FTTx Markets & Trends Facts & Figures. White Paper

Transcription

1 White Paper FTTx 2014 Markets & Trends Facts & Figures This White Paper presents excerps of deliverables included in our "Wireline" research category which covers: - A half-yearly updated FTTx dataset - A half-yearly updated state-of-fttx report - Bimonthly reports on highly topical FTTx issues - Privileged access to lead FTTx analysts

2 About IDATE Founded in 1977, IDATE has gained a reputation as a leader in tracking telecom, Internet and media markets, thanks to the skills of its teams of specialized analysts. Now, with the support of close to 40 member companies which include many of the digital economy s most influential players the newly rebranded DigiWorld Institute has entered into a new stage of its development, structured around three main areas of activity: IDATE Research, an independent observatory whose task is to keep a close and continual watch on digital world industries, collect relevant data and provide benchmark analyses on market developments and innovations in the telecom, Internet and media sectors through its comprehensive collection of market reports and market watch services. IDATE Consulting, time-tested analysis and consultancy solutions: Our multi-disciplinary teams of economists and engineers established their credibility and independence through the hundreds of research and consulting assignments they perform every year on behalf of top industry players and public authorities. DigiWorld Institute, a European forum open on the world: The DigiWorld Institute will take existing IDATE initiatives, such as the DigiWorld Summit, the DigiWorld Yearbook and the monthly clubs in Paris, London and Brussels, to the next level. Members have the opportunity to participate in think tanks on the core issues that will shape the industry s future, drawing on the knowledge of outside experts and our own teams. Copyright IDATE 2014, CS 94167, Montpellier Cedex 5, France All rights reserved. None of the contents of this publication may be reproduced, stored in a retrieval system or transmitted in any form, including electronically, without the prior written permission of IDATE. IDATE, DigiWorld, DigiWorld Institute and DigiWorld Yearbook are the international registered trademarks of IDATE.

3 Coverage of the 2014 IDATE Research Programme IDATE Research's market report programme constitutes a natural extension of the work performed by our teams of analysts, as well as our ongoing investments in information and monitoring systems for player strategies and markets in the digital economy the DigiWorld. Our research catalog is organized around four areas that cover 12 specific categories. Each of these provides insight into key markets through a comprehensive set of deliverables datasets, reports and synoptic slide decks. Future Networks Telecom Strategies Media Strategies Digital Living Wireline Wireless Telecom Players & Markets Telecom & Over-The-Top Television & Over-The-Top Video Distribution & Consumer Electronics Connected Economy Personal Data & Ad Spectrum Digital Entertainment Satellite Cloud & Infrastructure Focus on our Wireline category Our Wireline research is specifically designed to provide operators, vendors, government bodies, regulators and local authorities with a comprehensive analysis of the issues affecting this promising market. The ultra-fast broadband access market (FTTH/B, VDSL and DOCSIS combined) is expected to carry on its growth in the coming years. Naturally, the rate of progress will not be the same across the board, as each national market will be shaped by the country s intrinsic features and its players. Format Type deliverable Title Publication date Pages Price P roduct Code Wireline package 2013 includes 3-hour customized research & unmetered analyst support M 13300_1 doc Report FTTH/B European Panorama - Focus on FTTx in the UK 07/03/ M 13302IN1 doc Report NGN - Deployment costs & access market revenue 20/05/ M 13302IN2 doc Report FTTx Vendor market shares 17/06/ M 13302IN3 doc Report FTTx Services & Pricing 06/08/ M 13302IN4 doc+ppt Report Cable: solution for UFB? 18/10/ M 13310M R doc Report FTTx: National Broadband Plans 22/11/ M 13302IN5 doc Report FTTx: VDLS2/GigaDSL/FTTdp 18/12/ M 13302IN6 xls Dataset World FTTx Market - at mid-2013, forecasts up to /12/2013 n.r M 13302DB ppt Report FTTx State-of-the-Art 23/12/ M 13302SR Wireline package 2014 includes 5-hour customized research & unmetered analyst support Prices above are in EUR excl. taxes and correspond to a single-department licence (1 to 5 users) Contact: Isabel Jimenez, or [email protected] M xls Dataset World FTTx Market - data & forecasts up to 2018 June/Dec n.r M 14541B ppt Report State of FTTx worldwide June/Dec M 14542B doc + ppt Report Services over FTTx & Tariffs (indicative title) 01/04/ M 14545IN1 doc + ppt Report Vendor market shares, strategies & technologies (indicative title) 01/06/ M 14545IN2 doc + ppt Report National Broadband Plan: assessments & realities (indicative title) 01/09/ M 14545IN3 doc + ppt Report Prospects for fixed access revenues 01/10/ M 15546M R doc + ppt Report Cable dynamics (indicative title) 01/11/ M 13302IN4 IDATE

