Competitive Tier 2/3 ILEC 7 Real Estate Development Private Cable Operator Electric Coop Tier 1 ILEC Total

9 Early Google Market Share Is High In Kansas City Share Among Random Broadband Users Google has already achieved a 25% share of all Internet homes in central Kansas City, Kansas. Google s take-up is likely considerably higher because not all areas are built-out. A regional average speed of 87 Mbps is indicated. (Ookla s Net Index shows 86 Mbps highest in the nation.)

10 FTTH: Consumer Drivers

11 Online Time At Home Is Becoming Very Important The average person reports spending 5.7 hours online at home per day.

12 The Number Of In-Home Internet Devices Is Growing The average random broadband user owns 5.5 Internetready devices in the home. The average random broadband home now has an estimated 2.9 HD televisions/ DVRs (many fed by IP).

13 Large Screen Devices Continue To Drive Wireline Percent Preferring Devices At Home For Primary Online Tasks Handheld Tablet Desk/Lap Television All AGES: Watch a movie 1% 1% 7% 92% Communicate with a friend via text or 38% 8% 51% 2% Play on online game 7% 16% 66% 11% Work on a project for work or school 1% 4% 91% 5% AGE UNDER 35: Watch a movie 0% 2% 17% 82% Communicate with a friend via text or 64% 5% 29% 2% Play on online game 11% 10% 63% 15% Work on a project for work or school 0% 3% 96% 1%

14 Multi Screen Use Is Increasing Tablet Devices Are Often Used While Watching TV On average, users report actively using a second device 23% of the time while watching television.

15 Speed Increases Are Consistently Underestimated Broadband Was Expected To Reach An Amazing 720 Kbps by 2011 Bandwidth Per User Forecast

16 FTTH Performance

17 FTTH Has The Highest Tested Download Speeds Median Tested Download Speeds

18 FTTH Is Pulling Away With Tested Upload Speeds Median Tested Upload Speeds

19 FTTH Speeds Are, By Far, The Most Symmetrical Upload Speed As A Percent Of Download Speed FTTH 75% Wireless 27% Cable Modem 21% FTTN 17% DSL 16% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

20 FTTH Is The Most Stable Platform Reported Reboots Required Each Month FTTH 1.1 Cable Modem 1.5 DSL 2.4 Wireless

21 FTTH Is The Most Stable Platform (Cont.) Reported Customer Service Calls Per Year FTTH 1.3 DSL 2.0 Cable Modem 2.1 Wireless

22 FTTH Offers The Best Value Reported Cost For Internet Service/ Median Blended Mbps* FTTH ($56) $3.80 Cable Modem ($51) $7.25 FTTN ($47) $10.63 DSL ($44) $22.51 Wireless ($53) $ * Average Downstream and Upstream Mbps

23 FTTH Value Proposition

24 Customers Describe Diverse FTTH Advantages Categorization Of Open-End Responses

25 Consumers Actually Rate Reliability Most Important Percent Perceiving Benefit Somewhat Or Very Important Reliability/ Service 94% Clear picture quality 93% Faster Internet speeds 91% 0% 20% 40% 60% 80% 100%

26 FTTH Satisfaction

27 Users Are Much More Satisfied With FTTH Percent Very Satisfied With Aspects Of FTTH Service Quality of HD picture 56% 72% Reliability- Service uptime 30% 41% 58% Consistency of speed 35% 31% 50% FTTH roadband download speed Broadband upload speed 32% 33% 31% 41% 49% 48% Cable DSL Streaming video 25% 26% 42% 0% 20% 40% 60% 80% 100%

28 FTTH Increases General Satisfaction With A Residence Percent Satisfied With Home By Broadband Type FTTH 82% Cable Modem 74% DSL 71% 0% 20% 40% 60% 80% 100%

29 FTTH: Competitive Drivers

30 FTTH Results In Higher ARPU Average Cost Of All Services Reported By Consumers By Broadband Type FTTH $142 Other Broadband $110 $0 $20 $40 $60 $80 $100 $120 $140 $160

31 FTTH Reduces Operations Costs Estimated Opex Savings Among Those With Active FTTH Customers 0-9% 35% 10-19% 22% 20-29% 30+% 23% 20% Average Estimate: 18% (2013 Estimate: 20%) 0% 20% 40% 60% 80% 100%

32 FTTH Maximum Download Speeds Are Increasing Maximum Download Speed Tier By Provider Type

33 FTTH: The Promise

34 FTTH Improves Productivity Annual Hours Waiting On Apps To Load : Gears Turning FTTH 121 Cable modem hours Difference DSL 170 $0 $50 $100 $150 $200

35 FTTH Changes How We Work Employed FTTH users say they work 1.3 extra days per month from home (on average). A total of 13% of FTTH users have a home-based business with over $10,000 estimated incremental income from FTTH Data

36 FTTH Positively Influences Economic Development Percent Noticing Economic Development: Municipal FTTH Providers New employer attraction 88% Employer expansion 85% Employer retention 77% Home based business 58% 0% 20% 40% 60% 80% 100%

37 FTTH Adds Home Value eported Discount Required To Consider Equal $300,000 Non-FTTH Home Perception: Current FTTH subscribers $5,337 Perception: Non-FTTH users $6,451 $0 $2,000 $4,000 $6,000 $8,000 $10, Data

38 Phases Of FTTH Introduction Extending Competing Redefining

39 Many Emerging Uses Are On The Horizon Special Interest now: Young Men & Women Special Interest now: Seniors, Young Mothers Special Interest now: Women Special Interest now: Young Males

40 FTTH Is Positioned To Rapidly Consolidate Market Position

41 FTTH: The Progress The Drivers The Promise North American Market Research Michael Render September, 2014