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					FTTH Global Panorama
Worldwide Overview & Key Issues


                                  Roland MONTAGNE
                                  Director Telecoms Business Unit
                                  IDATE
FTTH/B Global Picture: APAC Strong leadership
                                      FTTx subscribers at June 2010
                                        FTTH/B             VDSL            FTTLA         FTTx+LAN       Total FTTx

           Western Europe                  2 302 956          2 021 133       200 500         175 000       4 699 589

           Eastern & Central Europe        2 283 885              79 300     2 160 000        354 327       4 877 512

           North America                   6 721 500          4 100 000            na               0      10 821 500

           Latin America                         7 500                0             0               0           7 500

           Asia                           32 355 564               3 500           na      17 300 400      49 659 064

           Middle East & Africa              244 181              85 000            0               0         329 181

           TOTAL World                    43 915 586          6 288 933      2 360 500     17 829 727      70 394 746

                                                         Source: IDATE


Global FTTx market reaches 70.4 million subscribers at mid-2010, 62% being FTTH/B
Global FTTH/B market continues to make strides. Growth in 1H2010 was steady, with
 5 million new subscribers (+13% over the past 6 months)
Asia is still the leading market, representing more than 73% of worldwide FTTH/B
 subscribers at June 2010, followed by the USA
Europe (Western + Eastern) counts only for 10.4% of worldwide FTTH/B Total
Middle East Region FTTH/B nascent market is mainly due to UAE’s operators
 dynamism
                                                                                                                        2
FTTH/B Global Picture: APAC Strong leadership
           World’s top 10 FTTx operators in terms of subscribers at June 2010
             Rank      Player                    Country          Technology & architecture      FTTx subscribers
             1         NTT                       Japan            FTTH/B GEPON                           13 839 000
             2         China Telecom (*)         China            FTTH & FTTx/LAN EPON LAN/DSL           11 850 000
             3         China Unicom (**)         China            FTTH/B GEPON/EPON & FTTx/LAN            6 320 000
             4         KT                        South Korea      FTTB EPON/GEPON                         5 500 000
             5         Verizon                   USA              FTTH BPON/GPON                          3 659 000
             6         SK Broadband              South Korea      FTTB/LAN GEPON                          3 254 605
             7         AT&T                      USA              FTTN/VDSL2                              2 505 000
             8         Chunghwa Telecom          Taiwan           FTTB GEPON                              1 853 000
             9         LG Powercom               South Korea      FTTH/B EPON/GEPON                       1 642 159
             10        KDDI                      Japan            FTTH/B EPON/GEPON                       1 637 000
              (*) 750 000 FTTH subs. and 11.1 million FTTx/LAN subs.
                                                                                                      Source: IDATE
              (**) 120 000 FTTH subs. and 6.2 million FTTx/LAN subs.



In terms of operators, the gap between Asia and the rest of the world is still important
Among the globe’s ten largest FTTx operators, height are Asian, two are from the
 USA. No European operators in the Ranking.
NTT is still the largest FTTH/B operator with a base of 13.8 million subscribers but
 probably no more for a long time
Indeed China Telecom is now counting 11.8 million FTTx subscribers at June 2010
 being mainly FTTx/LAN (EPON LAN/DSL)
2 Chinese operators (China Telecom and China Unicom) in the Top 3!
                                                                                                                      3
Japan: the FTTH leader
More new FTTH/B subscribers than new DSL subscribers since April 2005


Nearly 18.1 Million FTTH/B subscribers at June 2010 and 46 Million Homes Passed...and
 still around 600 000 new FTTH subscribers last 6 months …. Nearly 40% are FTTB subs


At June 2010, FTTH/B subscribers represent 54% of total Broadband subscribers and
 nearly 90% of the population is already covered!


Attractive prices, closing the gap with ADSL tariffs… aerial deployments


Government’s proactive approach to FTTH deployments: 30 Million FTTH subscribers in
 2010 as a ambitious initial objective…objective revised in November 2007 at 20 Million
 FTTH subscribers in 2010… will not be reached


But not specific services….
 ….with a few IPTV subscribers in Japan (probably less than 300 000)

                                                                                          4
Strong domination on FTTH/B

Indeed, retail price for SDU was 5 460 Yens, was only around 10% more
 expensive than wholesale offer.
But MIC has forced NTT to open up it’s FTTH network at advantage prices for
 competitors: since June 2008, NTT East for example decreased his wholesale
 price of 14%.
    NTT market shares on FTTH is nearly 73% compared to 37% on DSL (end 2008)
                                              NTT market share on FTTH/B
                               USEN
                                                                      Others
                               4.3% Others
                                     7.0%
                                 KDDI
                          Power 5.6%                                           NTT
                        Companies
                          10.2%
                                                                                      SDU
                                              NTT
                                             72.9%


