The main focus of the discussion is on the countries of eastern Asia that have made most rapid progress in adoption of broadband: Japan, China, Taiwan, South Korea and Singapore.
Looking at the region as a whole, the two most striking and most widely discussed developments in broadband adoption in the region are:
To maintain a balanced view of these developments, it is important to bear in mind that in Japan, despite the scale of investment in FTTH, DSL subscribers continue greatly to outnumber FTTH subscribers at present, and that in South Korea cable modem subscribers are quite significant, despite the success of DSL. Furthermore, there are now more DSL subscribers in China than in either Japan or South Korea, which demonstrates that China is likely to become the most important country in the region for broadband development.
Government Influence Important
Government policy has played a strong role in influencing the rollout of privately-funded broadband infrastructure through (a) a regulatory environment that encourages investment by telcos, and (b) financial incentives.
The actual take-up of broadband services by paying customers has been slow until competition forced prices down. We see little evidence that higher take-up of broadband has been driven by the ability to access new services, though the South Korean experience shows that consumers can be keen on new services – so long as they do not have to pay a substantial premium for the “pipe” which delivers those services!
Conclusions from FTTH in Japan
Japan has been the first country where FTTH has been deployed extensively on a commercial scale – only in late 2004 did we see any comparable move elsewhere, as Verizon began a wide-scale rollout of fibre in its access networks. Take-up of FTTH-based services in Japan has been slow.
Competition between various DSL providers, forcing prices down, has encouraged a strong take-up of broadband services in Japan. Competition with DSL and competition between different FTTH service providers has also pushed down FTTH prices in Japan, to the point where growth in FTTH take-up at last begins to look encouraging. It seems that few customers are willing to pay a significant price premium for FTTH, despite the higher performance it offers, so long as DSL with adequate performance is available.