2009 Australia - The Emerging FttH Market

FttH developments are gaining momentum.

There is now widespread agreement that FttH is the future-proof infrastructure needed for the digital economy that is going to propel us into a sustainable level of recovery after the financial crisis. It is essential for a new way of delivery of services such as e-health, e-education, energy-saving applications and e-commerce, as well as for Internet access and entertainment.

In 2009 Japan continues to lead the world in terms of FttH subscribers, but South Korea has the highest penetration in the world. The USA and parts of Europe are also rolling out FttH rapidly.

But Australia has by far the most ambitious plan.

This report provides an analysis of the market, including a look at the various business drivers, future opportunities and current business models. It also identifies the leading markets and supplies statistics and forecasts.

Different business models are being used around the world to find solutions for the expensive deployment of new fibre networks. Some are based on video entertainment; others on social services (healthcare and education); others are looking at technology innovation and export; and many simply will go with the flow – Australia can take international leadership, which will be a boost for its economy.

We discuss costs and forecasts; however, national fibre rollouts will need to go hand-in-hand with digital economy applications if they are to work financially and economically. The National Broadband Network proposed by the Australian Government is the most visionary initiative ever undertaken anywhere in the world. It also future-proofs Australia’s regional and rural networks.

BuddeComm has been discussing at length the opportunities within the ICT industries for utilising new telecoms networks for e-health, e-education, smart grids (managing renewables, saving energy), etc; and the Australian Government is now leading the world in trans-sector thinking, which is essential to guide us through the next stage of human evolution. In the report we draw attention to the importance of this concept – that of looking across sectors to create synergy.

The report discusses the way this new kind of thinking also applies across infrastructure projects – in addition to telecoms and electricity networks, potential synergies exist between the building of roads, sewerage systems, water and gas pipe networks. It also tracks the initiatives announced by the government since the NBN.

The government’s decision to invest $43 billion in a national FttH broadband network is a clear indication that it believes broadband infrastructure is a collective good. With its trans-sector multiplier effect the infrastructure will deliver massive social and economic benefits. There is no other way – if you want to build a digital economy you need FttH, and for it to work it must be built by a utility. Early indications that Telstra is going to cooperate are very promising.

This new broadband plan offers unprecedented opportunities for Australia – not just in relation to telecommunications, broadband and the Internet, but also for a range of new applications, most of which we can’t even envisage at this point in time. This report addresses the enormous opportunities that the infrastructure – as a utility – has to offer, and also explores at a high level the issues that need to be addressed.

One critical issue is that it needs to be recognised as the infrastructure for the digital economy. To simply see it as an upgrade of ADSL broadband would be a grave mistake. In this context the report is complemented with observations by both the Digital Economy Industry Working Group and our International (Obama Team) Big Think Strategies Group.

Bright in Perth carried out the first major rollout – this was perhaps too early for its time, as it was abandoned in 2007. The country’s first large-scale FttH rollout is now taking place in Tasmania as part of the NBN. It will build on some previous projects, including the TasCOLT FttH project and Aurora’s BPL project.

The most advanced fibre network developments are taking place in R&D and university networks, where AARNet is taking an industry leadership role.

Throughout 2007 Australia saw a dramatic rise in the number of FttH operators and this continued in 2008. But the national approach has given rise to renewed confidence, and the future seems secure for further, even more rapid deployments in 2009 and beyond. The deployment of FttH in greenfield estates is a dramatically growing industry; however, while the design of a fibre solution might be perceived as a rather simple task, achieving a correct design and then operating it effectively and with long-term success is quite a different matter.