global FTTX Market to Grow at 26% Compound Annual Rate Through 2010

KMI: Over the next five years, worldwide spending on fiberoptic systems for broadband access will total $77 billion - growing from $8 billion in 2006 to $21 billion in 2010. The system figure includes transmission equipment, fiberoptic cable, and passive apparatus such as cabinets, closures, and splitters.

All-optical architectures (that extend fiber all the way to the customers’ building) will serve an increasing percentage of the world’s broadband s ubscribers through the five-year forecast. For example, in 2005, only 7% of the world’s broadband subscribers were on FTTB or FTTP networks, but by 2010, this percentage will have increased to 27%.

1. Service providers already offering ADSL will extend fiber further into their loop plant to supp ort higher speeds. Such upgrade FTTx deployments are underway in advanced markets like Canada, Japan, Korea, the Netherlands, Singapore, and the U.S. Many of the carriers that have launched such upgrade projects will accelerate fiberoptic deployments in the next five years – passing or turning-up service in more homes per year.

2. Operators offering broadband access for the first time are using fiber –either to enter an established market as a new competitor or to benefit from its cost advantages for bandwidth, distance, and density requirements. Examples of new broadband service providers installing FTTx can be found in both advanced telecom markets (N. America, W. Europe, parts of Asia) and in emerging markets (E. Europe, Latin America, Africa, and much of Asia).

In either case, the operators are using fiber to improve their competitiveness, to achieve operating efficiencies, to address demand for faster Internet service, or to pursue opportunities with digital video or other new services. Mack explained that the factors affecting operators’ decisions concerning fiberoptic architectures vary among the world’s markets.

China, for example, has a large market for FTTB systems associated with the massive construction projects underway in large, dense metropolitan areas. In Japan, the competition between carriers is a key factor in the widespread use of FTTH.

These two markets together represented half the worldwide market for fiberoptic products in broadband access networks in 2005. With Korea, Australia, and several emerging markets, the Asia-Pacific region was 70% of the world market. Although Europe and other regions will have faster growth in the next five years, the Asia-Pacific region will remain more than 50% of the worldwide market for fiberoptics in FTTx networks through 2010.

KMI’s r eport covers the installation of fiberoptic systems by architecture and by geographic region. Th

worldwide Markets for Fiberoptics in Broadband Access Netwo rks Publ 20060822