                                                                    Others



                                                                                NTT


                                                                                             Source :NTT
                                                                                       MDU

  At end of 2Q2010 overall, NTT East and NTT West's combined share continued to
  increase, reaching nearly 75% !!
                                                                                                           5
NTT: FTTH ARPU




                 Source: NTT – November 2009



                                               6
USA: FTTH is the unique solution for RBOC’s
Power of Cable operators: Time Warner, Comcast, launching 30 or 50 Mbps offers
CableVision proposing a 101 Mbps offer … more than twice what Verizon's much-touted
 FiOS offers (50/20 Mbps)


At June 2010, Verizon has signed 3.8 Million FiOS FTTH subscriber (29.7%
 penetration) and has 3.2 Million FiOS TV subscribers (25.9% penetration)


At June 2010, the FiOS network passed 15.9 million premises or approximately 50 percent
 of total households in areas currently covered by Verizon’s wireline network.
More precisely, at June 2010 it reached 12.9 M homes passed and ready for sale by FTTH
 and 12.4 M homes passed and ready for sale for FiOS Video
Initial Target: 18 million homes passed by 2010, will not be reached

AT&T (FTTN oriented) and Verizon launched Fibre access for delivering HDTV & Triple
 Play
Churn is very low for FiOS TV Subscribers: around 1%
2Q10: FiOS ARPU > $145

                                                                                       7
USA: FiOS TV Packaging & Pricing – Example




                          Source: Verizon – November 2009




Verizon claims now to be the 6th largest cable operator in the USA
                                                                      8
European FTTH Panorama - Background
IDATE has been commissioned by the FTTH Council Europe to provide a
 comprehensive overview of FTTH deployments in Europe 36 (EU 27 +
 Norway, Iceland, Switzerland & Andorra, as well as five countries in Eastern
 Europe : Russia, Ukraine, Croatia, Serbia and Turkey) and in 14 countries in
 Middle East (8th edition)
Methodology used
    Desk  research
    Direct contacts with FTTH players (questionnaires, phone interviews)
    Information exchange with FTTH Council Europe members
    Direct contacts with IDATE’s partners in several European countries

Objectives: to provide a complete summary of the status of FTTx in Europe
                  of new projects
    Identification
    Characterization of each project: organization initiating the project, Key parameters &
     Figures (Homes and Buildings passed), Technical parameters, Financing & Business
     model
    We distinguished FTTH/FTTB and FTTN (FTTN/C+VDSL, FTTLA)



                                                                                               9
                           About
     Available results for EU36 260 projects listed in EU36

     Quantitative                                                                      Qualitative
                                                June 2010                          Orange Slovensko
                             FTTH/B subscribers (*)       FTTH/B Homes/Buidings    Identification Operator/Organisation
                                                                 passed            Orange Slovensko is the largest mobile network operator in terms of subscribers in Slovakia.
Altibox (Lyse)                                180 000                    250 000
Tromsbynett / Pronea                           17 000                     26 500   The company launched a commercial offer in 2007 including triple-play fibre-to-the-home (FTTH) broadband internet, digital
Adger Energi                                   15 000                     40 000   TV and fixed line voice telephony services under the FiberNet banner.
Kvinnherad Breiband                             2 800                      3 200
                                                                                   Before that a FTTH/GPON pilot has been launched in 2006.
Alta Kraftslag                                  1 889                      4 000
Tafjord                                         2 000                         na   Key parameters
Telenor                                            na                         na   Orange announced an investment of SKK1 billion (EUR32 million) to roll out a FTTH broadband network.
Others (1)                                     22 000                     58 000   Currently the optical network is accessible in a total 15 cities in Slovakia, covering more than 301,000 households.
Total FTTH/B                                  240 689                    381 700
                                                           FTTN Homes/Buidings
                              FTTN subscribers (**)
                                                                 covered           Figures
Total FTTN                                            0                        0   Number of Households/Business Units passed                      30,000 households (December 2007) / 211,000
Total Norway (***)                            240 689                    381 700                                                                   215,000 households at June 2008 (IDATE estimates)
                                                                                                                                                   215,000 householods at end 2008 (IDATE estimates)
                                                                                                                                                   280,326 Homes Passed at June 2009
Source: IDATE for FTTH Council Europe                                                                                                              293,000 Homes passed at December 2009
                                                                                                                                                   301,000 Homes passed at June 2010

                                                                                   FTTx subscriber base                                            500 Subscribers by December 2007 (IDATE Estimates)
                                                                                                                                                   4,000 FTTH subscribers at June 2008 (IDATE estimates)
                                                                                                                                                   8,000 FTTH subscribers at end 2008 (IDATE estimates)
                                                                                                                                                   29,000 FTTH subscribers at June 2009
                                                                                                                                                   37,500 FTTH subscribers at December 2009
                                                                                                                                                   45,000 FTTH subscribers at June 2010 (IDATE estimates)



                                                                                   Technical parameters
                                                                                   Nokia Siemens Network is the main provider for GPON.

