IDATE DigiWorld - FTTH global perspective 241017 - Roland Montagne

FTTH Global PerspectivesLessons to be learned

Broadband Forum Access Summit – Berlin, October 24th 2017

ContactRoland MONTAGNEPrinciple AnalystDirector DigiWorld Institute [email protected]

www.idate.org © IDATE DigiWorld 2017 – p. 2

1. FTTx Worldwide Key Trends 3

2. Major Players Worldwide 7

3. FTTH…

3.1. ... in Europe 11

3.2. ... in LATAM 21

3.3. ... in APAC 28

3.4. …and now in Sub Saharan Africa 36

4. Drivers for Fibre: The Gigabit Race, Short Latency and 4K / 8K ! 43

5. Conclusion: Why NG PON 2 now? G.Fast Drivers 49

Agenda

www.idate.org

1. FTTx Worldwide Key TrendsFTTH Global Perspective: Lessons to be learned


FTTx Worldwide key trends

> Superfast technologies(1) represented nearly 48% ofbroadband access subscriptions at end 2016, 9 points morethan one year before.

> FTTH/B is still the leading superfast broadband solution, farahead of FTTx/D3.0, followed by VDSLFTTH/B represented 68% of FTTx subscriptions at end 2016. Growth ofFTTH/B subscriptions will continue until 2021.FTTx/D3.0 represented at end 2016, 20% of FTTx subscriptions. After twoyears of significant growth, proportion of FTTx/D3.0 on SuperfastBroadband is levelling off.VDSL, for its part, lagged behind, representing 12% of subscriptions atJune 2016 . This proportion is quite stable.

> The regional breakdown is very heterogeneousNo huge changes in the geographical predominance of APAC on theFTTH/B market.FTTH/B is also the main deployed technology in MENA. It was the casealso in LATAM, but now it is meeting stronger competition from VDSLtechnologies in the region (especially in Brazil).FTTx/D3.0 is still dominant in North America and is by and large growingmore rapidly than other technologies.There is considerable space for VDSL and other copper basedtechnologies such as G.Fast in Europe, where incumbents still wish tooptimise their copper networks.

(1) For the definition of superfast platforms we have considered here three main architectures: FTTH/B,FTTN and FTTx/D3.0 deployed by cable operators

Breakdown of superfast broadband technologies, as of December 2016

Source: IDATE DigiWorld, World FTTx market, August 2017


Breakdown of Superfast broadband technologies

Geographical breakdown of the three main superfast broadband architectures, at December 2016


VDSL: 62 million subscribers (1) FTTH/B: 342 million subscribers FTTx/D3.0: 101 million subscribers

505 million FTTx subscribers Worldwide

at end 2016

MEA = Middle East and Africa; LATAM = Latin America; APAC = Asia-Pacific; NA = North America; EUR = Western + Eastern Europe(1) 11.8 M FTTx°+LAN subscribers in China are not taken into account.


Leading countries, by FTTx solutions at December 2016> China , leader on worldwide FTTH/B marketUntil end-2012, Japan was the most advanced FTTH/B market in the world.Chinese players are increasingly focused on FTTH/B and, as the largest country inthe world, it will remain the leading market for the near future. The number ofFTTH/B subscribers has already significantly risen since 2014.China and Japan are followed by Russia, which is ahead of South Korea, while theUSA is ranked 5th worldwide.Elsewhere in the world it is worth noting that FTTH/B is the only architecturedeployed, such as in Gulf Cooperation Countries (GCC) or the MENA region.

> Strong competition from VDSL technologies in North America,Europe and also in LATAMThe promise of VDSL-based technologies has convinced several Europeanincumbents to bet on the potential of their copper networks.However, as these deployments will concern limited areas, VDSL will not overtakethe two other major FTTx architectures at a worldwide scale.It can be noted that VDSL is the main architecture deployed in Brazil(17.2 million homes passed and 3.87 million subscribers) and in Israel (2.3 millionhomes passed and 1.5 million subscribers) the only two countries in their own regionto deploy this solution on a large scale.

