FTTx roll-out and capex worldwide: forecasts and analysis

Transcription

1 Research Forecast Report FTTx roll-out and capex worldwide: forecasts and analysis June 2014 Rupert Wood

2 2 Contents Slide no. 8. Executive summary 9. Executive summary 10. Key implications 11. Key implications [1] 12. Key implications [2] 13. Key implications [3] 14. Market definition 15. Geographical scope: Forecasts are provided for 57 countries in 7 regions 16. Definitions 17. Forecasts 18. More than two in five premises worldwide will have access to an FTTx connection by There will be more than 245 million FTTH connections and 235 million other FTTx connections worldwide by Western Europe: End of Western Europe: Forecast for Central and Eastern Europe: End of Central and Eastern Europe: Forecast for North America and developed Asia Pacific: End of North America and developed Asia Pacific: Forecast for 2019 Slide no. 26. Key countries in other regions: End of Key countries in other regions: Forecast for Highest levels of coverage, FTTx 29. Highest levels of coverage, FTTH 30. Highest levels of penetration, FTTx and cable 31. Highest levels of penetration, FTTH 32. The highest levels of capex in developed economies will be in Western Europe 33. Business environment and network options 34. The business environment for fixed NGA has changed a great deal in the past 12 months 35. Conversion rates on fibre-based services are improving 36. There is a needs-based case for speeds above 30Mbps and up to 1Gbps 37. In Europe, cable broadband is gaining market share of fixed broadband connections at the expense of telcos 38. FTTx roll-out tends to follow cable 39. In mature markets, larger mobile operators are taking a strategic interest in fibre access 40. We expect some mobile operators in developing economies to reconsider investment in fibre access

3 3 Contents Slide no. 41. Utilities and third entrants are appearing in greater numbers in the FTTx markets in developed countries 42. LTE solutions for fixed coverage have severe limitations, and some national broadband plans now recognise this 43. Update on FTTC/VDSL/vectoring 44. Update on FTTB/dp/VDSL 45. Update on G.fast 46. Update on FTTH 47. Maximising coverage for given capex is causing a rethink of old assumptions 48. Update on capex model 49. Top-level breakdown of the relative costs of FTTx technologies: basic topologies 50. Top-level breakdown of the relative costs of FTTx technologies: assumptions for FTTC/VDSL and FTTB/VDSL 51. Top-level breakdown of the relative costs of FTTx technologies: assumptions for FTTH/GPON and FTTH/PTP 52. Our baseline assumption is that FTTH/GPON costs four times more to pass and connect than FTTC/VDSL Slide no. 53. The relative cost to pass a premises with FTTH compared to the cost to pass with FTTC will decline 54. The model considers the increasing incremental costs of roll-out to lessfavourable demographics and topographies 55. However, we recognise that roll-out decisions are increasingly based on other factors as well as cost 56. The model also takes into account the cost variances between countries 57. The cost to roll out a horizontal FTTH/GPON network varies mainly according to labour costs 58. The cost to roll out an FTTC/VDSL network varies mainly according to labour costs and the number of lines per cabinet 59. About the author and Analysys Mason 60. About the author 61. About Analysys Mason 62. Research from Analysys Mason 63. Consulting from Analysys Mason