4 Foreword Valérie Chaillou, FTTx lead analyst at IDATE, notes growth perspectives remains still high when ultrafast technologies(1) represent 22% of broadband access subscriptions at mid-2013, and we expect ultrafast broadband revenues will growth by 95% over the 5 next years to reach 182 billion EUR in 2017 Eastern Europe will see its take up rate increase from 28% to 49% in 5 years, much higher than in Western Europe during all the period, from 21% at end 2012 to 32% at end FTTH/B is the leading ultrafast broadband solution, far from FTTLA then VDSL : FTTH/B represents 66% of FTTx subscriptions at mid 2013, compared to 22% for FTTLA and 12% for FTTN+VDSL But the regional breakdown is very heterogeneous - FTTH/B is clearly the technology of choice in APAC whereas - FTTLA is leading the ultrafast broadband market in Western Europe and North America. - VDSL is a technology of choice for several European incumbents. - Latin America and Middle East countries are at the very beginning of their NGA rollouts: they will participate to the global growth of ultrafast broadband more and more in the coming years. There are still questions from large players regarding the opportunity to deploy FTTH/B or VDSL, mainly in Europe. - Several parameters are to be taken into account among which, of course, the required investment. Nevertheless FTTH/B rollouts did progress in certain European countries which are encouraging at a time when EU Telcos are seeing their margins shrinking. - Some players are betting on the future capacities of copperbased networks. Compared growth of VDSL and FTTH/B subscribers, Breakdown of ultrafast broadband technologies, at mid-2013 Source: IDATE, market report "State of FTTx worldwide", December 2013 (1) For definition of ultrafast platforms we have considered here 3 main architectures: FTTH/B, FTTN and FTTLA IDATE

5 FTTH Operators ranking: 6 Asian and 4 American telcos make up the world s Top 10 Only one player involved in large FTTN+VDSL deployment among them (AT&T), then two cablecos upgrading their infrastructures to FTTLA (Comcast and TWC). 7 operators among this top 10 have choosen the FTTH/B technology. Top 10 FTTx worldwide players, at end 2013 Source: IDATE, market report "State of FTTx worldwide", December 2013 Access all data used for the article above via our multi-client FTTx dataset IDATE

