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FTTH in Japan

FTTH in Japan. Lessons from a Broadband Society. AFL Telecommunications:. AFL = Alcoa Fujikura, Ltd. Established in 1984 to provide optical products for power utility applications. Headquartered in Franklin, TN. Major manufacturing operations in: Duncan, SC Belmont, NH Mexico and the U.K.

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FTTH in Japan

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  1. FTTH in Japan Lessons from a Broadband Society

  2. AFL Telecommunications: • AFL = Alcoa Fujikura, Ltd. • Established in 1984 to provide optical products for power utility applications. • Headquartered in Franklin, TN. • Major manufacturing operations in: • Duncan, SC • Belmont, NH • Mexico and the U.K.

  3. Overview: • Japan is experiencing widespread deployment of fiber-to-the-home (FTTH). • Deployment is driven by a competitive telecom environment. • Power Utilities are a key player in this environment. • Competition and economy of scale have enabled development of inexpensive and scalable technologies. • Public Power can help lead the United States toward similar competition and benefits.

  4. FTTH In Japan: Jul. 2003 OF Networks Co., Ltd. Private research results

  5. Rate of Deployment: Number of FTTH Subscribers in Japan 1,200,000 – 1,300,000 587,000 81,000 increase / month 2003 June July End of 2003 Aug. 2003 OF Networks Co., Ltd. Private research results

  6. Why this deployment rate? • Japan has a national broadband policy. However: • FTTH deployment is not government subsidized. • Labor rates to install new cable are generally higher than labor rates in the U.S. • High population density enables DSL of 10 Mb/s. DSL, cable modem, and wireless are all widely available. • The nationwide number of landline voice subscribers is actually decreasing. • So, why FTTH?

  7. Reasons for FTTH Deployment: • Competition • Competition • Nothing • Nothing • Competition The Winner gets there “first with the most.”

  8. The View from Tokyo: TEPCO (Fiber) Cable TV TEPCO (CATV) Usen (Fiber) Usen (music) NTT Fiber NTT Telephones

  9. Who is Competing? • NTT • Incumbent • Largest deployer of FTTH • USEN • Sells data, video, and music on demand • Second largest deployer • 5 of the top 7 deployers are power utility companies. • Some municipalities have deployed their own networks.

  10. Implications for the United States: • Where there is infrastructure-based competition, no one can afford to be “overbuilt” with a superior technology. • Japan is deploying a strong national telecom infrastructure by encouraging competition. • Power utilities can be a key competitor. • U.S. Public Power companies serve 40 million Americans. • Typically in areas with a shortage of high speed data options. • Therefore, Public Power is a good place to start.

  11. Services Available over FTTH: Jul. 2003 OF Networks Co., Ltd. Private research results

  12. Services Available over FTTH: • Where is the so-called “killer application?” • Japan’s carriers have found a solid business case for future-proof media in today’s applications. • FTTH offers good cost-distribution. • FTTH also means that your competitors are not going to render you obsolete (assuming you have competitors).

  13. Technology Behind the Services: • Designed around two objectives: • Deliver enough bandwidth to support all services. • At price points which allow cost-recovery for data-only services. • Low Cost of Entry • Usually Ethernet-based. • Security and admin features to enable operation in the telecom environment. • Highly scalable. $400-$450/sub in “last mile” electronics

  14. Cost of Services: Aug. 2003 OF Networks Co., Ltd. Private research results

  15. Cost of Services: • Japan: • Average consumer pays $46-$63 per month for FTTH service (anywhere from 10 Mb/sec to 100 Mb/sec). • United States: • T-1 line (1.54 Mb) in Public Power coverage areas is . . . $800? . . $1500? . . . • T-1 lines and Japan’s FTTH are not a direct technology comparison. However, • Clearly, Japanese consumer has more and better options. • How many of our schools, small businesses, and local government facilities could use a $50 FTTH connection?

  16. Lessons Learned: • FTTH can be a low cost-of-entry / low risk proposition. • Competition in telecommunications is good. • More competition is better. • Power utilities can play a key role in creating facilities-based competition. • Public Power is willing to compete, and can take a lead role in building a new national telecommunications infrastructure.

  17. Questions?Guy SwindellAFL Telecommunications(864) 486-7236guyton.swindell@alcoa.com

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