IDATE DigiWorld - FTTH global perspective 241017 Lessons to be learned

1. FTTH Global Perspectives
Lessons to be learned
Broadband Forum Access Summit – Berlin, October 24th 2017
 Contact
Roland MONTAGNE
Principle Analyst
Director DigiWorld Institute UK
r.montagne@idate.org

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1. FTTx Worldwide Key Trends 3
2. Major Players Worldwide 7
3. FTTH…
3.1. ... in Europe 11
3.2. ... in LATAM 21
3.3. ... in APAC 28
3.4. …and now in Sub Saharan Africa 36
4. Drivers for Fibre: The Gigabit Race, Short Latency and 4K / 8K ! 43
5. Conclusion: Why NG PON 2 now? G.Fast Drivers 49
Agenda

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1. FTTx Worldwide Key Trends
FTTH Global Perspective: Lessons to be learned

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FTTx Worldwide key trends
> Superfast technologies(1) represented nearly 48% of
broadband access subscriptions at end 2016, 9 points more
than one year before.
> FTTH/B is still the leading superfast broadband solution, far
ahead of FTTx/D3.0, followed by VDSL
FTTH/B represented 68% of FTTx subscriptions at end 2016. Growth of
FTTH/B subscriptions will continue until 2021.
FTTx/D3.0 represented at end 2016, 20% of FTTx subscriptions. After two
years of significant growth, proportion of FTTx/D3.0 on Superfast
Broadband is levelling off.
VDSL, for its part, lagged behind, representing 12% of subscriptions at
June 2016 . This proportion is quite stable.
> The regional breakdown is very heterogeneous
No huge changes in the geographical predominance of APAC on the
FTTH/B market.
FTTH/B is also the main deployed technology in MENA. It was the case
also in LATAM, but now it is meeting stronger competition from VDSL
technologies in the region (especially in Brazil).
FTTx/D3.0 is still dominant in North America and is by and large growing
more rapidly than other technologies.
There is considerable space for VDSL and other copper based
technologies such as G.Fast in Europe, where incumbents still wish to
optimise their copper networks.
(1) For the definition of superfast platforms we have considered here three main architectures: FTTH/B,
FTTN and FTTx/D3.0 deployed by cable operators
Breakdown of superfast broadband technologies, as of December 2016
Source: IDATE DigiWorld, World FTTx market, August 2017

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Breakdown of Superfast broadband technologies
Geographical breakdown of the three main superfast broadband architectures, at December 2016
Source: IDATE DigiWorld, World FTTx market, August 2017
VDSL: 62 million subscribers (1) FTTH/B: 342 million subscribers FTTx/D3.0: 101 million subscribers
505 million FTTx
subscribers Worldwide
at end 2016
MEA = Middle East and Africa; LATAM = Latin America; APAC = Asia-Pacific; NA = North America; EUR = Western + Eastern Europe
(1) 11.8 M FTTx°+LAN subscribers in China are not taken into account.

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Leading countries, by FTTx solutions at December 2016
> China , leader on worldwide FTTH/B market
Until end-2012, Japan was the most advanced FTTH/B market in the world.
Chinese players are increasingly focused on FTTH/B and, as the largest country in
the world, it will remain the leading market for the near future. The number of
FTTH/B subscribers has already significantly risen since 2014.
China and Japan are followed by Russia, which is ahead of South Korea, while the
USA is ranked 5th worldwide.
Elsewhere in the world it is worth noting that FTTH/B is the only architecture
deployed, such as in Gulf Cooperation Countries (GCC) or the MENA region.
> Strong competition from VDSL technologies in North America,
Europe and also in LATAM
The promise of VDSL-based technologies has convinced several European
incumbents to bet on the potential of their copper networks.
However, as these deployments will concern limited areas, VDSL will not overtake
the two other major FTTx architectures at a worldwide scale.
It can be noted that VDSL is the main architecture deployed in Brazil
(17.2 million homes passed and 3.87 million subscribers) and in Israel (2.3 million
homes passed and 1.5 million subscribers) the only two countries in their own region
to deploy this solution on a large scale.
> FTTx/Docsis 3.0 is the technology implemented by MSOs
The US market is clearly ahead of any other in the world concerning Docsis 3.0.
Cablecos are implementing Docsis 3.0, expanding also fibre closer to homes, in
order to provide higher speed rates. In general, cablecos do not plan to expand their
geographical footprint (with a few exceptions for those who decide to deploy FTTH).
In the coming months they will focus on updating their existing networks with Doscis
3.1. with a few exceptions betting on FTTH.
European MSOs have completed also the upgrade of their networks, thus entering
the Top 5, like Germany and the UK.
"Top 5" FTTH/B countries at December 2016
(‘000 subscribers)
"Top 5" VDSL countries at December 2016
(‘000 subscribers)
"Top 5" FTTx/D3.0 countries at December 2016
(‘000 subscribers)
Source: IDATE DigiWorld, World FTTx market, August 2017
Source: IDATE DigiWorld, World FTTx market, August 2017
Source: IDATE DigiWorld, World FTTx market, August 2017

