Fiber-to-the-Home Council North America
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1 Fiber-to-the-Home Council North America North American FTTH/FTTP Deployment Status Presented by: Michael C. Render
2 Market research objective: High accuracy
3 Vendor information and interviews (nearly all) Provider information and detailed interviews (over 1/3) Consumer input (initial 100K panel)
4 Background: Broadband is growing.
5 Current Status Of U.S. Internet Use No Internet 22% Dial-up only 17% Broadband 61% RVALLC 2008
6 U.S. Broadband Penetration Estimates From Various Market Research Sources 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0%. Other Other Other Other RVA FCC Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 RVALLC 2008 Notes: Other market research sources from public releases. FCC data before 2005 includes small business. Linear trends filled between data points.
7 FTTH is growing.
8 (Fiber all the way to the living unit used for services such as television, Internet, telephone, security, and meter reading)
9 16,000,000 FTTH Homes Passed (Cumulative North America) 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 13,825,000 11,763,000 9,552,300 8,003,000 6,099,000 4,000,000 4,089,000 2,696,846 2,000,000 19,400 72, ,300 1,619, ,000 0 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 RVALLC 2008 Note: Over 98% in US RVALLC 2007
10 14,000,000 FTTH Homes Marketed (Cumulative North America) 12,000,000 10,000,000 8,000,000 12,369,000 10,382,065 7,996,400 6,643,000 6,000,000 5,079,999 4,000,000 3,218,600 2,000,000 1,754,300 19,400 72, , , ,221 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Oct-08 RVALLC 2008 Note: Over 98% in US RVALLC 2007
11 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 FTTH Homes Connected (Cumulative North America) 1,478,597 3,760,000 2,912,500 2,142,000 1,000,000 1,011, , ,500 22,500 64, , , , ,500 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 RVALLC 2008 Note: Over 98% in US RVALLC 2007
12 2,500,000 2,250,000 2,000,000 1,750,000 1,500,000 1,250,000 1,000,000 FTTH Video Homes Connected (Cumulative North America) 2,195,000 1,641,000 1,054, , , , ,925 Sep-01 Mar-02 9,675 Sep-02 Mar-03 Sep-03 37,500 Mar-04 Sep-04 Mar-05 Sep , , , ,000 87, ,400 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 RVALLC 2008 RVALLC 2007
13 Year-to-Year Growth In Homes Connected (12 month averages) 400% 350% 300% 250% Copper Coax Fiber 200% 150% 100% 50% 0% Note: Years since start of installations RVALLC 2008
14 North American FTTH penetration is increasing.
15 Sep-08 Mar-08 14% 12% 10% 8% 6% 4% 2% 0% FTTH Penetration (Cumulative United States) Passed Connected RVALLC 2008 RVALLC 2007 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Sep-02 Mar-02 Sep-01
16 US GLOBAL RANK -2 nd in actual number of true FTTH connections -Approximately 4 th in true FTTH penetration -Approximately 8 th in fiber to the building penetration
17 North American FTTH penetration is not evenly distributed. - Most US FTTH growth (over 7% connected) is in area covered by Verizon and independent ILECs (approximately one third of the US) - Canadian, Mexican, and Caribbean growth has been slow, but is beginning to accelerate
18 FTTH take-rates are growing.
19 Overall Take-Rate For FTTH (Cumulative North America) 50% 40% 30% 20% 10% 0% Sep-01 Mar % 34.5% 29.0% 31.2% 28.4% 41.3% 35.4% 30.4% 28.8% 26.0% 26.8% 22.3% 20.8%19.9% 18.4% Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Notes: Percent of all homes-marketed taking something over fiber. Take-rates dropped for a time as Verizon built infrastructure much faster than homes were connected. RVALLC 2008 RVALLC 2007
20 Take-Rates Vary By Provider Type CLEC in competitive area about 29% RBOC in competitive area about 35% Small / mid size municipality (retail) about 54% CLEC in underserved area about 55% Rural ILEC about 58% Development about 80%
21 FTTH Myth Busters
22 We will never, in our lifetime, use 7 Mbps to the home. That is like connecting a water main to every home. (Circa 2002) FTTH is a poor investment. There is nothing FTTH can do that DSL or cable modem can t t do. (Circa 2004) There is nothing FTTH can do that FTTN can t t do. (Circa 2006)
23 FTTH Median Tested Download Internet Speed (Mpbs) Mar-06 Mar-07 Mar-08 Mar-09 (All Broadband was 1.9Mbps in June 2007 per CWA using a non scientific sample) RVALLC 2008 RVALLC 2007
24 Average Number Of HD And DVR Devices In FTTH Homes RVALLC 2008
25 Internet Customer Satisfaction Comparison With Other Services (Those somewhat or very satisfied) FTTH 86% Cable Modem* 66% DSL* 60% Dial-up* 30% 0% 20% 40% 60% 80% 100% * From 2006 data RVALLC 2008
26 Selected Advanced Customer Uses Of FTTH High definition television 43% Video-on-demand services 32% Full length movie downloads 26% Online gaming 21% Home business assisted by FTTH* 7% Two-way video conferencing 3% 0% 10% 20% 30% 40% 50% * Home businesses more efficient or only possible with FTTH RVALLC 2008
27 Percent Believing Future Non Entertainment FTTH Applications Are Important Among Those Under 35 Viewing advanced websites with full screen video pages 43% Switching between TV, Internet, and phone with one device 41% Monitoring home or pets via video while away 35% Work from home with more speed/video conferencing, etc. 29% Making two-way "video calls" (high quality picture) 27% Advanced online shopping (enhanced viewing, etc.) 24% Advanced online college opportunities (lecture on demand, etc.) 21% Online face-to-face visits with doctors and nurses 20% 0% 10% 20% 30% 40% 50% RVALLC 2008
28 Percent Believing Future Non Entertainment FTTH Applications Are Important Among Those 55 And Over Online face-to-face visits with doctors and nurses 32% Switching between TV, Internet, and phone with one device Viewing advanced websites with full screen video pages 27% 29% Monitoring home or pets via video while away 23% Making two-way "video calls" (high quality picture) 21% Advanced online shopping (enhanced viewing, etc.) Work from home with more speed/video conferencing, etc. 20% 19% Advanced online college opportunities (lecture on demand, etc.) 17% 0% 10% 20% 30% 40% 50% RVALLC 2008
29 Examples Of Life Changing FTTH Applications Simply Not Possible With Any Other Infrastructure Teachers utilizing two-way video conferencing from home to teach Korean students English (in off hours, i.e. time difference) (Powell, Wyoming) Scientist working as a NASA consultant from a rural location (Washington state) Elementary student requiring isolation for a rare skin disease being able to participate in local class work via two-way video. (Salem, IL)
30 More Myth Busters
31 The business case is limited. It will never work for overbuilds. The business case is limited. It will never work for rural areas. The business case is limited. It will never work in U.S. multi-tenant tenant buildings. The business case is limited. It will never work for a third competitor.
32 North American FTTH The Future looks bright
33 Fiber-to-the-Home Council North America North American FTTH/FTTP Deployment Status Presented by: Michael C. Render
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