IDATE DigiWorld -FTTx markets public - Roland MONTAGNE

World FTTx marketsFocus on FTTH in Europe and place of the UK

NICC Open Forum 2017 – London, November 8th 2017

ContactRoland MONTAGNEPrinciple AnalystDirector DigiWorld Institute [email protected]

www.idate.org © IDATE DigiWorld 2017 – p. 2

1. FTTx Worldwide Key Trends

2. Major Players Worldwide

3. FTTH in Europe

4. FTTH: zones of growth for the future?

5. Drivers for Fibre: The Gigabit Race, Short Latency and 4K / 8K !

6. Conclusion: Place of the UK?

Agenda

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1. FTTx Worldwide Key TrendsWorld FTTx markets


FTTx Worldwide key trends

> Superfast technologies(1) represented nearly 48% ofbroadband access subscriptions at end 2016, 9 points morethan one year before.

> FTTH/B is still the leading superfast broadband solution, farahead of FTTx/D3.0, followed by VDSLFTTH/B represented 68% of FTTx subscriptions at end 2016. Growth ofFTTH/B subscriptions will continue until 2021.FTTx/D3.0 represented at end 2016, 20% of FTTx subscriptions. After twoyears of significant growth, proportion of FTTx/D3.0 on SuperfastBroadband is levelling off.VDSL, for its part, lagged behind, representing 12% of subscriptions atJune 2016 . This proportion is quite stable.

> The regional breakdown is very heterogeneousNo huge changes in the geographical predominance of APAC on theFTTH/B market.FTTH/B is also the main deployed technology in MENA. It was the casealso in LATAM, but now it is meeting stronger competition from VDSLtechnologies in the region (especially in Brazil).FTTx/D3.0 is still dominant in North America and is by and large growingmore rapidly than other technologies.There is considerable space for VDSL and other copper basedtechnologies such as G.Fast in Europe, where incumbents still wish tooptimise 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


Leading countries, by FTTx solutions at December 2016> China , leader on worldwide FTTH/B marketUntil 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 inthe world, it will remain the leading market for the near future. The number ofFTTH/B subscribers has already significantly risen since 2014.China and Japan are followed by Russia, which is ahead of South Korea, while theUSA is ranked 5th worldwide.Elsewhere in the world it is worth noting that FTTH/B is the only architecturedeployed, such as in Gulf Cooperation Countries (GCC) or the MENA region.

> Strong competition from VDSL technologies in North America,Europe and also in LATAMThe promise of VDSL-based technologies has convinced several Europeanincumbents to bet on the potential of their copper networks.However, as these deployments will concern limited areas, VDSL will not overtakethe 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 millionhomes passed and 1.5 million subscribers) the only two countries in their own regionto deploy this solution on a large scale.

> FTTx/Docsis 3.0 is the technology implemented by MSOsThe 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, inorder to provide higher speed rates. In general, cablecos do not plan to expand theirgeographical 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 Doscis3.1. with a few exceptions betting on FTTH.European MSOs have completed also the upgrade of their networks, thus enteringthe 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)




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2. Major players WorldwideWorld FTTx markets


World leading providers, all FTTx architectures> There are 5 Asian and 3 US players in the global Top 10. Then one player from Russia and one from Western Europe

> Indeed, only one player from Western Europe enters the ranking thanks to its large-scale FTTN+VDSL rollouts (BT)

> Two US cablecos have now completed their infrastructures migration to FTTx/D3.0: Comcast and Charter (Spectrum)

> The Mega merger in USA has taken European cableco Virgin Media out of the TOP 10 chart

> China’s three telcos (China Telecom, China Unicom and China Mobile) top this FTTxranking

106 M subscribersFTTH/B

4.7 M subscribersFTTN+VDSL#9

5.7 M subscribersFTTH

#10


#2

#1

7.4 M subscribersFTTB

#819.9 M subscribers

FTTH/B

#424.7 M subscribersFTTx/D3.0

#3

#77.8 M subscribersFTTH/B


#6

#521.4 M subscribersFTTx/D3.0


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3. FTTH in EuropeWorld FTTx markets