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3.1. FTTH in Europe
FTTH Global Perspective: Lessons to be learned

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FTTH/B figures at September 2016
There were more than 44.3 million FTTH/B subscribers
and nearly 148 million FTTH/B Homes Passed in EU39 at September 2016
Subscribers = 49%
Home passed = 52%
EU 28
Subscribers = 43%
Home passed =36%
CIS

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General ranking : FTTH/B coverage
Average FTTH/B coverage*: EU39  45%
EU28  33%
(*) Number of HP/total number of Households
Top 10 countries in coverage at September 2016
Source: IDATE DigiWorld for FTTH Council Europe

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General ranking: FTTH/B Subscribers
•9 countries with 1 M subscribers or more in EU39 (5 countries in EU28, in red on the map))
•Strong growth in Spain, Belarus, Finland and Portugal
•Dynamism to highlight in France and Italy
Countries with 2 M HP or more at Sept 2016 [Top 5 Growth rates for 9 first months 2016]
(million)
Source: IDATE DigiWorld for FTTH Council Europe

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General ranking : FTTH/B take-up rate
Average FTTH/B take up rate (*): EU39  30%
EU28  28%
(*) Take up rate = number of subscribers / number of Homes Passed
Top 10 countries of more than 200 K subs in take-up rate at
September 2016
Source: IDATE DigiWorld for FTTH Council Europe

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European ranking
•The European Ranking includes countries of more than 200 K HH where the part of FTTH/B subs in the total
number of HH is at least 1%
•Only 12/31 European countries with a penetration rate > 20%
Source: IDATE DigiWorld for FTTH Council Europe

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3.2. FTTH in LATAM
FTTH Global Perspective: Lessons to be learned

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Alternative operators leadership in LATAM
> A positive evolution: 82 FTTx projects in the region
> Players different from incumbents have deployed fibre in a dynamic way from 2015 to September 2016
covering with fibre more homes:
•Municipalities / Power Utilities have grown 33%
•Alternative operators growth: 19%
•Incumbents: Growth rate about 5%
Incumbents:
4 161 000
FTTH/B
Homes
Passed
Municipalitie
s / Utilities:
190 800
FTTH/B
Homes
Passed
Alternative
Operators:
18 987 187
FTTH/B
Homes
Passed
Source: IDATE DigiWorld for FTTH LATAM Chapter

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Global FTTH figures for LATAM
> FTTH/B is taking a bigger place in the LATAM Market due to a positive evolution in the deployment and
user’s adoption…
4 552 698
FTTH/B
subscribers
by Sept. 2016
in LATAM
23 352 987
FTTH/B
Homes
Passed by
Sept. 2016 in
LATAM
19.5%
FTTH/B Take
up rate by
Sept. 2016 in
LATAM
25% growth
from 2015
18% growth
from 2015
+1.4 points
from December 2015
Take up rate = FTTH-B subs / Total FTTH-B Home Passed
Source: IDATE DigiWorld for FTTH LATAM Chapter

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FTTH subscribers per countries for LATAM
> … it can be also appreciated a good evolution in lower scale markets such as Jamaica, Trinidad,
Barbados and Peru…
Source: IDATE DigiWorld for FTTH LATAM Chapter

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3.3. FTTH in APAC
FTTH Global Perspective: Lessons to be learned

