2009 Global Next Generation Telecoms - FttH and Trans-Sector Strategies

The deployment of FttH around the world is beginning to lead to exciting developments for the next generation of telecommunications. In particular, infrastructure based on FttH is providing the foundation for smart communities and cities where a number of technologies and services are combined to create an enhanced value proposition for residents. Smart homes connected to these networks can utilise services such as e-health, e-education and e-government as well as access digital media and high-speed Internet. Sustainability is also integral to the smart community with many environmental initiatives, such as smart grids, slowly becoming a reality.

While FttH networks had begun to arrive well before the financial crisis hit; surprisingly it is the crisis itself that is now driving fibre beyond its first stage. Many countries, such as the USA, UK, Australia and New Zealand, have included broadband networks in their economic stimulus packages. These developments are also pushing the countries that had already embarked on FttH to increase activities in their fibre markets. Examples include Finland, Norway, Switzerland, Greece and Japan.

Australia has emerged as an interesting model to watch as the government plans to invest AU$43 billion in a national FttH broadband network. This is a clear indication that it believes broadband infrastructure is important for the collective good. The primary focus of the proposal comprises the establishment of a new utility, the National Broadband Corporation, to build and operate a super-fast wholesale-based National Broadband Network.

In Europe we have also seen extraordinary changes to the telecom networks as incumbents and new entrants switch on their All-IP Next Generation Networks. In addition there has been increased activity in fibre deployment as a result of the falling price of fibre builds and regulatory approval of municipal and government involvement in large infrastructure projects. While investments in NGNs are aimed at meeting burgeoning consumer demand for high-bandwidth applications, they have also triggered a number of regulatory changes on both the national and European levels as regulators endeavour to provide fair network access to competitors. These measures have included provisions for the functional separation of incumbent operators.

It is now becoming clear that a trans-sector approach is required to facilitate NGNs based on FttH. What BuddeComm is referring to is the importance of looking across sectors to create synergy. If we consider the major benefit of fibre infrastructure to be that it acts as a conduit for sustainable economic growth and society development, then we need to change the structure of its business model. Only if fibre is made available as a utility will we be able to reap the trans-sectoral fruits of this infrastructure.

A trans-sectoral way of thinking can also be applied across infrastructure projects – looking at the potential synergies between the building of roads, sewerage systems, water and gas pipe networks, as well as telecoms and electricity networks. In short, it is trans-sector policies and strategies which will create the smart communities of the future.

This report provides a valuable insight into the developments taking place in Next Generation Telecoms (NGT). It focuses on FttH infrastructure developments and discusses trans-sector strategies which are required to facilitate FttH. It includes market statistics on global FttH deployment and identifies the leading markets. Regulating fibre is also a key issue for FttH deployment and the report provides insight into the activities taking place in this regard in Europe. A valuable case study on the NBN proposal taking place in Australia is also provided. The report also explores the concept of smart/intelligent communities and examines which cities are at the forefront of these developments. Regional information focused on FttH developments is also provided for North America, Latin America, Europe, Middle East, Africa and Asia Pacific.

Key highlights:

·         E-health, e-education, digital media and sustainability are the key reasons why developed nations need Next Generation Networks.

·         Smart communities cannot be built from the current silo structure that dominates our thinking and require a holistic approach.

·         In terms of FttH connections, Japan continues to lead the world with around 14 million homes and businesses connected.

·         In terms of actual FttH penetration, South Korea leads with around 44%.

·         Improvements in international fibre and other infrastructure in Africa are leading to a growing number of FttH initiatives.

·         There has been substantial recent investment in next generation infrastructure in the richer countries of the Middle East. Some projects have been completed and others are moving forward rapidly.

·         Russia accounts for over half of all Eastern European FTTx subscriptions.

·         Reforms in New Zealand will create a number of Local Fibre Companies which will operate FttH access network infrastructure in specific geographic areas.

Data in this report is the latest available at the time of preparation and may not be for the current year.

The following notes provide some background to our scenario forecasting methodology:

·         This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.

·         The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.

·         All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.