Broadband uptake and bandwidths are on the rise throughout Asia, driven primarily by demand for video content. Geert Matthys, Vice President of Customer and Product Management for Technicolor Connected Home, Asia Pacific, explains some of the factors determining uptake, and the technology choices being made to provide broadband services in the region.
Matthys: The APAC region as a whole is growing. We see a market globally for broadband and set top boxes worth $6.2 billion and growing in 2016 and 2017, but we need to look deeper into those numbers.
When we look at broadband by itself, we see a slight decrease towards 2018. This is because fiber in China is reaching a peak. We saw in 2015 and 2016 big deployments in China, but China has reached its peak. There is price erosion happening, and fiberization is going down.
That does not mean the rest of Asia Pacific is declining. On the contrary, what we are seeing is a huge increase in broadband demand in Asia Pacific outside China.
Matthys: First of all, we see tremendous growth in cable broadband across the region. In Australia and New Zealand, we are seeing the adoption of newer technologies such as DOCSIS 3.1. In markets like Japan and Korea we see DOCSIS 3.1 starting to appear, and a move to higher channel bonding.
In China and South East Asia, and even in India, we are seeing a move from pure modems to devices that are WiFi-enabled. These are becoming the standard. This is particularly so in India. India is a very small market today. The overall broadband market in 2015 was $65 million in 2015 compared to $1.7 billion in China. And those two countries have roughly the same population.
India is rather small right now but is ready for expansion, and that expansion is going to be cable broadband along with LTE and fiber. Those three are the main technology drivers in India.
Matthys: Existing infrastructure is part of the answer to that question. In Australia and New Zealand, and in North East Asia, we have existing co-axial cable infrastructure, and operators like to use that co-axial cable as much as possible because putting new cables in the ground is extremely expensive, especially the last mile. So countries that have existing cable infrastructure use that cable, but countries that do not have that infrastructure — India to a certain extent, but also South East Asia — go for fiber or for wireless technologies when they are planning new deployments.
And there is another aspect to wireless. Some countries in South East Asia are geographically split. Indonesia, for example, has many islands and you can’t pull a cable to all those islands, so LTE provides a solution for people who are very remote.
Matthys: A wired technology will give you faster speeds than a wireless technology, like LTE. Although the wireless technologies like LTE are making efforts to improve their performance. Right now we have LTE Cat 4 as a standard in some of the South East Asian countries giving you 150 megabits per second downlink. The next thing coming is Cat 6, which will double that speed up to 300 megabits per second. That is not at the same level as the 1 gigabit per second or potentially 10 gigabits per second of fiber, but you cannot put fiber economically into all the remote areas.
Matthys: DOCSIS 3.1 can reach 10 gigabits per second and at that speed it competes one-on-one with fiber. Like fiber it is a shared medium, so the technologies are on par, so yes, DOCSIS 3.1 can compete with fiber. But fiber is also improving. So there will be another step beyond 10 gigabits per second. This is a war for speed, but with the present technologies, the short answer is yes, they can compete.
Matthys: That is absolutely correct. Especially in China I foresee tremendous growth in IPTV subscriber numbers and IPTV set top box deployments. This is largely driven by the Chinese Government’s decision to stop certain content being reserved for cable operators. Going forward, that content is going to be made available for all telcos. With that content available the number of IPTV subscribers will grow rapidly. I have seen forecasts for between 20 and 40 million additional subscribers year-on year. It is going to be big.
Matthys: The IPTV opportunity in China is one where we are determined to play. I see an opportunity in North East Asia, specifically in Japan, on the set top box side.
I see global growth in cable broadband. I see that taking off everywhere, but especially in India as part of the overall growth of broadband in India. These and LTE will be the key growth areas and the areas of focus for Technicolor.Show less