FTTH/B figures at September 2016

There were more than 44.3 million FTTH/B subscribersand 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


Historical data and growing trends

•Interesting dynamism of the European Union since 2013•CIS countries : higher growth rates for subs than for HP in 2016•Globally: an increase of the growth rate in 2016 ! Especially for EU28

Source: IDATE DigiWorld for FTTH Council Europe

Growth of FTTH/B subscribers(million)

Growth of FTTH/B Homes Passed(million)

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101520253035404550

Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Sep-15 Sep-16

EU39

EU28

CIS

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Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Sep-15 Sep-16

EU39

EU28

CIS


Major projects / categories of players

•400 analyzed FTTH/B projects in EU39 at September 2016:- There are less and less new projects from one year to another- All major operators are involved in each country, among which 35 incumbents at least- There will probably be more and more small players involved in local deployment in the coming years (Rural andSuburban)

• Incumbents now represent 43% of the total number of Homes Passed- This ratio was only 21% at end 2011- Alternative players, which promoted FTTH/B in most countries since 2008-2009, now represent 53% of the totalnumber of HP; this ratio is increasing

•The market is clearly dominated by those two categories of players.

•But municipalities/Local Authorities, along with utilities when appropriate, will remain those ones that will help ensurean exhaustive coverage at term


% of Homes Passed per category of player


General ranking: FTTH/B Homes Passed

•17 countries with 2 M HP or more in EU39 (10 countries in EU28, in blue on the map)•Most significant growth rates do not necessarily concern the largest market but this confirms that, even incountries where FTTH/B is not the leading NGA solution, the interest is growing (e.g. Bulgaria: +40%)

Countries with 2 M HP or more at Sept 2016 [Top 5 Growth rates for 9 first months 2016](million)



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



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 ItalyCountries with 2 M HP or more at Sept 2016 [Top 5 Growth rates for 9 first months 2016](million)



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



European ranking

•The European Ranking includes countries of more than 200 K HH where the part of FTTH/B subs in the totalnumber of HH is at least 1%•Only 12/31 European countries with a penetration rate > 20%


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4. FTTH: zones of growth for the future?World FTTx markets


0,00%

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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

Significant deployment efforts has been executed during 2016 for example in Philippines, Thailand, Australia and New Zealand…


Africa in the global ranking

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 ofhouseholds) at June 2017:

- Mauritius : 53,8% in theTop 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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5. Drivers for Fibre :The Gigabit Race, Short Latency and 4K TV !!

World FTTx markets


Status of 1 Gbps plans around the world

Where are 1 Gbps plans available?

Source: IDATE DigiWorld, The Gigabit Race


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 mainvillages 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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6. Conclusion: Place of the UK?World FTTx markets


The UK is very well placed for Superfast BB (>30 Mbps) …..

% of Superfast subscribers over the total BB subscribers, 2011-2016

Source : IDATE, in « Telecom market dynamcis: Europe vs the USA »

0%

10%

20%

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2011 2012 2013 2014 2015 2016e

France

Germany

Italy

Spain

UK

EU-5

USA

Présentateur

Commentaires de présentation

Données IDATE : Abonnés mobile 2016 (prévision) : 84 650 Abonnés 3G 2016 (prévision) : 44 679 Abonnés 4G 2016 (prévision) : 32 890


…. But absent in the Rankings regarding FTTH rollouts

•The European Ranking includes countries of more than 200 K HH where the part of FTTH/B subs in the totalnumber of HH is at least 1%• UK Figures for September 2016: 0.5 %



IDATE Research: Stream FTTx & Gigabit

26

MERCI !!! Roland MONTAGNE

Principle AnalystDirector DigiWorld Institute UKmob: +33 680 850 [email protected]

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IDATE DigiWorld -FTTx markets public - Roland MONTAGNE