2014 Global Broadband - Demand for Fibre Networks Grows

Global broadband market heading in the right direction

The global broadband market is heading in the right direction with both average broadband speeds going up - and broadband pricing, on the whole, coming down. This combined with the growing demand for fibre network infrastructure creates an environment that is full steam ahead for fixed broadband.

With more than 100 countries now involved in the rollout of FttP; there is increased evidence that commercial demand exists for this infrastructure. In developed economies; FttP demand will, over the next 5 years, grow to between 30%-50% of the population. Competition aimed at the top end of this market will trigger a broader rollout.

Looking at previous developments in the internet/broadband market; it is safe to say that from now on demand for FttX connections will – around the globe – only increase. Countries are increasingly viewing the developments in broadband infrastructure as a utility, similar to models used for gas, electricity and water, and such a model is the key to universally affordable broadband access.

Attracting infrastructure funds to the telecoms industry remains one of the largest obstacles in developing national fibre infrastructure. However, there is one exception where we do see investors being active in the market and that is in backbone infrastructure. Pressured by competition from the wholesale providers using their copper networks as well as from increased competition from the mobile operators; national telcos are forced to invest more and faster in fibre networks in order to stay competitive.

With hundreds of countries adopting broadband policies; national broadband networks are now the accepted best practice for deploying broadband infrastructure. None of these countries’ policies are identical; they are all different – they reflect the political, social, economical, financial and geographical conditions that prevail in each case.  However all agree that a broadband infrastructure is needed to face the economic and social challenges that each country is facing, and the broadband infrastructure is perceived by all to be critical for the development of the digital economy, healthcare, education, e-government and so on. We also see that all the resource-rich countries have embarked on large-scale FttP projects in order to diversify their economies.

BuddeComm’s new report, Global Broadband – The Demand for Fibre Networks Grows, provides important insights into the global fixed broadband market and includes trends, analyses, statistics and case studies. It provides analyses on the progress of broadband and fibre networks around the world and the key considerations when developing National Broadband Networks. In addition the report includes valuable regional overviews written by BuddeComm’s Senior Analysts.

Examples of key insights:

• In 2014 there are still large price differences around the world for fixed broadband services, however overall the prices of broadband have dropped making it increasingly more affordable.
• BuddeComm predicts that, in the longer term, wholesale will remain one of the key growth markets in telecommunications, as it is essential for services such as e-health, tele-education, smart grids, etc. International IP bandwidth prices continue to decline around the world; albeit at a slower pace when compared to recent years.
• There is evidence that the Dark Fibre segment is in a growth phase again; however unlike the 1990s when fibre cables were built with the expectation that demand would catch-up with the infrastructure - today there is usually an established reason to build fibre networks to meet actual demand.
• In terms of future broadband subscriber growth; Asia in particular remains a key market, due partly to the interest in upgrading to broadband for online TV purposes. China, India and Indonesia especially are predicted for future growth, while the more developed markets of Japan, Hong Kong, Taiwan and Singapore are less so.
• Eastern Europe and Latin America are also expected to grow significantly, while the markets of Western Europe and North America will experience slower growth.
• The Gulf State countries are rolling out FttP at great speed.

Companies covered in this report include:

Alcatel-Lucent; AT&T; Belgacom; Bell Aliant; Bell Canada; Chunghwa Telecom; Chorus; China Telecom; China Unicom; Free; Google Fiber; GVT; KDDI; Mälarenergi Stadsnät; Mauritius Telecom; NBN Co; Network company (NetCo); NTT; Numéricable; Operating company (OpCo); Orange; SFR; SingTel; Telebras; TEO; Verizon; Top 10 major fixed-line parent carriers worldwide by subscribers 2013.

Data in this report is the latest available at the time of preparation and may not be for the current year