6 1. VDSL2 G.Fast FTTdp Copper gets turbocharged VDSL2 & Co: ever more promising technological developments VDSL2 has begun to be implemented, and several telcos have based their ultra-fast broadband strategies squarely on copper infrastructure right up to the customer premises. If VDSL can deliver theoretical speeds of around 50 Mbps near the exchange or cabinet, Vectoring, which consists of reducing noise among the lines, makes it possible to double that speed to 100 Mbps. Bonding, meanwhile, consists of using several copper pairs, either to double speeds for users in the vicinity of the exchange, or double the distance at which a 50 Mbps connection is available. In both cases, however, performances are very quickly affected by the subscriber s distance from the exchange or cabinet. G.Fast, which is the future standard currently under examination, and due to be approved in 2014, offers even stronger noise cancellation capabilities, even with a maximum theoretical speed of 1 Gbps. Still only small-scale implementation of VDSL2 and its successors In mid-2013, customers subscribing to a VDSL2 ultra-fast broadband service represented 19% of the world s FTTH/B subscribers. The vast majority of deployments have been performed by AT&T in the United States, which is reporting 26 million VDSL2-ready households and more than 9 million subscribers. AT&T continues to bank on these solutions, and is now offering pair bonding to eligible customers. Western Europe is the second biggest VDSL market, accounting for 35% of the world s subscribers as of mid Will this drive a shift in the ultra-fast broadband market? VDSL2 and its successors have a clear set of advantages, starting with savings on rollouts. Telcos would not need to deploy optical fibre from end to end, and can use the existing last mile of their networks. They would also save on customer premises installations, which cost them a great deal of time and money. The performances offered by these new solutions appear to be coming more and more in line with those delivered by FTTH (at least in its current iteration), but only under optimal conditions. So this is not a solution that can be made available to everyone. Plus, VDSL Vectoring does not enable physical sub-loop unbundling, in which case bitstream remains the only option for sharing access to the network something that not all market players want, as is the case in France, for instance. As a result, even if the development prospects for the VDSL market remain optimistic for the coming years, we do not expect it to cause a major upheaval in the ultra-fast broadband hierarchy, with FTTH/B continuing to be the architecture of choice. Source: IDATE, market report "VDSL2 G.Fast FTTdp", December IDATE

7 2. National Broadband & Ultrafast Broadband Plans Benchmark for Europe, Asia and North America National broadband (BB) and ultra-fast broadband (UFB) plans implemented in several countries Share a common goal of deploying BB/UFB. Some countries have set very ambitious targets, in terms of both the type of system to be deployed (ultra-fast broadband) and coverage (entire population on completion). Each programme has its own particular features Some countries are focusing chiefly on deploying a network, while others are focusing more on the availability of services. Here again, the connection speeds being made available determine what the programme can deliver. So the type of service that users will be able to access will often depend on where they are located and the type of infrastructure being deployed there. Beyond their implementation of a national broadband/ultra-fast broadband plan, government involvement varies from country to country. While some are providing more or less substantial financial support, others are electing to focus more on introducing coordination, communication, collaboration, market observation or regulatory measures. A Digital Agenda that requires a national BB/UFB plan Mixed results for EU countries in achieving Digital Agenda objectives: some have not yet established a national programme, which in some instances has been unnecessary due to their market s maturity. Matrix of national broadband scheme objectives Universal UFB service DK DE NZ USA LU Sing AUS FR UK BB Infrastructure UFB Infrastructure Brz Universal BB service Source: IDATE, market report " National broadband & ultra-fast broadband plans", November IDATE

8 3. Services and pricing Positioning of FTTx offers A certain homogeneity of the offer despite some regional characteristics Schematically, the following key points can be drawn from analysis of offers at the international level: the highest speeds are offered in Asia-Pacific countries; packaged triple play type offers (telephony + Internet + TV) are far from being the general rule and are supplanted by double play, especially in Europe; the lowest prices apply in Europe and Asia-Pacific, the highest in North America and certain Middle Eastern countries. The development of offers is based primarily on the segmentation of speeds and services, then on the putting together of bundles In order to enhance their optical fibre infrastructures, operators generally choose to offer different ranges of access speeds to their customers, generally up 3 to 5 different download speeds. To this speed segmentation is added segmentation of services, in particular TV and video services. In most cases, operators offer a basic package of TV channels, which can then be added to by thematic channels, dedicated packages, video catalogues etc. Telephony is now most often seen as a commodity and players who multiply the corresponding offers are rare. Several types of telephony offer can be identified (limited or unlimited national, fixed international, including calls to mobiles or not etc.) but few operators offer several of them. The impact of the segmentation of services on the method of marketing and ultimately on prices is noticeable. Bundles are not as universal as all that and, in some countries, operators communicate separately about different services from their catalogue and may then offer package deals. Some operators go as far as to offer customers the possibility of constructing of their own personalised bundle in accordance with their needs. Innovation of services could be based on the technical possibilities of optical fibre networks Since the first deployments of FTTx type networks operators have argued about their technical performances and the benefits that they provide to end users. This has gradually resulted in the emergence of new services, most often associated with the innovative features of terminal equipment. From now on, to expand the commercial potential of FTTH/B, operators could, if not providing "exclusive FTTx" applications, rely on the other technical characteristics of FTTH/B i.e. symmetry and the possibility of guaranteed speeds, until then intended primarily for professional clients. To these can also be added latency which, when reduced, can provide high-performance access to Cloud services (for residential and small business use). Source: IDATE, market report " Services and pricing", August IDATE