> FTTx/Docsis 3.0 is the technology implemented by MSOsThe US market is clearly ahead of any other in the world concerning Docsis 3.0.Cablecos are implementing Docsis 3.0, expanding also fibre closer to homes, inorder to provide higher speed rates. In general, cablecos do not plan to expand theirgeographical footprint (with a few exceptions for those who decide to deploy FTTH).In the coming months they will focus on updating their existing networks with Doscis3.1. with a few exceptions betting on FTTH.European MSOs have completed also the upgrade of their networks, thus enteringthe Top 5, like Germany and the UK.

"Top 5" FTTH/B countries at December 2016 (‘000 subscribers)

"Top 5" VDSL countries at December 2016 (‘000 subscribers)

"Top 5" FTTx/D3.0 countries at December 2016(‘000 subscribers)




www.idate.org

3.1. FTTH in EuropeFTTH Global Perspective: Lessons to be learned


FTTH/B figures at September 2016

There were more than 44.3 million FTTH/B subscribersand nearly 148 million FTTH/B Homes Passed in EU39 at September 2016

Subscribers = 49%Home passed = 52%

EU 28

Subscribers = 43%Home passed =36%

CIS


General ranking : FTTH/B coverage

Average FTTH/B coverage*: EU39 45%EU28 33%

(*) Number of HP/total number of Households

Top 10 countries in coverage at September 2016

Source: IDATE DigiWorld for FTTH Council Europe


General ranking: FTTH/B Subscribers

•9 countries with 1 M subscribers or more in EU39 (5 countries in EU28, in red on the map))•Strong growth in Spain, Belarus, Finland and Portugal•Dynamism to highlight in France and ItalyCountries with 2 M HP or more at Sept 2016 [Top 5 Growth rates for 9 first months 2016](million)



General ranking : FTTH/B take-up rate

Average FTTH/B take up rate (*): EU39 30%EU28 28%

(*) Take up rate = number of subscribers / number of Homes Passed

Top 10 countries of more than 200 K subs in take-up rate at September 2016



European ranking

•The European Ranking includes countries of more than 200 K HH where the part of FTTH/B subs in the totalnumber of HH is at least 1%•Only 12/31 European countries with a penetration rate > 20%


www.idate.org

3.2. FTTH in LATAMFTTH Global Perspective: Lessons to be learned


Alternative operators leadership in LATAM

> A positive evolution: 82 FTTx projects in the region

> Players different from incumbents have deployed fibre in a dynamic way from 2015 to September 2016covering with fibre more homes:•Municipalities / Power Utilities have grown 33%•Alternative operators growth: 19%•Incumbents: Growth rate about 5%

Incumbents:

4 161 000 FTTH/B Homes Passed

Municipalities / Utilities:

190 800FTTH/B Homes Passed

Alternative Operators:

18 987 187FTTH/B Homes Passed

Source: IDATE DigiWorld for FTTH LATAM Chapter


Global FTTH figures for LATAM

> FTTH/B is taking a bigger place in the LATAM Market due to a positive evolution in the deployment anduser’s adoption…

4 552 698 FTTH/B

subscribersby Sept. 2016

in LATAM

23 352 987 FTTH/B Homes

Passed by Sept. 2016 in

LATAM

19.5% FTTH/B Take

up rate by Sept. 2016 in

LATAM

25% growthfrom 2015

18% growthfrom 2015

+1.4 pointsfrom December 2015

Take up rate = FTTH-B subs / Total FTTH-B Home PassedSource: IDATE DigiWorld for FTTH LATAM Chapter


FTTH subscribers per countries for LATAM

> … it can be also appreciated a good evolution in lower scale markets such as Jamaica, Trinidad,Barbados and Peru…

Source: IDATE DigiWorld for FTTH LATAM Chapter

www.idate.org

3.3. FTTH in APACFTTH Global Perspective: Lessons to be learned

www.idate.org

FTTH/B is taking a bigger place in the APAC Market due to a positive evolution in the deployment and specially in the user’s adoption

