FTTH deployment in the Asia

Over the last year, the Asia-Pacific (APAC) region has retained its position as a key global market for fibre network developers. However, perhaps unsurprisingly given its size, large variations remain in terms of coverage, uptake, challenges, and technologies used.

According to Aasif Iqbal, Telecom Analyst at GlobalData, there are clear signs that fibre-to-the-home/building (FTTH/B) services will cement their position as the leading fixed broadband network technology in the APAC market, with their share of the total fixed broadband access lines “set to increase from 94.1% (796.8 million) in 2022 to 96.1% (942.1 million) by 2027.”

At the country level, he also notes that operators’ fibre network rollouts, national broadband networks and fibre wholesale, as well as sharing deals, government investments and wholesale fibre offerings like those from Chorus (New Zealand), NBN Co (Australia), and Netlink Trust (Singapore) will “push fibre broadband network rollouts in the region and enable wider availability of FTTH/B services, thereby driving its adoption.”

“Soaring demand for high-speed internet services, increasing availability of fibre network connectivity that support demand for higher speeds, and competitively priced multiplay service bundles and broadband plans offered by operators with benefits such as unlimited internet and access to major SVoD platforms, will also help drive fibre broadband service adoption in the region,” he says.

Although FTTH service adoption is growing in the entire APAC market, Iqbal notes that rates are diverse across countries, with countries such as China (101.7%), Hong Kong (86.9%) and South Korea (79.4%) displaying the highest household FTTH penetration rates in 2022, while Pakistan (0.5%), Sri Lanka (3.4%) and Myanmar (3.8%) had the lowest rates in the region.

When it comes to expansion, many countries in emerging Asia have committed to improving broadband access to citizens and extending fibre optic network coverage to rural and underserved areas as part of their own broadband development plans. According to Iqbal, Government-backed projects for national broadband coverage expansion, particularly fibre deployments, migration from copper to fibre technology and operators’ fibre optic investments across the region “will be key factors driving fibre broadband adoption in the region.”

The fixed broadband market in Asia Pacific is also witnessing growing adoption of 10 GPON technology, which Iqbal notes will help operators to have a single fibre access network to support FTTH connectivity, business and smart city applications.

“Hong Kong, Singapore, and South Korea, are among the early providers of 10Gb/s connections. New Zealand’s UFB initiative was able to roll out ultra-high-speed internet by focusing solely on fibre, in particular gigabit passive optical networks, which are cost-effective, scaleable, quick to deploy, and upgradable. New Zealand’s Chorus has already begun the process of upgrading to 10 GPON networks,” he says.

In March 2021 MIIT, China’s Ministry of Industry and Information Technology also announced the Dual Gigabit Network Coordinated Development Action Plan 2021-2023, that combines gigabit fibre optics and 5G infrastructure across the country, and aims to blend the capabilities of both fibre optics and 5G technologies. The project’s ambitious goals include the construction of 100 cities with the gigabit capability and the development of 100 gigabit VPN benchmark industry projects by 2023.

Meanwhile, in Singapore, NG-PON2 technology has been piloted to assess its potential for future network upgrades, as well as its capacity to enable network operators to deliver higher bandwidth and support multiple services over a single fibre infrastructure.

Elsewhere, Mohammed Hamza, Principal Research Analyst at S&P Global Market Intelligence, confirms that fibre continues to grow in most parts of the Asia-Pacific region, especially in emerging markets such as India and Southeast Asia.

“In India, Reliance Jio has rolled out last mile infrastructure, with its pan-India fibre network passing 20 million households. Airtel also expanded its FTTH footprints in more than 500 new towns in 2022 and increased fibre coverage in major cities. The expansion led to a 400% growth in new installations and 15 million new fibre homes passed,” he says.

“In Australia, Telstra is in the process of upgrading its fibre infrastructure. The incumbent will build 20,000km of new fibre routes by 2026 that can transmit data at 650Gb/s. Telstra is also working with Viasat to build the fibre network for Viasat's satellite system in Australia,” he adds.