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FTTH/B is taking a bigger place in the APAC Market due to a positive
evolution in the deployment and specially in the user’s adoption
Source: IDATE for FTTH Council APAC
297.8 million
FTTH/B
subscribers
by Dec. 2016
in APAC
436.5 million
FTTH/B
Homes
Passed by
Dec. 2016 in
APAC
68% growth
from 2015
12.5% growth
from 2015
68%
FTTH/B Take
up rate by
Dec. 2016 in
APAC
> + 20 points from
December 2015
Take up rate = FTTH-B subs / Total FTTH-B Homes Passed

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Total FTTH/B Homes Passed by country
The Top-4: China is N0 1 by far due to the size of its market. Even though, countries like Japan, South Korea and
Indonesia have reached 50 or more than 10 million homes passed with FTTH/B networks
Also it can be observed 10 countries that have deployed FTTH/B networks passing more than 1 million homes
7.6 7.5
3.85
3.08
2.8
2.5 2.3 2.28
1.21 1.06
0
1
2
3
4
5
6
7
8
Thailand Taiwan India Australia Kazakhstan Philippines Hong Kong Malaysia Singapore New Zealand
FTTH/BHPMillions
320
52
18 13
0
50
100
150
200
250
300
350
China Japan South Korea Indonesia
FTTH/BHPMillions
Source: IDATE DigiWorld for FTTH Council APAC
The largest market worldwide. Important network overlapping. Coverage higher than gvt’s objectives
Source: IDATE DigiWorld for FTTH APAC

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0,00%
100,00%
200,00%
300,00%
400,00%
500,00%
600,00%
700,00%
Philippines Thailand Australia New Zealand Indonesia India China Taiwan Malaysia Kazakhstan
Source: IDATE DigiWorld for FTTH Council APAC
% variation from Dec-2015 to Dec-16 in the number of FTTH/B Homes Passed by country
An aggressive deployment plan performed by PLDT
Also, significant deployment efforts has been executed during 2016 for example
in Philippines, Thailand, Australia and New Zealand…

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3.4. FTTH in Sub Saharan Africa
FTTH Global Perspective: Lessons to be learned

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Context
• A lack of investment in fixed copper networks,
still mainly owned by governments; the
penetration of fixed lines is declining.
• Therefore a rather low adoption of fixed BB:
4% of households in 2016 in SSA.
• Generally speaking, a lack of regulation
towards fair competition and network
openness (LLU), so leading private players to
bypass incumbent’s fixed network (FTTH).
• Leapfrog to wireless network: At the end of
2016, more than 100 active LTE networks in
43 countries deployed
• The deployment of submarine cables has
lowered international bandwidth prices
(formerly via satellite). But the access is
limited to countries with a sea frontage.
Landlocked countries need to be connected
via transnational backbones.
Networks penetration in Sub Saharan Africa (SSA)
Source : IDATE
Numer of fixed lines, fixed BB subscribers, SIM cards, Mobile BB users
4G deployments in Africa in 2016
Source : IDATE
8%
1%
12%
5% 4%
118%
0%
20%
40%
60%
80%
100%
120%
140%
Fixed lines Fixed BB Mobile BB
2011 2012 2013 2014 2015 2016

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FTTH/B in Africa: Overview
• A native FTTH/B market
• But a good dynamic with a steady
growth in some countries, and
commercial launch in about 17 countries
in SSA.
After Submarine cables …Terrestrial backbones
Source : AfTerFibre (African Terrestrial Fiber)
FTTH/B deployments in Africa (June 2017)
Source : IDATE
Commercial
Planned
South Africa
Kenya
Namibia
Angola
Nigeria
Zambia
Zimbabwe
Mozambique
Madagascar
Lesotho
Rwanda
Réunion
Mauritius
Cameroun
Eq. Guinea
Gabon
Tanzania
Ghana

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Africa in the global ranking
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FTTH/B subscribers in Africa (SSA)
Source : IDATE
953 000 FTTH/B subscribers at June 2016
• Close to 1,3 million FTTH/B subscribers at June 2017
• A good growth of 33% in one year
• Two countries are now well installed in global ranking
(Number of residential subscribers / number of
households) at June 2017:
- Mauritius : 53,8% in the
Top league close to Japan
- South Africa : 4,2%
• New Entry: ANGOLA with 2,3% !!
• La Reunion as a territory: 16,7%
1,27 M FTTH/B subscribers at June 2017