Source: IDATE for FTTH Council APAC

297.8 million FTTH/B

subscribers by Dec. 2016

in APAC

436.5 millionFTTH/B Homes

Passed by Dec. 2016 in

APAC

68% growth from 2015

12.5% growth from 2015

68% FTTH/B Take

up rate by Dec. 2016 in

APAC

> + 20 points from December 2015

Take up rate = FTTH-B subs / Total FTTH-B Homes Passed


Total FTTH/B Homes Passed by country

The Top-4: China is N0 1 by far due to the size of its market. Even though, countries like Japan, South Korea andIndonesia have reached 50 or more than 10 million homes passed with FTTH/B networks

Also it can be observed 10 countries that have deployed FTTH/B networks passing more than 1 million homes

7.6 7.5

3.85

3.08 2.8 2.5 2.3 2.28

1.21 1.06

0

1

2

3

4

5

6

7

8

Thailand Taiwan India Australia Kazakhstan Philippines Hong Kong Malaysia Singapore New Zealand

FTTH

/B H

P M

illio

ns

320

5218 13

0

50

100

150

200

250

300

350

China Japan South Korea Indonesia

FTTH

/B H

P M

illio

ns

Source: IDATE DigiWorld for FTTH Council APAC

The largest market worldwide. Important network overlapping. Coverage higher than gvt’s objectives

Source: IDATE DigiWorld for FTTH APAC


0,00%

100,00%

200,00%

300,00%

400,00%

500,00%

600,00%

700,00%

Philippines Thailand Australia New Zealand Indonesia India China Taiwan Malaysia Kazakhstan

Source: IDATE DigiWorld for FTTH Council APAC

% variation from Dec-2015 to Dec-16 in the number of FTTH/B Homes Passed by country

An aggressive deployment plan performed by PLDT

Also, significant deployment efforts has been executed during 2016 for example in Philippines, Thailand, Australia and New Zealand…

www.idate.org

3.4. FTTH in Sub Saharan AfricaFTTH Global Perspective: Lessons to be learned


Context

• A lack of investment in fixed copper networks,still mainly owned by governments; thepenetration of fixed lines is declining.

• Therefore a rather low adoption of fixed BB:4% of households in 2016 in SSA.

• Generally speaking, a lack of regulationtowards fair competition and networkopenness (LLU), so leading private players tobypass incumbent’s fixed network (FTTH).

• Leapfrog to wireless network: At the end of2016, more than 100 active LTE networks in43 countries deployed

• The deployment of submarine cables haslowered international bandwidth prices(formerly via satellite). But the access islimited to countries with a sea frontage.Landlocked countries need to be connectedvia transnational backbones.

Networks penetration in Sub Saharan Africa (SSA)

Source : IDATENumer of fixed lines, fixed BB subscribers, SIM cards, Mobile BB users

4G deployments in Africa in 2016

Source : IDATE

8% 1%12%

5% 4%

118%

0%

20%

40%

60%

80%

100%

120%

140%

Fixed lines Fixed BB Mobile BB

2011 2012 2013 2014 2015 2016


FTTH/B in Africa: Overview

• A native FTTH/B market• But a good dynamic with a steady

growth in some countries, andcommercial launch in about 17 countriesin SSA.

After Submarine cables …Terrestrial backbones

Source : AfTerFibre (African Terrestrial Fiber)

FTTH/B deployments in Africa (June 2017)

Source : IDATE

Commercial

Planned

South Africa

Kenya

Namibia

Angola

Nigeria

Zambia

Zimbabwe

Mozambique

Madagascar

Lesotho

Rwanda

RéunionMauritius

Cameroun

Eq. Guinea

Gabon

Tanzania

Ghana


Africa in the global ranking24

FTTH/B subscribers in Africa (SSA)

Source : IDATE

953 000 FTTH/B subscribers at June 2016

• Close to 1,3 million FTTH/B subscribers at June 2017• A good growth of 33% in one year

• Two countries are now well installed in global ranking(Number of residential subscribers / number ofhouseholds) at June 2017:

- Mauritius : 53,8% in theTop league close to Japan

- South Africa : 4,2%

• New Entry: ANGOLA with 2,3% !!

