IHS Global Insight Perspective | |
Significance | The projects will bring significant progress on large-scale deployment of FTTH networks in China. |
Implications | The three Chinese telcos are upgrading their broadband infrastructure with the latest available technology to provide enhanced broadband-related services. |
Outlook | China already has a significant deployment of fibre-based services mainly using LAN or Ethernet-based networks, and full FTT deployment is under way. |
Ericsson has been awarded contracts with the three telecoms operators in China to roll out FTTH networks, using state-of-the-art broadband fibre-access technology Gigabit Passive Optical Network (GPON), and its patented air-blown fibre solution. Ericsson will also provide a range of professional services including competence development, network design and optimisation, support services and consultancy. With the projects, millions of people in an initial nine Chinese provinces will now be able to enjoy high-speed broadband, as well as high-definition TV, and quality voice services. These nine provinces are Anhui, Guangdong, Hebei, Heilongjiang, Hubei, Liaoning, Shandong, Shanghai, and Sichuan.
Outlook and Implications
The projects will bring significant progress on large-scale deployment of FTTH networks in China. China Mobile, China Telecom, and China Unicom, which are now integrated service providers following the industry restructuring last year, are upgrading their broadband infrastructure with the latest available technology to provide enhanced broadband-related services. The country's broadband market is expanding rapidly with a total of 91.629 million subscribers at the end of May, although 81% of theses were xDSL users.
The country already has a significant deployment of fibre-based services, mainly using LAN or Ethernet-based networks. China Telecom reported that at the end of 2008 around 80% of its 44.27 million broadband subscribers were provisioned via xDSL technologies with the remaining 20% using LAN based solutions—around 8.9 million subscribers. China Unicom (the merged entity with China Netcom) reported some 4.8 million LAN users, out of its 25.42 million broadband subscribers.
Nevertheless, full FTT deployment is under way. For instance, Shanghai Telecom (China Telecom's Shanghai subsidiary) has announced that it has a next-generation-network deployment planned which would see 6 billion renminbi (US$880 million) invested to deliver 100-Mbps services to 750,00 users by the end of 2009 and three million users by the end of 2011. The operator hopes its network will be capable of providing 1 Gbps speed to buildings in 2012 (see China: 5 June 2009: Shanghai Telecom to Upgrade Broadband Speeds to 100 Mbps over Three Years).
The operators are keen to deploy fibre-based networks as broadband access and related value-added services across the consumer, enterprise, and public segments are seen as key growth areas for their revenues and customer bases. China Telecom and China Unicom have started deploying IP TV and VoIP in selected cities and the coverage and quality of these will be significantly enhanced with the roll out of higher-speed broadband networks.