Eastern and Northern Europe driving broadband and FTTH growth

At the Broadband World Forum Europe held in Paris last week, several announcements revealed that Eastern European countries have been driving broadband growth in fiber to the home (FTTH) and fiber to the building (FTTB) deployments. The FTTH Council Europe presented the results of a survey conducted by iDate on the progress of FTTH/FTTB in Europe.

Roland Montagne, Analyst at iDate explained:

“The build up of fiber-to-the-home and fiber-to-the-building (FTTH/FTTB) infrastructures in Europe has been growing with 120 new projects added in the last 6 months to a total of 233 projects at the end of June 2009. Public entities (e.g. municipalities and utilities are playing a major role pushing new projects and today Europe (not including Russia) has more than 2 million FTTH/B subscribers and 13 million houses passed, an 18% growth for the last 6 months. With Russia, the number of subscribers is 2.8 million for about 20 million houses passed.”

He highlighted that for the last 6 months, Russia has been the fastest growing country with about 100,000 new subscribers. Russia now has 7.5 million houses passed in FTTB, positioning Russia as the most active country in Europe for developing fiber to the home access.

UK, Germany and France under 1 percent penetration rate for FTTH

The results of the survey, which was conducted by directly contacting the project developers, show that Sweden is the leading country in FTTH penetration, with a rate of 10.8% of the population equipped with fiber access at home. Northern and Eastern Europe countries such as Norway, Slovenia, Denmark, Iceland, Lithuania, the Netherlands and Slovakia also show fast growing rates of subscriber uptake for FTTH/B. Curiously, in terms of subscribers compared to the total population, Western European countries like France, UK, Germany and Spain are lagging behind and are not yet considered in the survey because the rate of penetration is under 1%. Italy is the only Western European country to show up in the list at 11th place with 2 million houses passed and about 320,000 subscribers. Surprisingly, the survey shows France is the second country in terms of houses passed with more than 5.2 million households passed, but in June 2009, France showed a mere 250,000 subscribers, less than 5% of the houses passed. Comparatively, Sweden shows a rate of 43.6% of the houses passed as subscribers.

France Télecom has stopped deploying FTTH in France

Roland Montagne also says that competition has been driving new FTTH/FTTB projects. He mentioned that more that 56% of the FTTH/B projects were conducted by public entities such as municipalities and utilities. Incumbents originated only 10.8% of the projects. In France all FTTH/FTTB projects are on hold. France Télécom has decided to stop all its developments because of a supposedly “regulatory hole” regarding rules on installing fiber in the building and sharing it with other operators.

The controversy is growing in France especially around the so called “white zones”, mostly rural areas, where no operator wants to invest because the ROI is too small. Neither France Télécom nor the other operators are willing to invest in these areas, but France Télécom already holds a competitive advantage because when it went public 12 years ago, it had been given most of the existing telephone network (paid by the tax payers) which it can update now at lower cost with no digging of trenches necessary (note: it is said that digging trenches represent about 2/3 of the cost of a new FTTH network). This week, four French Ministers in charge of digital technologies at different levels are holding a forum to discuss investing in digital infrastructure, combining public and private investments.

Broadband access booming in Eastern Europe, IPTV in France

Speaking of DSL and cable broadband access , a survey made by Point Topic, a UK firm, shows that the development of DSL and cable access is still growing at a yearly rate of 13% in Europe, from 119 million subscribers in Q2 2008 to 135 million in Q2 2009. As China has become the first broadband country of the world with 94 million subscribers, ahead of the US and Japan, Germany France and UK hold the next places in the ranking.

Eastern Europe’s broadband subscribership is growing at a stronger rate of almost 30%, about the same as Latin America. The report mentions that Europe continues to lead the IPTV success story with 13.6 million subscribers, a 51 percent growth over the twelve months leading up to July 2009. In the second quarter 2009, there was a healthy 6 percent growth in Western Europe – where France remains the “champion” IPTV country with more than seven million subscribers – and 12% in Eastern Europe, where new services in countries such as Poland, Czech Republic, Slovenia and Russia are in demand.

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