4 4 List of figures Figure 1: Summary of report coverage Figure 2: FTTx capex by region, to 2019 Figure 3: FTTH roll-out and take-up by region, 2019 Figure 4: FTTx roll-out and take-up by region, 2019 Figure 5: Countries covered in this report, by region Figure 6: Definitions used in this report Figure 7: FTTH coverage, by region, Figure 8: FTTx coverage, by region, Figure 9: NGA and non-nga fixed broadband connections, by technology, worldwide, Figure 10: FTTH connections, by region, Figure 11: FTTx connections, by region, Figure 12: FTTH roll-out and take-up by country, Western Europe, 2013 Figure 13: FTTx roll-out and take-up by country, Western Europe, 2013 Figure 14: FTTx capex by country, Western Europe, to 2019 Figure 15: FTTH roll-out and take-up by country, Western Europe, 2019 Figure 16: FTTx roll-out and take-up by country, Western Europe, 2019 Figure 17: FTTH roll-out and take-up by country, Central and Eastern Europe, 2013 Figure 18: FTTx roll-out and take-up by country, Central and Eastern Europe, 2013 Figure 19: FTTx capex by country, Central and Eastern Europe, to 2019 Figure 20: FTTH roll-out and take-up by country, Central and Eastern Europe, 2019 Figure 21: FTTx roll-out and take-up by country, Central and Eastern Europe, 2019 Figure 22: FTTH roll-out and take-up by country, North America and developed Asia Pacific, 2013 Figure 23: FTTx roll-out and take-up by country, North America and developed Asia Pacific, 2013 Figure 24: FTTx capex by country, North America and developed Asia Pacific, to 2019 Figure 25: FTTH roll-out and take-up by country, North America and developed Asia Pacific, 2019 Figure 26: FTTx roll-out and take-up by country, North America and developed Asia Pacific, 2019 Figure 27: FTTH roll-out and take-up, key countries in emerging regions, 2013 Figure 28: FTTx roll-out and take-up, key countries in emerging regions, 2013 Figure 29: FTTx capex by country, key countries in emerging regions, to 2019 Figure 30: FTTH roll-out and take-up, key countries in emerging regions, emerging markets, 2019 Figure 31: FTTx roll-out and take-up, key countries in emerging regions, 2019 Figure 32: FTTx coverage as a percentage of total premises by country, worldwide, 2019 Figure 33: FTTH coverage as a percentage of total premises by country, worldwide, 2019

5 5 List of figures [2] Figure 34: FTTx plus cable broadband connections as a percentage of total premises by country, worldwide, 2019 Figure 35: FTTH connections as a percentage of total premises by country, worldwide, 2019 Figure 36: FTTx capex by region, to 2019 Figure 37: FTTx capex by region, Figure 38: Change in fixed broadband and mobile service revenue by region, worldwide, Figure 39: CAGR of fixed broadband and mobile service revenue by region, worldwide, Figure 40: Conversion rates (premises with active connections / premises passed), selected operators, 4Q 2013 Figure 41: Selected forecasts of high-end access speeds required based on services, four scenarios Figure 42: Change in cable operators share of fixed broadband connections by country, 4Q Q 2013 Figure 43: Cable Internet versus FTTx coverage, year-end 2013 Figure 44: Percentage change in revenue by country, Europe, 4Q Q 2013 Figure 45: FTTx plus cable take-up versus GDP per capita by region Figure 46: Countries where incumbents use FTTC/VDSL as their main NGA technology, and commercial vectoring status, Europe, June 2014 Figure 45: Old and new models for FTTx deployment Figure 46: Basic overview of NGA network topologies and elements Figure 47: Baseline capital unit cost assumptions, FTTC/VDSL and FTTB/VDSL Figure 48: Baseline capital unit cost assumptions, FTTH/GPON and FTTH/PTP Figure 49: Baseline assumptions on cost per premises passed and connected, a developed market, 2014 Figure 50: Cost per home passed and per connection by technology, Figure 51: Cost to pass a home with FTTC/VDSL, FTTB/VDSL and FTTH/GPON, by decile of housing density, medium-sized country, 2014 Figure 52: Example of roll-out modelling from core capex model Figure 53: Relative costs to roll out a horizontal FTTH/GPON network by country, worldwide, 2013 Figure 54: Relative costs to roll out an FTTC/VDSL network by country, worldwide, 2013

6 6 About this report Executive summary Key implications Market definition Forecasts Business environment and network options Update on capex model About the author and Analysys Mason

7 7 About this report This report provides: Figure 1: Summary of report coverage [Source: Analysys Mason, 2014] a 5-year forecast of coverage, take-up and capex split by four FTTx technology options (FTTC/VDSL, FTTB/dp/VDSL, FTTB/LAN and FTTH), plus DOCSIS3.0+ and VDSL-CO in 57 countries and 7 regions an assessment of the business environment, the technology drivers and the cost trends behind our forecasts key implications and recommendations for operators in the region. The forecast levels of capex are what we consider the most likely outcome based on operators current thinking. The model can serve several other functions beyond the immediate scope of this report. It can be used to provide the costs of alternative scenarios, for example: different mixes of technologies, different demand profiles in different geotypes, different completion dates. If you wish to explore these options, please contact the author. For the complete data set, see the accompanying Excel file at Geographical coverage Regions modelled: North America (NA) Western Europe (WE) Central and Eastern Europe (CEE) Developed Asia Pacific (DVAP) Emerging Asia Pacific (EMAP) Latin America (LATAM) Middle East and Africa (MEA) Individual countries added in this update Countries added in this update: Central and Eastern Europe Croatia Developed Asia Pacific Hong Kong Taiwan Emerging Asia Pacific Thailand Middle East and Africa Algeria Kuwait Morocco Oman Qatar South Africa See the Geographical scope slide for a complete list of the individual countries covered. Data series Premises passed Premises passed as a proportion of total premises Premises connected Premises connected as a proportion of premised passed and total premises Capex (cumulative): total, network and connections All data is split by six technologies: DOCSIS3.0+ FTTB/LAN FTTB/dp/VDSL FTTC/VDSL FTTH VDSL-CO

