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Fibre roll-out in Japan
Friday 05 October 2007 13:18:36 by Andrew Ferguson

There is an interesting article over on CNET that looks at the state of the fibre to the home market in Japan. Japan is often seen as being at the vanguard of fibre based connections with 8 million homes having a fibre based connection at speeds of up to 100Mbps.

The costs of the roll-out has put some providers out of business and even NTT (Nippon Telegraph and Telephone) who currently have around two-thirds of the market in Japan are seeing their stocks lower in value due to worries about the amount of investment and discounts offered to customers to get them to sign up. It is this level of discounting that is why so many are signing up, i.e. if you can get fibre it makes sense to as it is cheaper than ADSL variants.

Of course the way of doing business is different in Japan and companies do tend to take a more longer term view than large western companies. A parallel is drawn to the vast amounts of money spent on the famed Shinkansen bullet-train. Combine the different business aims with tax incentives and for the old telephone companies, a decline in revenue from traditional phone lines, it is easy to see why they are so much further ahead.

So how does this affect the UK? Well at present it seems to show that consumers need convincing with lower pricing to sign up to fibre based services, but once a critical mass is reached peer pressure amongst areas like the gaming community can help to push sales. The side effect is pay back periods for the hundred of pounds or more per property passed will get longer and longer, and would UK communications providers get backing for this sort of long term investment.

The perhaps sometimes over hyped 21st Century Network (21CN) network from the BT group is at least installing a large number of MSAN's (a DSLAM that also provides voice services) that can support both copper and fibre based local loops. This should make things slightly easier if fibre does start to move closer to the consumer.

The biggest hurdle would appear to be, what is the compelling task that a 100Mbps connection can do that is not possible by some other method already, and millions of people would pay for? Many will think of high definition TV delivery, but this can already be done via cable and satellite markets, and with some alterations to the platform, is possible via Freeview. If something can be found that will only work over a high speed fibre connection and enough people would want it, providers will have a much more compelling reason to obtain investor backing.

Comments

Posted by herdwick over 9 years ago
It's easy to be "long term" when your bank base rate is zero % !
Posted by CARPETBURN over 9 years ago
Doesn’t explain why other countries with rates not 0% also have 100mbps services though does it? The reason the UK doesn’t have services like this boils down a simple thing...Investment, this country’s suits have the mentality of if we cant make money right now we aint gonna do it. Which is why trade and industry is as good as dead here and we rely on imports.
Posted by CARPETBURN over 9 years ago
Im also sick of hearing things like "and enough people would want it, providers will have a much more compelling reason to obtain investor backing." Which are a load of the smelly stuff.
Do we or dont we want faster services? If we dont why is 21CN even being bothered with?
Posted by csimon over 9 years ago
21CN is more an exercise in cost cutting as far as I can see, rather than a demand for better services. 21CN on its own will not increase speeds. In any event, if there is indeed some sort of propaganda to state that it's to increase speeds then they must surely have done a great deal of market research to find out that it's only people within around 3km of the exchange who want faster speeds, as that is what the effect will be.
Posted by CARPETBURN over 9 years ago
Ill lay money now with anyone thats interested that 21CN will cost more or the same as current MAX based services on a SIMILAR provided product (IE a monthly allowance product on 21CN will cost similar to current MAX services). Even though it should cost BT less (in theory).
Posted by herdwick over 9 years ago
21CN is a systems simplification and efficiency project for BT, it need do nothing for customers in itself. As it happens it will bring about ADSL2+ services and lower cost broadband connections to ISPs. There are no allowances or per GB charging at the wholesale level so who knows that retail ISPs will do.
Posted by herdwick over 9 years ago
"Do we or dont we want faster services?" clearly not, if only about 30,000 users have opted for Be* when it's available to half the population.

Nobody has demonstrated how anyone can make money from fibre at all, so it is a rational decision not to invest. As things stand installing fibre ranks along with burning tenners as an investment idea.

News that Japan is discounting fibre against DSL is hardly encouraging.
Posted by c_j_ over 9 years ago
"I want" is not the same as "I'm willing to pay a realistic price for".