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4. Drivers for Fibre :
The Gigabit Race, Short Latency and 4K TV !!
FTTH Global Perspective: Lessons to be learned

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How Gbps plans are evolving
26
Since 2013, Providing Gigabit
access has become a goal in
itself. The momentum has
been largely influenced by
Google’s initiatives, since
followed by private sector
operators and especially a
number of cities.
At the federal level, the
Government and the FCC
have announced new
measures in support of city-
led rollouts.
Europe
The Digital Agenda (DAE)
sets Europe’s connectivity
targets: 30 Mbps for all, and
100 Mbps connections or more
for at least 50% of European
households by 2020.
These appear very modest
targets when compared to
current technological
possibilities, and the
accelerated pace of the Gigabit
race, which more and more
ISPs seem willing to join.
Elsewhere around the world
In Asia, selling Gigabit-speed
access is a strategic choice for
private sector operators..
In Latin America and the Middle
East, just providing the entire
population with broadband
access is already a challenge,
so Gigabit access is not really
on the table as yet. But a few
ISPs do offer ultra-fast plans,
aimed at a very specific
clientele.
USA

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2025 EU New Objectives: September 14th 2016
•1 Gbps for schools, universities, research centres, transport hubs, all providers of public services such as
hospitals and administrations, and enterprises relying on digital technologies,
•All European households, rural or urban, should have access to connectivity offering a download speed of at
least 100 Mbps, which can be upgraded to 1 Gbps,
•All urban areas as well as major roads and railways should have uninterrupted 5G coverage. As an interim
target, 5G should be commercially available in at least one major city in each EU Member State by 2020
27

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Status of 1 Gbps plans around the world
Where are 1 Gbps plans available?
Source: IDATE DigiWorld, The Gigabit Race

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China Telecom Sichuan: FTTH first then successful 4KTV !!!
• China Telecom Sichuan (CTS) covers a Territory 90 M inhabitants
• End 2015, CTS announced having rolled out FTTH infrastructure to all of the 21 province’s cities, and its main
villages and towns
• First Province in China to be 100% FTTH covered in 3 years only!
• 10 M FTTH subscribers and more than 9 M IPTV 4K subscribers !!
• Next step is 4K HDR …. Up to 25/30 Mbps necessary
Source: IDATE DigiWorld, April 2016, Chengdu

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5. Conclusion : Why NG PON 2 now ? … and G.Fast Drivers
FTTH Global Perspective: Lessons to be learned

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Why NGPON 2 now?
• Gigabit Race is now a reality worldwide and this will accelerate in the 18 months to
come….how to face this with today GPON? How to serve large MDUs?
• Short latency applications will come and not only for Online Gaming…. VR is here
• TV and Video booming : 4K HDR already here (Netflix) and 8K will start probably in
2018 (Japan)
• FTTH not only for Residential…need to differentiate traffic
- Mobile Broadband and 5G coming: recent 1.3 billion USD agreement between
Verizon and Corning / Prysmian is a sign!
- Businesses: Cloud access and Ethernet Service with dedicated lambda

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Drivers for G.Fast
• FTTH main challenges find solutions with G.Fast
- To solve the cost of the last mile and especially homes installation for Fibre
- The MDU case in the USA
• BT : is not the only one to opt for G.Fast but the volume is there: 10 M Homes !
• Swisscom opened G.Fast commercial services one year ago
• NG Fast promises to deliver 10 Gbps over copper
• …. And Fibre will be close : GPON backhaul for G.Fast
• G.Fast Field trials and deployments are now well underway all across the Globe.
• Ecosystem is being build with all main active vendors proposing G.Fast but also
innovative chipset suppliers (Sckipio).

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IDATE Research: Stream FTTx & Gigabit
33
MERCI !!!
 Roland MONTAGNE
Principle Analyst
Director DigiWorld Institute UK
mob: +33 680 850 480
r.montagne@idate.org