Three Pillars of FTTH Speed-up Await Consolidation

For years, with the substantial progress of the national "Triple Play" pilot work and the issuance of opinions by seven ministries to accelerate the construction of fiber broadband networks, the development of China's broadband operation market faces new opportunities and challenges. Accelerating the development of broadband networks and services, actively introducing new technologies, and further enhancing network bandwidth have become a consensus among major telecom operators.

Three Factors Driving FTTH Forward

Since the beginning of this year, major operators have coincidentally and significantly increased their efforts in FTTH construction. The reasons include not only the huge driving force of national policies mentioned above, but also the development of the industry chain and the operators' own operational requirements.

First, driven jointly by all parties in the industry chain, the price of PON equipment has declined very rapidly, with the price drop of FTTH ONU equipment being particularly evident. In the overall construction cost of FTTH, the price of ONU can even account for half. Therefore, the price reduction of ONU equipment can significantly lower the per-subscriber construction cost of FTTH. In particular, due to well-known reasons, the occupancy rates of newly built buildings in China vary and are generally not high. In comparison, under conditions of relatively low equipment installation rates, FTTH and FTTB are already on par in terms of comprehensive construction costs at the initial stage of network deployment. If later maintenance costs are considered, FTTH has even more advantages. Therefore, adjusting and optimizing the FTTx construction model and promoting FTTH network coverage can bring tangible cost savings to operators.

Second, the pilot advancement of Triple Play is bound to become a catalyst for the popularization of broadband video services in China, especially standard-definition and high-definition IPTV, thereby driving the rapid adoption of services such as video sharing, video education, and video entertainment, making higher access bandwidth a universal demand for households. In addition, the promotion of Triple Play has given rise to many new service forms such as triple-screen simultaneous viewing, triple-screen interaction, and triple-screen shifting. These new service forms also greatly increase the requirements for basic access bandwidth. The original 8M or even 20M access bandwidth of FTTB/N will soon fail to meet users' bandwidth demands, making it necessary to introduce FTTH to break through the constraints of traditional copper cable technology and equipment networking on per-subscriber bandwidth.

Third, the overall evolution of telecom operators' networks is currently at a crossroads of transformation. On the one hand, traditional voice switching equipment faces issues of decentralization and aging replacement. The new IMS network is currently in the process of pilot verification. Whether the large-scale deployment of FTTH can be leveraged as an opportunity to accelerate the IP-based process of voice access terminals will be crucial to the smooth evolution of the future core network. On the other hand, with the increasing requirements for multi-service bearing, operators' metropolitan area network architecture and bearing control are also under considerable pressure. Especially after the introduction of FTTH to break the access bottleneck, higher service experience assurance requirements and on-demand management and control of larger Internet traffic pose huge challenges to the planning and construction of metropolitan area networks. It is necessary to possess the capability of rapid perception, control, and bearing of multi-user and multi-service in advance.

However, it should also be noted that the introduction of FTTH is by no means merely a change in equipment or a model, but rather a transformation and reengineering of the entire broadband network service operation process of telecom operators, and also a major test of their large-scale operation capability. Therefore, for the current large-scale deployment of FTTH by Chinese operators, the most critical factor and the biggest challenge is how to systematically promote the network construction, operation support, and market promotion of FTTH through the collaboration of front-end and back-end departments, each performing their own duties and coordinating with each other, and to quickly integrate FTTH applications into the daily operation processes and system construction of enterprises, so as to truly possess the capability of large-scale application and operation of FTTH at an early date.