In emerging markets, Hamza notes that, by year-end 2022, China had deployed the longest fibre cables (mainly using GPON), at more than 5,000km, given “its larger geographic area and the government’s call for fibre broadband adoption.” Even so, he observes that the market “still has room for fibre deployments, as penetration of residential fibre broadband subscriptions was below 80% as of 2022.” He also reveals that Japan and South Korea are the early movers in the region for FTTH, posting nearly 100% fibre broadband penetration by the end of 2022. Both of these markets have focused on improving speed and saving power with long-distance signal transmission via fibre lines. For example, NTT has been replacing single-core fibre lines with multi-core fibre lines since 2017.

More recently, Hamza points out that “digital decoupling” has taken hold, with submarine cables being constructed along new routes to mitigate the risk of damage from conflicts, especially in the wake of US-China tensions. China Mobile and China Telecom withdrew investments from a subsea cable project led by US constructors, while the Chinese telcos proposed a separate submarine cable project.

In other highlights, he notes that Indonesian operators are trying to drive fibre take-up rates while simultaneously amplifying 5G networks. Telkom Indonesia had 37 million homes passed by 2022, reaching its 2020 goal to transform its copper-based lines in 459 cities and districts to fibre. In addition, the operator has collaborated with Mitratel to integrate fibre connections into Mitratel’s 28,206 towers to improve the 5G network. MVN’s MNC Play also collaborated with local broadband players to increase its homes passed by more than 1.5 million as of year-end 2022. Meanwhile, XL Axiata and Link Net, which completed its sale to Axiata, had an estimated 4 million homes passed in 2022.

Malaysia’s fibre infrastructure is backed by the local government’s initiative - the Jalinan Digital Negara, or Jendela. The project reported a total of 7.74 million premises passed as of year-end 2022, exceeding the target of 7.5 million premises to conclude Jendela Phase 1. The Jendela Phase 2 (2023-2025) aims to have 9 million gigabit access lines to premises by year-end 2025, with 100% coverage in populated areas. In addition, Phase 2 goals include reinforcing fixed wireless access and other technologies to bridge the country’s digital divide.

Another country that has made “significant strides” in fibre broadband penetration is New Zealand, where Chorus New Zealand achieved coverage for 87% of the population by December 2022, equating to more than 1.8 million homes in a country of about five million people, with a national average uptake of 72%.

“Most consumers have gravitated towards the 300/100Mb/s fibre plan, which makes up 67% of Chorus' base, followed by gigabit plans at 24%, with starter fibre plans of 50/10Mb/s at just over 8%,” says Kurt Rodgers, Network Strategy Manager at Chorus New Zealand.

According to Rodgers, a small percentage of customers have adopted XGS-PON, locally known under the brand Hyperfibre, which offers symmetric multi-gigabit services up to 8Gb/s and is available across the Chorus fibre footprint in New Zealand. A successful proof of concept trial for 25GPON multi-PON technology was also completed in 2022, with Nokia, demonstrating the capability of delivering 25Gb/s, 10Gb/s and 1Gb/s services over the same passive fibre infrastructure.

“As per the current trends, the average monthly data usage is 573 gigabytes for residential and small businesses combined on fibre plans. Given the consistent growth in demand, the usage is forecast to grow at a compound annual rate of 20.7%, solidifying the crucial role of fibre broadband in New Zealand's digital future,” adds Rodgers.

In May, Chorus also announced its intent to retire its rural copper network within a decade. 13% of New Zealanders do not currently have access to fibre broadband, mainly in rural areas, and Chorus believes this clarity can help shape future investment towards the most suitable connectivity solutions for rural communities.

The company envisages the retirement process to take what Rodgers describes as an “inside-out and outside-in” approach, involving expanding the fibre footprint from more densely populated areas outwards while also shifting remote, copper voice-only customers towards broadband-capable alternatives, such as low earth orbit satellite technology and fixed-wireless internet service providers.

“We have also identified short-term tactics to expedite this transition, including ceasing the sale of copper services in areas already serviced by fibre and halting new construction of copper in rural and regional areas,” he says.