• La Reunion as a territory: 16,7%

1,27 M FTTH/B subscribers at June 2017

www.idate.org

4. Drivers for Fibre :The Gigabit Race, Short Latency and 4K TV !!

FTTH Global Perspective: Lessons to be learned


How Gbps plans are evolving

26

Since 2013, Providing Gigabitaccess has become a goal initself. The momentum hasbeen largely influenced byGoogle’s initiatives, sincefollowed by private sectoroperators and especially anumber of cities.

At the federal level, theGovernment and the FCChave announced newmeasures in support of city-led rollouts.

Europe

The Digital Agenda (DAE)sets Europe’s connectivitytargets: 30 Mbps for all, and100 Mbps connections or morefor at least 50% of Europeanhouseholds by 2020.

These appear very modest targets when compared to current technological possibilities, and the accelerated pace of the Gigabit race, which more and more ISPs seem willing to join.

Elsewhere around the world

In Asia, selling Gigabit-speedaccess is a strategic choice forprivate sector operators..

In Latin America and the MiddleEast, just providing the entirepopulation with broadbandaccess is already a challenge,so Gigabit access is not reallyon the table as yet. But a fewISPs do offer ultra-fast plans,aimed at a very specificclientele.

USA


2025 EU New Objectives: September 14th 2016

•1 Gbps for schools, universities, research centres, transport hubs, all providers of public services such ashospitals and administrations, and enterprises relying on digital technologies,

•All European households, rural or urban, should have access to connectivity offering a download speed of atleast 100 Mbps, which can be upgraded to 1 Gbps,

•All urban areas as well as major roads and railways should have uninterrupted 5G coverage. As an interimtarget, 5G should be commercially available in at least one major city in each EU Member State by 2020

27


Status of 1 Gbps plans around the world

Where are 1 Gbps plans available?

Source: IDATE DigiWorld, The Gigabit Race


China Telecom Sichuan: FTTH first then successful 4KTV !!!

• China Telecom Sichuan (CTS) covers a Territory 90 M inhabitants• End 2015, CTS announced having rolled out FTTH infrastructure to all of the 21 province’s cities, and its mainvillages and towns• First Province in China to be 100% FTTH covered in 3 years only!• 10 M FTTH subscribers and more than 9 M IPTV 4K subscribers !!

• Next step is 4K HDR …. Up to 25/30 Mbps necessary

Source: IDATE DigiWorld, April 2016, Chengdu

www.idate.org

5. Conclusion : Why NG PON 2 now ? … and G.Fast DriversFTTH Global Perspective: Lessons to be learned


Why NGPON 2 now?

• Gigabit Race is now a reality worldwide and this will accelerate in the 18 months tocome….how to face this with today GPON? How to serve large MDUs?

• Short latency applications will come and not only for Online Gaming…. VR is here

• TV and Video booming : 4K HDR already here (Netflix) and 8K will start probably in2018 (Japan)

• FTTH not only for Residential…need to differentiate traffic

- Mobile Broadband and 5G coming: recent 1.3 billion USD agreement betweenVerizon and Corning / Prysmian is a sign!

- Businesses: Cloud access and Ethernet Service with dedicated lambda


Drivers for G.Fast

• FTTH main challenges find solutions with G.Fast- To solve the cost of the last mile and especially homes installation for Fibre- The MDU case in the USA

• BT : is not the only one to opt for G.Fast but the volume is there: 10 M Homes !• Swisscom opened G.Fast commercial services one year ago

• NG Fast promises to deliver 10 Gbps over copper

• …. And Fibre will be close : GPON backhaul for G.Fast

• G.Fast Field trials and deployments are now well underway all across the Globe.• Ecosystem is being build with all main active vendors proposing G.Fast but alsoinnovative chipset suppliers (Sckipio).


IDATE Research: Stream FTTx & Gigabit

33

MERCI !!! Roland MONTAGNE

Principle AnalystDirector DigiWorld Institute UKmob: +33 680 850 [email protected]

Date post:	21-Jan-2018
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IDATE DigiWorld - FTTH global perspective 241017 - Roland Montagne

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