Household penetration of fixed broadband in China reaches 10.6%

Telecom Lead Asia: Household penetration of fixed
broadband in China has reached 10.6 percent.

China ranks 34th in the world in terms of household penetration
and that there is still plenty of room for broadband growth in the country.

The Chinese government’s national convergence plan is
designed to accelerate broadband market growth, principally by raising the
level of competition in the broadband market.

In particular, cable operators and China Mobile will be
allowed to break the broadband monopoly held by the two major fixed broadband
telcos, namely China Telecom and China Unicom, in their respective territories.

To maintain their competitive advantage, China Telecom
and China Unicom have been increasing their investments in fiber infrastructure
since 2010 and are committed to increasing fixed broadband network investment
in the next three to five years,” said Jane Wang, Ovum’s senior analyst and
author of the report.

While xDSL is the dominant Internet access technology in
China, it is being challenged by FTTx.

The year-on-year growth rate of FTTx connections was far
greater than for ADSL connections in 2011, and it is forecasted that investment
by China Telecom and China Unicom will expand China’s FTTx subscriber base to
more than half of the worldwide total by 2015.

The number of FTTx connections in China is expected to
overtake the number of xDSL connections in 2016. However, ADSL will not disappear
completely, especially in rural areas where more time will be required to roll
out FTTx.

FTTx will grow rapidly to become the main broadband
access technology in China. Ovum forecasts that China’s FTTx subscriber base
will reach 76.5 million in 2015, representing more than 50 percent of the
worldwide FTTx subscriber base.

According to their most recent annual reports, China
Telecom and China Unicom will spend more than half of their capex on FTTx
infrastructure in 2012. And the decreasing cost of FTTx components will also
accelerate market growth.

ADSL will not disappear quickly, especially in the rural
areas where more time will be needed to roll out FTTx. FTTx rollout will start
from major cities and new buildings, from communities that have strong demand
for high-speed broadband networks, and from areas where it is relatively easily
to upgrade the existing network.

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