Fibre rollouts shadow DSL in Asia Pacific

Asia Pacific countries are expected to sink approximately $1.45 billion into fibre equipment a year by 2015, replacing DSL and other fixed broadband assets, according to Gartner.

The analyst firm expects deployments in the region to eclipse similar ones in Western Europe, where fibre equipment revenues are only expected to reach $550 million a year in the same period.

Revenue from fibre equipment surpassed DSL equipment for the first time this year as a result of rollouts in Australia, China and Singapore.

Gigabit passive optical networking (GPON) was the most popular fibre technology.

Equipment revenues for DSL is expected to slow to $600 million by 2015, down from $800 million in 2008.

“We’re seeing an increase in the number of bandwidth-hungry applications, we’re seeing a big increase in the number of users in the Asia Pacific region and that’s continuing to expand,” Gartner vice president Ian Keene said.

Despite the continuing rollout of the National Broadband Network, several Australian service providers have continued to pour millions into DSL investments in hopes of gaining a return by the time fibre is rolled out in a given area, making DSL equipment redundant.

While fibre deployments would soon shadow DSL investment in Asia Pacific, Keene said service providers In Western Europe wanted to “squeeze the last bit they can out of their copper infrastructure” rather than dig up streets.

Regulation in Europe, too, would ultimately force service providers to delay new technology rollouts for fear of them costing too much instead of promoting competition.

“The regulations look good at the time to increase competition but they don’t look so good now,” he said. “That holds back investment because the risks are too high.”

Next-generation mobile

Equipment revenues for Long Term Evolution (LTE) mobile deployments across the Asia Pacific and Europe exhibit similar trajectories: $3.6 billion in Western Europe compared to $3.8 billion in Asia Pacific by 2015.

However, Asia Pacific would likely maintain a strong demand for preceding HSPA technologies in coming years, with up to $9.4 billion of HSPA equipment still expected to sell in 2015.

Keene pointed to governments lagging on the required spectrum auctions for LTE deployments as a reason for HSPA continuing to outsell LTE - the opposite of the situation in the fixed line space.

Though equipment revenues were a good indicator of the popularity of one technology over another, Keene prefaced the statistics by noting that up to 70 percent of the total cost of a network could be sunk into ground works, cabling and deployment management.

Even so, Keene pointed to Australia’s fibre broadband deployment under the NBN as a “huge upfront investment”.

“It will be interesting to look back in ten years to see if it will be successful or a total disaster; the jury’s out on that one,” he said.

James Hutchinson travelled to Thailand as a guest of NetEvents.