9 4. Cable networks Solution for ultra-fast broadband deployment? Key findings 660 million broadband subscribers worldwide in 2012 At the end of 2012, cable accounted for 20% of the broadband market. But this market share varies considerably between regions: from more than 50% on the North American market to small and even tiny market shares on Asian markets. 317 million ultra-fast broadband ( 30 Mbps) subscribers in 2012 Globally, cable accounted for 10% of the ultra-fast broadband (UFB) market at the end of 2012, but it now has the potential for significant growth with the widespread rollout of DOCSIS 3.0 equipment. In North America, ultra-fast broadband subscribers on cable networks account for half of the UFB market and this proportion is expected to grow as a result of the steady increase in speeds offered. In Europe, cable network speeds of up to 100 Mbps have been widely deployed, but competition with VDSL and/or FTTH services is often fierce due to partial coverage in many areas. In Asia, UFB cable has been largely eclipsed by telco services. From cableco-telco duopoly to fixed-mobile convergence In addition to the head-on competition to broadband, the widespread use of IPTV by telcos and their expected OTT video offerings are emerging as a threat to cable operators' video revenues. Cable consolidation is likely to continue concurrently with cableco-telco mergers, especially in a context of fixed-mobile convergence. The broadband market in various countries, December 2012 (Thousands of subscribers) Broadband subscribers UFB subscribers ( 30 Mbps) Cable broadband subscribers Cable UFB subscribers Cable's market share As a % of broadband As a % of UFB Germany % 41% Belgium % 25% Spain % 66% France % 80% Netherlands % 66% Portugal % 42% United Kingdom % 65% Switzerland % 23% United States % 53% South Korea % 7% Source: IDATE, market report "Cable networks", October IDATE

10 5. Ranking of FTTx equipment providers China still at top in FTTx market The Asia-Pacific and North America regions are still ahead of the others in terms of FTTH/B network deployment. The two market leaders are ZTE and Huawei, together representing more than 50% of the global PON market. They are primarily involved in Asian regions where ZTE has installed more than 90% of its total OLT and ONT shipments and Huawei more than 80 %. For example, the two manufacturers are historically in partnership with such Chinese operators as China Unicom, China Telecom and China Mobile. Despite this, Alcatel-Lucent was selected by China Unicom in 2011 and by China Telecom the following year. These FTTx players are largely investing in FTTH/B networks, allowing equipment providers to increase their activities. However, even if this region remains very attractive for vendors, market growth is slowing down. At the end of the spectrum, Latin America and the Middle East are two booming regions where more and more FTTH projects have emerged recently and are in construction. Global market shares of PON OLT equipment providers in FY 2012 Source: IDATE, market report "FTTx vendor market shares", June IDATE

