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Summary

In mid-April, all roads lead to Broadband World Forum Asia being held in Hong Kong. Well OK – maybe not all roads, but all broadband-related discussions. FTTP will be on the agenda. Among regions, Asia-Pacific has the highest number of FTTP subscribers in the world with 328 million as of 2016, compared with 62 million FTTP subscribers in the rest of the world. Those FTTP subscribers in Asia are also far more numerous than subscribers on DSL (62 million) or cable networks (44 million) in the region. Japan and Korea were among the Asian FTTP pioneers 10 years ago, but now many other countries are contributing significantly to subscriber growth.

Japan led the way in 2007; China and Vietnam to lead in subscriber additions in 2017

Within the region, big changes are under way. Ten years ago, the Asian region was adding approximately 1.5 million FTTP subscribers every quarter. Japan led the way with smaller additions from South Korea, Taiwan, Hong Kong, and China. Those were the pioneers. We estimate that in 1Q17, the region will add up to 22 million FTTP subscribers a quarter, with China accounting for almost 20 million. China now leads in FTTP subscribers by far among all countries around the world, not just Asia.

The pioneers continue to add substantial numbers of FTTP subscribers. But many other countries – a mix of developed and developing nations, including Vietnam, Indonesia, Thailand, Singapore, Malaysia, Australia, and New Zealand – are surging in subscriber additions, rivaling or even surpassing the quarterly growth of the original FTTP pioneers.

The share of quarterly FTTP subscriber additions per country expected in 1Q17 compared with 10 years ago is below (excluding China).

FTTP business models changing but remain challenging

This broad-based growth in FTTP subscribers lends new dynamism to the region, but also puts pressure on operators to deliver on the FTTP promise of higher speeds and superior customer experience while facing strong to severe competition. When one operator offers gigabit speeds on FTTP, the others must follow or face declining market share. Long-standing FTTP business models are changing. In Japan, Singapore, and Hong Kong, gigabit services are giving way to 10-gigabit services while prices decline. Clearly customers benefit from the higher speeds enabled by FTTP at lower prices, but for operators, the challenges continue.

Are gigabit FTTP services making money? When should an operator offer gigabit or wholesale services? Can fiber deployments eventually lead to fixed–mobile substitution instead of defending the wireline business? We will talk about these issues and more at Broadband World Forum. Ovum will be moderating the opening keynote, participating in a panel discussion, and speaking about FTTP.

Appendix

Further reading

Disrupter Case Study: Altice USA, TE0009-001591 (February 2017)

"Have we reached a tipping point for fiber-to-the-premises?" TE0009-001592 (January 2017)

Author

Kamalini Ganguly, Senior Analyst, Broadband and Multiplay

kamalini.ganguly@ovum.com

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