Yano Reports on FTTH

TOKYO -- Yano Research Institute Ltd. (YANO), a leading marketing research and consulting firm in Japan, has conducted comprehensive research on the FTTH (Fiber To The Home) market in Japan and compiled a report in which a rapidly growing FTTH subscriber line market and FTTH system market have been reconfirmed.

According to the report, "FTTH MARKET IN JAPAN AND ITS FUTURE PROSPECTS 2005," published by YANO, the breakdown of Internet access line subscriptions by type of connection shows; 13.67 million lines of DSL, 2.77 million of FTTH, 2.96 million of CATV Internet and 30 thousand of FWA at the end of FY2004. In the latter half of 2004, the net monthly increase of FTTH subscriber lines came close to that of DSL, both hovering at the level of somewhere between 100 thousand to 150 thousand lines. The net monthly increase of FTTH subscriptions is expected to surpass the increase of DSL in early part of 2005.

The rapid expansion of the FTTH market has been mainly driven by tough competition among the FTTH service providers, many offering fee-free services for the first several months of subscription period and free cable work and activation services to lessen customers' burden of initial costs on top of lowered subscription fees. It is now a question of the financial strength of each service provider to successfully survive. Another factor, besides higher data transmission rate, that has made FTTH popular is the provision of new services being offered, a package called "triple play" to include IP phone and video distribution together with the Internet access service.

As the FTTH (service) market has expanded, the FTTH systems market has consequently grown since communication carriers have to invest more in optical transmission equipment and devices to service the growing number of customers and to improve the efficiency of their system. A PON (Passive Optical Network) system exhibited the most remarkable growth among various systems markets due to its contribution in lowering the cost of service providers. GE-PON (Gigabit Ethernet-Passive Optical Network) system has played a leading role in forming a PON system market of 47 billion yen.

Yano Research Institute Ltd.