11 Global market shares of PON ONT/ONU equipment providers in FY 2012 The shipped PON includes equipment supporting EPON/GEPON, GPON and BPON. All types of architecture are taken into account, including FTTH and FTTB as well as FTTx+LAN. Source: IDATE, market report "FTTx vendor market shares", June 2013 Ranking of FTTx equipment providers, by region In 2012, the rankings were roughly similar compared to those in the year before. The two Chinese equipment vendors are often at the top, by region. The global market is mainly represented by the APAC situation. Indeed, fibre deployments occurred largely in this region with the major projects in China, Japan and, more recently, in New Zealand. Indonesia and Malaysia also represent strong potential in the near future. Top Five OLT PON vendors for FY 2012 Ranking Global APAC EMEA North America 1 ZTE ZTE Huawei Alcatel-Lucent 2 Huawei Huawei Alcatel-Lucent Calix-Ericsson 3 Alcatel-Lucent FiberHome ZTE Adtran 4 FiberHome Alcatel-Lucent Calix-Ericsson Zhone 5 Sumitomo Sumitomo - - Source: IDATE, market report "FTTx vendor market shares", June 2013 Top Five ONT/ONU PON vendors for FY 2012 Ranking Global APAC EMEA North America 1 Huawei Huawei Huawei Alcatel-Lucent 2 ZTE ZTE Alcatel-Lucent Calix-Ericsson 3 Alcatel-Lucent Alcatel-Lucent ZTE Adtran 4 FiberHome FiberHome Calix/Ericsson Zhone 5 Mitsubishi Mitsubishi - - Source: IDATE, market report "FTTx vendor market shares", June IDATE

12 World FTTx Market Our FTTx Team A dedicated team of consultants specialised in analysis of the FTTx sector, devoted to meeting the needs of the broadcasting industry, operators, equipment manufacturers, service providers and content providers. Roland MONTAGNE Telecom Business Unit Director [email protected] +33(0) Valérie CHAILLOU FTTx Access Markets & Services Roland Montagne joined IDATE in 1998 and is now the Director of the Telecom Business Unit. Since 2004, Roland has been the project leader for the FTTH Council Europe's yearly European FTTH project panorama. In 2006, he conducted a major study for the French Government on FTTH deployment scenarios in France (cost model and government options). Roland has also performed several strategic analyses on the development of the American and Asian FTTH markets, on behalf of the FTTH Council APAC, among others. He has also been involved in FTTH cost model analysis for the United Kingdom, and in a recent study that examines the maturity of next-generation PON technologies. Roland is a regular speaker at major International conferences on FTTx-related topics (FTTH Council Europe, US, AsiaPacific, IEC Broadband World Forum, IEC C5, DigiWorld Summit, IIR & Informa events). Didier POUILLOT Cost & Business Models Tiana RAMAHANDRY Telecom Equipment Virginie BLACHERE Broadband Access Markets IDATE becomes the DigiWorld Institute Founded in 1977, IDATE has gained a reputation as a leader in tracking telecom, Internet and media markets, thanks to the skills of its teams of specialized analysts. Now, with the support of close to 40 member companies who include many of the digital economy s most Jeremy George influential players the newly rebranded DigiWorld Institute has entered into a new stage of its [email protected] development, structured around three main areas of activity: Tel: +33 (0) A European forum open on the world: The DigiWorld Institute will take existing IDATE initiatives, such as DigiWorld Summit, and the monthly clubs in Paris, London and Brussels, to the next level. An independent observatory: The DigiWorld Institute will keep a close and continual watch on digital world industries, collect relevant data and provide benchmark analyses on market developments and innovations in the telecom, Internet and media sectors through its DigiWorld Yearbook and the DigiWorld Economic Journal, along with its comprehensive collection of market reports and market watch services that are published and made available online throughout the year. Time-tested analysis and consultancy solutions: The DigiWorld Institute established its credibility and independence by building multi-disciplinary teams of economists and engineers who regularly perform bespoke research and analysis on behalf of topflight industry players and public authorities. We have also built a solid reputation in managing think tanks on the outstanding developments that are shaping the industry s future, drawing on the skills and knowledge of our members, our teams and outside experts. Sales contact: Our clients include: > NRAs and Public Authorities: Arcep CMT FTTH Council Asia-Pacific FTTH Council Europe NMMH Ofcom (UK) PT Luxembourg Red.es TRA > Vendors: Alcatel-Lucent Fujitsu Huawei Panasonic Reichle & De-Massari Samsung FO TE Connectivity ZTE > Operators: Deutsche Telekom Etisalat Maroc Telecom NBNCo NTT Orange SFR SES Swisscom Telefónica Telecom Italia... BP Montpellier Cedex 5 Tel: +33(0) Fax: +33(0) [email protected] -