“One significant challenge we face is the prevailing myth about the reliability of copper in the event of a power cut. This misconception is particularly prevalent among older people, who hesitate to adopt newer alternatives. Overcoming this challenge is crucial to successfully implementing the copper retirement strategy,” he adds.

In terms of more general challenges, Rodgers reveals the most pressing issue is the post-Covid labour shortage, a common problem in many industries “accentuated by global demand for skilled fibre technicians.” In New Zealand, the government is helping by providing pathways to residency for skilled migrants and better incentives to help alleviate this skills shortage. Fibre network developers across the region are also increasingly focused on reducing carbon and other emissions, and Rodgers confirms that Chorus views the transition from copper to fibre, alongside the increased use of renewable energy, as “critical to achieving these sustainability goals.”

“Fibre offers a higher performance level and underpins a lower carbon footprint than traditional copper-based infrastructure, a step towards greener telecommunications,” he says.

When it comes to challenges, Hamza observes that issues tend to vary by market. For example, geographic limitations have been a key challenge for Australia, where he says “developers found it economically unviable to deploy an all-fibre network nationwide” – instead adopting a mixed-technology approach to reduce costs and using a variety of technologies such as FTTC, FTTN, fixed wireless and satellite for remote regions.

In Japan, Hamza reveals that natural disasters are a concern for infrastructure construction – and making an optical fibre route earthquake-resistant, for example, has “been a long-term effort for telcos like NTT and Softbank.” For South Korea, deploying fibre lines in rural areas is also a subject of focus due to the remoteness of rural areas and concerns over a return on capital. Here, the government promotes partnerships between public and private sectors to save on fibre capex in rural areas. Leading telco KT has also adopted “a cost-saving method with GiGA Wire services that connect copper/coaxial lines to fibre lines, allowing data transmission on existing infrastructure at higher speeds and a lower cost.”

“Indonesia and the Philippines have challenging geographies too. Other broadband technologies, such as fixed wireless and satellite, are used in remote areas and for small islands. In June 2022, Kacific Broadband Satellites Group built 2,500 sites in partnership with local operators PT Bis Data Indonesia (Bignet) and PT Primacom Interbuana (Primacom), providing satellite internet access in remote areas of Indonesia,” says Hamza.

“Another challenge for fibre deployment is the use of undersea routes. For example, in Vietnam, a connection problem occurred with the damage of five undersea fibre cables in February 2023 due to a high volume of internet traffic. To solve the problem, ISPs plan to purchase land-based cables and expedite the rollout of the remaining undersea fibre cable routes with expected completion by 2025,” he adds.

For Rodgers, the escalating climate change crisis also presents challenges, especially through more frequent severe weather events, like Cyclone Gabrielle which “wreaked havoc” across the North Island of New Zealand in February, emphasising the importance of network resiliency.

“This resilience is especially important for maintaining connectivity in remote communities. In the aftermath of Cyclone Gabrielle, customers on copper were eight-times more likely to lose service than those on fibre, and in Auckland, with more aerial copper cables, that figure was ten times more likely to lose service. If impacted, customers on fibre were restored twice as fast as those on copper,” he says.

In this context, Rodgers notes that the advent of direct-to-mobile satellite services offering 100% voice and data coverage “could become a crucial component of network resiliency for these isolated areas.”

“The advent of 5G fixed wireless substitution, wireless internet service providers and low earth orbit satellite services impact the business case for expanding fibre into rural regions. Fibre network developers must consider these factors before building robust, future-proof networks,” he says.

Meanwhile, despite the ongoing fibre rollouts across the region, Iqbal observes that many countries such as India, Indonesia, Philippines, Pakistan, still have very low fixed broadband penetration of population. In India, the vast geographic expanse and high licence fees are key challenges for fibre network expansion and, given the price sensitive nature of the market, the relatively high-cost of fibre broadband services is “still uncommon, especially in rural areas.’”

“Even in Indonesia, the relatively high cost of fibre broadband services is a major challenge for its widespread adoption. Widespread availability and consumer adoption of mobile services is another major challenge for fibre broadband service operators in markets such as the Philippines, Vietnam and Sri Lanka,” he says.