                                                                                   MDU 70% / SDU 30%


                                                                                                                                                                                                          10
FTTH in Europe - Overview: Projects
                                                                                    Homes/Buildings
                                      Countries                     Players
 IDATE has identified about      Denmark         TDC             Incumbent
                                                                                   passed (June 2010)
                                                                                            210 000
                                  Finland         Telia Sonera    Incumbent                 500 000
  260 FTTH/B projects in          France          France Telecom  Incumbent                 605 088
                                                  Iliad/Free      Alternative
  Europe with very different                                      Operator                  380 000
  sizes                                       SFR                 Alternative
                                                                  Operator                  390 000
                                              Numericable         Cable Operator          4 400 000
 Some significant FTTH/B         Germany     Wilhelm Tel
                                              M-Net
                                                                  Public
                                                                  Public
                                                                                            200 000
                                                                                            120 000
  European deployments at         Italy
                                              NetCologne
                                              Fastweb
                                                                  Power Utilitiy
                                                                  Alternative
                                                                                            170 000

  June 2010                                   Telecom Italia
                                                                  Operator
                                                                  Incumbent
                                                                                          2 000 000
                                                                                            150 000
                                  Netherlands Reggefiber          Infrastructure            560 000
 Different categories of         Norway      Lyse/Altibox        Pöwer Utility             250 000
                                  Russia      Beeline (Vimpelcom) Alternative
  players involved                                                Operator                8 300 000
                                  Slovakia    T-COM               Incumbent                 350 000
     Alternative operators                   Orange Slovensko    Alternative
                                                                  Operator                  301 000
     Cable operators             Slovenia    T2                  Alternative               310 000
                                              Telekom Slovenije   Incumbent                 110 000
     Power Utilities             Spain       Telefonica          Incumbent                 350 000
                                  Sweden      B2/Telenor          Alternative               500 000
     Municipalities                          TeliaSonera         Incumbent                 270 000
                                  Lithuania   TEO                 Incumbent                 355 000
     Infrastructure operators    Hungary     Magyar Telecom      Incumbent                 215 000
                                  Portugal    Portugal Telecom    Incumbent               1 000 000
     Incumbents                              Sonaecom            Alternative               300 000
                                              Zon                 Cable Operator            170 000

                                  Source: IDATE for FTTH Council Europe
                                                                                                        11
FTTH in Europe - Overview: Global Figures
In June 2010, more than 3.2 million FTTH/B subscribers and more than 18 million
 Homes Passed(1) in EU35 (excluding Russia)
          Nearly 4.5 million FTTH/B subscribers and more than 26.5 million Homes Passed including Russia
          The potential of Russia’s FTTH/B market is high and the impact of Russia in the European landscape
           will be higher in the coming years as players get more involved in FTTH/B deployments
Growth in terms of subscribers is getting higher than growth in terms of Homes
 Passed (respectively +18% and +6% excl. Russia and +22% and +6% incl. Russia)
          This highlights today challenge for FTTH/B players which consists in focusing not only in deployments
           but also on the migration of end users from Broadband to FTTH/B thanks to adequate services and
           offers
As a consequence, penetration Subscribers/Homes Passed is beginning to grow in EU
 36: nearly 17% vs 15% at end 2009 (incl. Russia)
                                                                                                      Subscribers including Russia
                      Europe                                                                                                                                                       Growth
                                                               June 2010                    Dec 2009                   June 2009                    Dec 2008                      June 2010
                                                                                                                                                                                 /June 2009
Total FTTH/B without FTTN                                            4 469 241                   3 657 126                   2 962 496                   2 464 416                  51%
Total FTTH/B+FTTN                                                    9 507 231                   7 649 786                   4 479 846                   3 461 559                  112%

(1) Homes passed might be over estimated as 1 home can be passed by several operators in certain countries. Our figures take this into account at mid-2010, for some countries
such as Slovenia.
Source: IDATE for FTTH Council Europe

                                                                                                                                                                                              12
FTTH in Europe - Overview: Players
There are still more Municipalities and Power utilities than any other kind of FTTH/B
 players at mid-2010




 Source: IDATE for FTTH Council Europe



Alternative operators are still the most dynamic and represent at mid-2010, including
 Russia, 72% of total European FTTH/B Homes Passed


Incumbents are getting more and more involved: they represent more than 17% of
 FTTH/B homes passed at June 2010 compared to 15% six months earlier




                                                                                         13
FTTH/B subscribers in Europe by country
                                                    Evolution of FTTH/B (*) subscribers in Europe


     1 400 000


     1 200 000


     1 000 000                                                                                      June 2007

