China wrests fiber market leadership
China looks set to take leadership of the global optical fiber broadband market, driven by a forecasted huge surge in subscribers domestically as well as strong support from the local government, Ovum noted.
The research firm released a new study Wednesday predicting that China's FTTx subscribers will reach 100 million in 2016, accounting for more than 50 percent of the world's subscribers. Julie Kunstler, principal analyst at Ovum, added in the report that China is currently the "biggest consumer" of FTTx equipment and this dominance is set to continue.
FTTx includes networks such as FTTB (fiber-to-the-building), FTTN (fiber-to-the-node and FTTH (fiber-to-the-home).
Kunstler noted: "A key driver of the enormous forecasted growth is the bandwidth and subscriber targets set by the Chinese government and service providers. In addition, the government is providing support for deployments in the form of credit and partnerships.
"In addition, the significant greenfield construction projects that are under way in the country make the installation of FTTx networks easier," she said.
The analyst's observations were similar to insights shared by the Broadband Forum during the CommunicAsia tradeshow last month which pointed to how China's broadband subscribership had "heavily driven" Asia, continuing its foothold as the world's fastest-growing region for fixed broadband. In the report, the industry group stated that China's special administrative regions of Hong Kong and Macau had together contributed 42 percent of the 15.2 million net additions to total global subscriber numbers in the first quarter of 2011, marking the country's biggest quarterly increase since 2009.
Ovum's report also corroborates a forecast made by Pyramid Research last year. The latter stated that strong direction from China's government will see it edge out Japan as Asia's largest fiber market by end-2011, with 25.9 million fiber access lines in China compared with 25.2 million lines in Japan.
Daniel Yu, senior analyst at Pyramid Research, said in the ZDNet Asia report that China is expected to spend US$22 billion over the next three years to deploy a fiber network with up to 80 million ports. "Migration to higher speed and thus higher-priced, fiber-optic connections, will ensure continued growth in China's fixed-service revenue," he said.