“In a few markets, government’s high licensing fees, duties, and technical challenges are currently hampering the local development of fibre optics. For instance, Pakistan has a far lower fibre optic penetration rate at less than 1%. The Pakistan government introduced a 20% regulatory duty on importing fibre optic cables in 2022 in an effort to promote local development. This may decelerate the pace of fibre optic network deployments in the country to some extent,” he adds.

Looking ahead, Hamza expects fibre uptake and household coverage to increase further across the region, with ISPs in China and India leading subscriber net growth “as they have access to the two largest developing markets.’ In his view, upgrading existing infrastructure with higher speeds and bandwidth will also be ‘a top priority for many incumbent ISPs in both emerging and developed markets.”

“We expect South-east Asian markets to improve their fibre technology to deliver more bandwidth and efficiency and to continue fibre rollouts to underserved areas, while innovating on fibre plans and packages to cater to all consumers,” he says.

“Developed markets are increasingly targeting converged fibre and mobile networks for their infrastructure as they look to future-proof their networks, such as IOWN by NTT in Japan. Furthermore, we have seen Japanese and South Korean telcos, such as KDDI and KT, increase investment in South-east Asian fibre network infrastructure projects in recent years,” he adds.

Elsewhere, Rodgers predicts that the fibre network deployment landscape will witness “several exciting developments and trends” in the coming years, with innovative solutions that extend reach and optimise deployment to rural and remote areas gaining momentum.

“Partnerships between fibre network developers and wireless technology providers will extend the reach of fibre benefits by utilising it as backhaul for wireless services, further expanding high-speed connectivity to rural areas that are challenging to reach with fibre alone,” he says.

Sponsored case study: Michael Stone offers an update on FTTH projects in the U.S.

According to Fiber Broadband Association’s 2022 Fiber Provider Survey, “there are now a total of 68 million fibre broadband passings in the U.S., up 13% over the past 12 months and up 27% over the past 24 months.”[1] Homes passed is the first step, however, it is the homes connected that helps to reduce the equity gap.

The step to connecting homes can be costly, especially when the distance between homes is large, as is often the case in rural areas. However, the equity gap goes beyond rural communities. According to The New York City Internet Master Plan, “nearly a third of New York City households do not have a broadband connection at home.” This means that a significant amount of investment is needed to close the equity gap, such as the Broadband, Equity, Access, and Deployment (BEAD) Program.

Reducing the equity gap

The BEAD Program aims to reduce the equity gap by providing “$42.45bn to expand high-speed internet access by funding planning, infrastructure deployment and adoption programs in all 50 states, Washington D.C., Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands”. On June 30th, the allocation of funding by state was released, after which, states have had up to 180 days to submit their initial proposals for grant programs. As one can imagine, each state has a very different level of preparedness and varying areas with underserved broadband.

Reflecting on our experience with fibre rollout programs in Europe, we are anticipating that high-level network designs and feasibility studies will be key factors for winning BEAD bids.

The high-level network design requirement is a huge challenge because grant application deadlines are often very tight, and many network and internet service providers (ISPs) lack the resources to complete manual designs within the required time.

This is where network design automation can help network providers, operators and ISPs to save time and resources. Network design automation allows them to define the network architecture and engineering rules to produce accurate plans and costs for strategic planning as well as BEAD and other grant programs. Moreover, they can also run model automation on batches of information to help them evaluate various scenarios quickly and maximise their chance of winning the tender.

The challenge of delivering on budget

A common challenge for operators and providers is delivering their fibre rollout on budget. Being able to accurately calculate costs before a bid submission is essential for developing a strong business case, as well as ultimately impacting the longevity of the company. This is where a network design automation tool can assist by considering costs of reusing existing infrastructure vs. creating new infrastructure, as well as incorporating the costs of equipment into the bill of materials.

Founded in 2000, Setics is one of the leading independent consultancies specialising in the design and management of high-speed broadband network projects, software publishing and digital development territories around the world.

Michael Stone is US Business Development at Setics.