8 8 About this report Executive summary Key implications Market definition Forecasts Business environment and network options Update on capex model About the author and Analysys Mason

9 UAE Qatar Singapore Israel UK South Korea Belgium Iceland Taiwan Japan Ireland Denmark Switzerland Hong Kong Canada Netherlands Italy Germany Lithuania Kuwait France Sweden Finland Portugal China Romania USA Turkey Norway Russia Estonia Australia Slovenia Croatia Bulgaria Spain Latvia Malaysia Poland Slovakia Argentina Greece Austria Saudi Arabia Brazil Thailand Czech Republic Indonesia Mexico Morocco Hungary Ukraine Oman South Africa India Algeria Egypt Percentage of premises FTTx roll-out and capex worldwide: forecasts and analysis Highest levels of coverage, FTTx Figure 32: FTTx coverage as a percentage of total premises by country, worldwide, 2019 [Source: Analysys Mason, 2014] 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% North America Western Europe Central and Eastern Europe Developed Asia Pacific Emerging Asia Pacific Latin America The Middle East and Africa

10 NA WE CEE DVAP EMAP LATAM MEA Worldwide CAGR NA WE CEE DVAP EMAP LATAM MEA Worldwide Percentage change FTTx roll-out and capex worldwide: forecasts and analysis The business environment for fixed NGA has changed a great deal in the past 12 months The general economic environment has improved in key regions such as Europe. Revenue trends for fixed broadband, particularly NGA, are strong, and significantly stronger than those of mobile (see Figure 36). We forecast stronger growth in fixed broadband than mobile in every region until 2019 (see Figure 37). (Mobile revenue is nevertheless about four times greater than broadband.) For incumbent operators, cable is an ever-increasing threat creating greater incentive to invest. In North America and developed Asia Pacific, the environment is different. Fixed investment among integrated plays was a low priority until recently. In the USA, Google Fiber is causing AT&T and Tier 2 incumbents to invest in fixed access. In developed Asia Pacific, FTTB and FTTH coverage is already high, and future investment may be limited to upgrades from FTTB to FTTH and from earlier lower-capacity PONs to next-generation PONs. Investment in fixed infrastructure has tended to be a low priority in emerging markets. Some of the negative trends that affect mobile in Europe are also emerging, and some operators see opportunities in developing fibre, particularly where new-build and a growing middle class improve the business case. Several high-profile roll-outs, such as the HSBB project in Malaysia, indicate that take-up can be very good. Figure 38: Change in fixed broadband and mobile service revenue by region, worldwide, [Source: Analysys Mason, 2014] 20% 15% 10% 5% 0% 5% 10% Fixed broadband Mobile Figure 39: CAGR of fixed broadband and mobile service revenue by region, worldwide, [Source: Analysys Mason, 2014] 20% 15% 10% 5% 0% 5% 10% Fixed broadband Mobile

11 59 About this report Executive summary Key implications Market definition Forecasts Business environment and network options Update on capex model About the author and Analysys Mason

12 60 About the author Rupert Wood (Principal Analyst) is the lead analyst for Analysys Mason s Fixed Networks research programme. His primary areas of specialisation include next-generation networks, long-term industry strategy and forecasting the dynamics of convergence and substitution across fixed and mobile platforms. Rupert regularly contributes to the international press on a wide range of telecoms subjects and has been quoted by The Times, The Economist, Business Week, Telecommunications Online and La Tribune. Rupert has a PhD from the University of Cambridge, where he was a Lecturer before joining Analysys Mason.

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