Light Reading
Even in a tough economy, analysts see Asia as the world's hope for continued fiber access growth

Asia's High Fiber Diet

Phil Harvey
News Analysis
Phil Harvey
2/20/2009
50%
50%

Even in a soft economy, a look at the fiber-to-the-home (FTTH) infrastructure scene suggests that Asia's countries will continue to reach the most people with the fastest networks in the years to come.

In December, Pyramid Research predicted that FTTB/FTTH operators would pass around 212 million homes by the end of 2013, which is only about 12 percent of all households globally. But Asia stands out because of how aggressively its countries are passing homes with fiber.

According to the Pyramid report, "Fiber in the Last Mile", South Korea's KT Corp. plans to cover 90 percent of its access lines with FTTH by next year. Meanwhile, Japanese regulator Ministry of Public Management, Home Affairs, Posts, and Telecommunications plans to have 90 percent of all homes covered by fiber networks by the end of next year, too.

Pyramid Research estimates that the Asia/Pacific region had more than 68 million homes passed by fiber infrastructure at the end of 2008. Nearly 25 million households throughout Asia/Pacific subscribe to a fiber-based service. So Asia/Pac countries represent about 78 percent of all residential FTTH connections across the planet.

South Korea, Hong Kong, Japan, and Taiwan have the highest proportion of households connected to fiber networks globally.

In South Korea, which has telecom giant KT and challenger SK Broadband, penetration stands at 40 percent, making it the top FTTH market internationally, according to Pyramid's data.

Japan, NTT Group (NYSE: NTT)'s home, and Hong Kong, home of PCCW Ltd. (NYSE: PCW; Hong Kong: 0008) and Hong Kong Broadband Network Ltd. (HKBN) , each boast fiber penetrations above 20 percent.

During the next five years, additional network upgrades in five Asian markets (Japan, South Korea, China, Hong Kong, and Taiwan) will increase penetration to 122 million homes passed, the Pyramid report states.

Along with broadband and voice, fiber networks are supporting a growing slate of IPTV services, and again Asia dominates this space. Using ITU data, Light Reading's recent report -- IPTV in the USA -- found that Asia accounted for about one third of the world's 10 million IPTV subscribers at the end of 2007. International Editor Ray Le Maistre gives more perspective on Asia's IPTV scene in this report:

.

Of course, Asia's IPTV success is hardly surprising, given that the region dominates most other telecom services categories these days. (See Top 10 Telecom Markets: Asia.)

Pyramid's report says Mumbai and Delhi in India are tops on the list of large cities that are ripe for fiber investment. Why? The population of those cities is large and getting larger, and the number of well-off families has increased dramatically in recent years, as noted in the 2008 documentary, Web Wide World - India.

If emerging economies do make for a fertile FTTH field, China and India are worth watching as they sport some of the highest projected GDP growth rates on Earth, according to urban affairs think tank, City Mayors:

Table 1: China & India: Where the Growth's At

City/urban area Country Est. GDP in 2020 in US$B Est. annual growth 2005-2020
Guangzhou China 227 6.90%
Changchun China 42 6.90%
Beijing China 259 6.60%
Surat India 57 6.50%
Shanghai China 360 6.50%
Jaipur India 38 6.40%
Wuhan China 96 6.40%
Xian China 48 6.40%
Pune India 76 6.30%
Kanpur India 41 6.30%
Lucknow India 35 6.30%
Tianjin China 112 6.30%
Chongqing China 87 6.30%
Shenyang China 68 6.30%
Chengdu China 51 6.30%
Delhi India 229 6.20%
Bangalore India 110 6.20%
Ahmadabad India 78 6.20%
Hyderabad India 92 6.10%
Mumbai India 300 6.00%
Chennai India 91 6.00%
Kolkata India 224 5.90%
Hong Kong China 407 3.50%
Source: City Mayors




— Michael Hopkins, Special to Light Reading

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