Fibre roll-out in Japan
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.