                                74% of subs in 8 countries (EU 35)                                  December 2007
      800 000                                                                                       June 2008
                                                                                                    December 2008
      600 000                                                                                       June 2009
                                                                                                    December 2009
      400 000                                                                                       June 2010


      200 000


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            (*) We refer here to the definition of FTTH/B from the FTTH Councils
            Source: IDATE for FTTH Council Europe
                                                                                                                    14
  FTTH/B Homes Passed in Europe by country
                                               Evolution of FTTH/B (*) Homes Passed in Europe
            54% of HP in 2 countries (EU 36)
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                        June 2007          December 2007               June 2008     December 2008   June 2009   December 2009   June 2010

              (*) We refer here to the definition of FTTH/B from the FTTH Councils
              Source: IDATE for FTTH Council Europe
                                                                                                                                             15
FTTH leadership in Europe: Countries
 Russia with 1.2 million FTTB subscribers and more than 8.4 million Homes Passed is the clear
  leader of EU 36 and will keep being leader in the coming years considering the huge potential of
  Russian market and high % of pop. living in MDUs
 In EU 35, Eastern European countries confirm their dynamics in terms of FTTH/B deployments and
  subscriptions; in all those countries, except Latvia, the main architecture is FTTB as most of the
  population live in MDUs
 Then, in EU 35, the majority of subscribers is still concentrated in 8 countries: Sweden, France,
  Italy, Lithuania, Norway, The Netherlands, Denmark and Slovakia (around 74% FTTH/B subscribers
  at June 2010); but this is not representative of their penetration rates !

             Penetration rate subscribers/Homes passed for European leaders (June 2010)

                                                                            Penetration (1) at
                               Rank                  Countries
                                                                               June 2010

                                            1   Norway                                 63,1%
                                            2   Sweden                                 38,9%
                                            3   Lithuania                              35,8%
                                            4   Netherlands                            31,9%
                                            5   Denmark                                31,9%
                                            6   Italy                                  35,8%
                                            7   Slovakia                               11,5%
                                            8   France                                  6,4%
                          (1) Number of subscribers in total Homes Passed
                           Source: IDATE for FTTH Council Europe                                     16
FTTH leadership in Europe: Technologies

In June 2010, the main architecture deployed is still FTTB
Regarding technology, players have mainly chosen Ethernet
Then, MDUs are still the principal target for Fiber deployments in Europe
            Main architecture deployed
                                                 June 2010     Dec 09     June 2009
            (subscribers segmentation)
         FTTH                                           37%         42%          42%
         FTTB                                           63%         58%          58%


             Main technology deployed
                                                 June 2010     Dec 09     June 2009
            (subscribers segmentation)
         PON                                            18%         16%          19%
         Ethernet                                       82%         84%          81%


                Dwellings deployed
                                                 June 2010    Dec 2009    June 2009
            (subscribers segmentation)
         MDU                                            75%         73%          71%
         SDU                                            25%         27%          29%
         Source: IDATE for FTTH Council Europe
                                                                                       17
FTTH/B National plans
                        Main national FTTH/B programmes around the globe
      Country/Programme          National investment   Per capita           Type of financing
                                 (billion EUR)         spending (EUR)

      Australia/                          30                1,428.6        Construction of a national open access
      NBN           *                                                      network
      New Zealand/UltraFast BB           0.85                212.5         Acquisition of a stake, following local CFPs
                                                                           across the country
      Greece                             2.1                 191.0         Construction of a national open access
                                                                           network
      Singapore/                         0.56                124.5         Construction of a national open access
      NGN National BB Network                                              network
      France/                             2                  32.8          Subsidy, following a local CFP
      Plan National THD
      USA/                       5.6 (only part of       Less than 18      Subsidy, following a local CFP
      BB Stimulus                which is for FTTH)

      * Since total cost of the network has been revised down to around 37 billion AUD (nearly 26 billion EUR).
      The government in mid-2010 announced equity funding of around 18 billion AUD (12.8 billion EUR) over 4
      years for the network’s rollout


       Source: IDATE , FTTx Watch Service 2010



                                                                                                                          18
Question – Key issues

 What are the main business models being used for FTTH?
 How business models differ from one another (and from broadband
  services based on ADSL), in terms of new offers, services and applications
  bundled with access, pricing policy, wholesale revenue...?
 To what extent is fixed-mobile convergence and the arrival of LTE being
  taken into account?
 What regulatory measures could drive or impede operators’ investments,
  particularly with the arrival of the Net Neutrality debate in Europe
 What role will investments by cities and local authorities play over the long
  term?
 What can we hope from government stimulus packages that include support
  for FTTH? National (Australia) or Local Approach (France)?


                                                                              19
  Thanks!



Roland MONTAGNE
Director Telecoms Business Unit
IDATE
r.montagne@idate.org
+33 6 80 85 04 80
                                  20

				
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