A handful of noisy people say they want faster services. But bandwidth still costs money, and when push comes to shove the noisy people mostly aren't prepared to open their wallets as wide as their mouths. Hence, as pointed out already, the almost invisible status of Be in the bigger picture?
Posted by CARPETBURN over 9 years ago
quote"clearly not, if only about 30,000 users have opted for Be* when it's available to half the population."
I think thats more to do with the fact that most people dont know about them and most people, unlike all us that visit here at TBB dont hunt around for the best service for them personally.
quote"There are no allowances or per GB charging at the wholesale level so who knows that retail ISPs will do."
My point exactly it may or may not be cheaper for ISPs but i bet what we as consumers pay will be the same or higher than current MAX based products of a similar spec.
Posted by herdwick over 9 years ago
If only 30,000 users found Be* after a year or two how many are going to find FTTH or FTTC were it to be available ?

Marketing types will invariably want to charge more for a faster service, that is why they are there - market segmentation, product differentiation, etc.

We could all have FTTH for a tenner a month extra per household if all were connected, but if only 0.2% of households will pay that (the Be takeup figure) the cost becomes more like 5 grand per connected home.
Posted by andrew (Favicon staff member) over 9 years ago
Be has done full page newspaper adverts, and a fair amount of stuff on the tube, so short of buying lots of TV advert space not much more to do.

Perhaps we could ask - who would put all of their pension fund into a FTTH scheme?
Posted by CARPETBURN over 9 years ago
quote"Be has done full page newspaper adverts, and a fair amount of stuff on the tube, so short of buying lots of TV advert space not much more to do."
Ive never seen the newspaper ads, maybe they are in different paper to what i read. If there ads are in a red top newspaper i wouldnt have seen them and i doubt alot of others would have. As for the tube... errr ok so they have advertised in ONE part of the country, hardly what you can call an advertising campaign is it.
Posted by CARPETBURN over 9 years ago
quote"If only 30,000 users found Be* after a year or two how many are going to find FTTH or FTTC were it to be available ?"
Depends totally on who is providing it, i imagine if BT rolled it out tomorrow we would all be seeing adverts from them every half an hour on TV about it from around 7-10pm in the evening, much like they did with their homehub gimmick.
Posted by CARPETBURN over 9 years ago
Also just to add mass advertising does get the punters no matter what the price of the service is. Pipex just over a year ago didnt have a single TV advert, then when the hoff came along they got inundated with new customers. The service they provide is far from the cheapest in the country especially for their most touted TV unlimited service... Yet masses signed up.
Posted by herdwick over 9 years ago
Tube advertising probably covers 30% of their market plus visitors from outside London on top so isn't insignificant. If the FTTH budget has to have some massive £million TV ad campaign on top the economics take a further step back.
Posted by chrysalis over 9 years ago
c_j perhaps me and other so called noisy people just want speeds and stability what the lucky 25% can get now?

Out of all the people defending a current policy of not investing in local loops how many have a good line?

I find it interesting this site in the wake of increasing pressure for fibre puts up 2 articles playing down the technology.
Posted by CARPETBURN over 9 years ago
quote"Tube advertising probably covers 30% of their market plus visitors from outside London on top so isn't insignificant."
Do you have any link etc to demonstrate that? I think that 30% figure is way over the top.
Posted by andrew (Favicon staff member) over 9 years ago
http://www.tfl.gov.uk/corporate/jobs/currentcampaigns/1685.aspx

Suggests three million tube passengers per day, many will be commuters, but add the numbers visiting London.

Remember LLU networks are often heavily biased towards the dense population areas, which is the Greater London area
Posted by CARPETBURN over 9 years ago
quote"Remember LLU networks are often heavily biased towards the dense population areas, which is the Greater London area" I would still dispute that 30% figure, how many people using bethere what are members here live in london and regularly see advertising for bethere on the tube? i cant believe its 30%, freely admit i may be wrong, but i dont for a second believe 30% of betheres probable customer base is londoners who saw a tube ad.
Posted by CARPETBURN over 9 years ago
If it was that simple why dont other ISPs just spend money on tube ads and not bother with TV ads? I bet the new Wi-max service from whats left of pipex which will only cover manchester to start will have a mass marketing campagin of leaflets, banner ads all over the net and god knows what else.
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