2007 Global Broadband - Broadband is Essential Infrastructure

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Last updated: 14 Jun 2007 Update History

Report Status: Archived

Report Pages: 146

Analyst: Stephen McNamara

Publication Overview

This annual report offers a wealth of information on the worldwide fixed broadband industry, and includes analyses, statistics, trends and forecasts. The report also provides a market overview of the various broadband technologies, including DSL, cable modem, fibre, BPL and broadband satellite. Regional information is also included, providing a comprehensive overview of how broadband is progressing around the world.

Subjects covered include:

  • The current broadband market;
  • Worldwide and regional broadband statistics;
  • Broadband infrastructure analysis;
  • The DSL market;
  • The cable modem market;
  • FTTx market;
  • Broadband over Powerline (BPL) market;
  • Broadband satellite;
  • Regional information.

Executive Summary

As the Internet economy, digital media and other telecommunications activities become more established; the need for modern and efficient infrastructure is becoming more critical. Broadband services are becoming an essential commodity, and while some countries like Japan and Korea are leaders in this area, many other countries are failing to keep pace with demand.

For more information, see chapter 1, page 1.

In 2007 we see that fixed broadband is still mainly confined to the developed markets. This is because there are enough good quality fixed networks in place to allow for roll outs of the technology. There are now close to 300 million broadband subscribers worldwide, and DSL is by far the most popular access technology.

For more statistical information, see chapter 2, page 16.

At this stage other technologies, such as fibre and satellite are minor players. DSL has so far been the most effective and economical route to global broadband deployment. The emphasis of the next phase of broadband is on increasing speeds, which via ADSL2+ and VDSL will eventually lead to Fibre-to-the-Home (FttH). The market will need to focus on fibre because in the coming years the use of popular high-bandwidth applications will dramatically strain existing copper-based networks.

For more information, see chapter 3, page 26.

Asia is the one region of the world where FttH has started to emerge as a serious broadband platform. Not unexpectedly, the movement towards fibre is occurring in Asia’s more developed markets where positive government intervention has been playing an important role.

In 2007, Japan continues to lead the world in fibre deployments, and South Korea is also rapidly rolling it out. The US is also focusing on fibre, and will probably catch up to Asia over the next ten years. In Europe, deployments by municipality and property developers have shown the fastest growth, although the telcos still account for a higher proportion of lines installed. On a government level, those of Ireland, The Netherlands and Sweden have been among the more progressive FttH providers, installing extensive fibre connections to neighbourhoods or homes.

For more information, see chapter6, page 52.

The focus of Broadband over Powerline (BPL) has changed within the last year from broadband connectivity to smart meters on broadband infrastructure, which allows householders to reduce energy costs and energy companies to better manage their networks. The next step for BPL is to make the transition from the current trial status to the commercial arena, and this will require the establishment of an appropriate regulatory framework to support the technological developments that are occurring.

For more information, see chapter 7, page 61.

It is a positive sign that this sector is looking at alternatives for broadband use; beyond the usual high-speed Internet access. It is important for the overall industry to realise that Internet access will be just one of many services that will be delivered over broadband infrastructure. There are other important services emerging that will depend on high quality broadband infrastructure, such as e-health, education, e-business, digital media, e-government, smart utility meter reading, etc. In countries where the national telco is lagging behind, we are seeing that local governments have no choice other than to take a leadership role – just as they have done with similar infrastructure over the last 100 years.

Key highlights:

  • There will be close to 500 million broadband subscribers worldwide in 2012.
  • Overall telecom industry spending grew by more than 12% in 2006, driven by the demand for broadband and high-speed services.
  • DSL is the most common broadband access technology worldwide, capturing over 65% of the market.
  • VDSL and VDSL2 will provide telcos with the ability to not only offer telephony and high-speed Internet access, but also High Definition TV (HDTV), VoIP and multiple and simultaneous video streams over the same copper pair. However there are still a number of issues hindering the uptake of this technology. For more information, see chapter 5, page 45.
  • The cable modem sector lags behind DSL with only around 22% share of the market, however VoIP technology has provided the sector with new opportunities; evidence of this coming from North America and Europe in particular.
  • Worldwide cable telephony services revenue is expected to reach around $11 billion in 2007. For more information, see chapter 4.4, page 43.

Residential broadband (BB) growth predictions – next ten years

Time frame User development BB speeds Key reasons
2003-2005 Early adopter 300-500Kb/s Always-on Internet
2005-2007 Seasoned user 2Mb/s Internet plus photos
2007-2009 BB part of life 6-10Mb/s Triple-play/video entertainment
2010-2015 Fully-integrated BB 25-45Mb/s Telework, education, healthcare, hobby, entertainment
(Source: BuddeComm based on industry data)

  • At the moment around 50% of Internet traffic is consumed by less than 5% of Internet users, however it is only a matter of time before the other 95% catch up. This will result in a wild growth of local infrastructure projects over the next five years.
  • To compete with fixed broadband, it is essential for reliable high-speed wireless technologies to be developed. The competing technologies include the intermediate mobile standards like GPRS, emerging 3G standards, the fixed wireless technologies such as WiFi, WiMAX and a range of proprietary services operating in 3.4GHz band.
  • Latin America is one of the world’s fastest growing regions in terms of broadband uptake, with an annual growth rate of around 54% in 2006. However broadband penetration at the end of 2006 was only 2.5% - considerably less than the global average of 5.4%.
  • The USA is one of only two countries in the OECD in which cable subscribers outnumber DSL subscribers. However DSL is expected to overtake cable in 2008, and the telcos’ massive fibre deployments will vastly improve the speeds and bandwidth of the telcos broadband networks, allowing for new services such as IPTV. The response by cable may be DOCSIS 3.0, a relatively cost-competitive, easy-to-deploy ‘wideband’ answer to the telcos’ fibre networks. For more regional information, see chapter 9, page 84.

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