Understanding the Japanese Broadband Miracle · 2020. 1. 3. · Digital mobile TV z “One Segment...
Transcript of Understanding the Japanese Broadband Miracle · 2020. 1. 3. · Digital mobile TV z “One Segment...
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Understanding Understanding the Japanese Broadband the Japanese Broadband
MiracleMiracle
April 4, 2007Taka Ebihara
Office of the Japan ChairCenter for Strategic and International Studies (CSIS)
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2Copyright (C) CSIS 2007 All Rights Reserved.
Agenda
Broadband Market in JapanMarket Statistics
Broadband Services
Competitive Landscape
Broadband PoliciesPolicies Accelerated BB Deployment
Policy Implications
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Broadband Market in JapanBroadband Market in Japan
Market StatisticsBroadband ServicesCompetitive Landscape
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Snapshot: Japanese Broadband Market
1,000 miles
Tokyo
Osaka
Japan (US)Population: 127 mil, (290 mil)Households: 50 mil, (110 mil)Geography: 380,000 km2
BB Subs: 25 mil*, (53 mil**)BB Penetration: 17.6%*** (16.8%***)
11th (12th)
*As of Sep 2006 (MIC: Ministry of Internal affairs and Communications, Dec 2006 )
** As of Jun 2006, “Mobile Wireless” excluded (FCC, Jan 2007) *** As of Dec 2005 (OECD 2006)
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BB Penetration Rate & Population Density
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Icel
and
S. K
orea
Neth
erla
nds
Denm
ark
Switz
erla
ndFi
nlan
dNo
rway
Cana
daSw
eden
Belg
ium
Japa
nU.
S.U.
K.
0.0
100.0
200.0
300.0
400.0
500.0
600.0Broadband penetration (subscribers per 100 inhabitants, 2005)Population density (inhab/km2, 2004)
Broadband Penetration
Population Density
Source: OECD 2006
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Price for 1Mbps Bandwidth
Source: ITU Internet Reports 2005
13.50
12.20
10.50
8.30
7.30
7.30
4.90
2.50
2.00
1.80
0.80
0.70
U.K.
Belgium
Canada
Hong Kong
Netherlands
FinlandU.S.
Sweden
Iceland
Taiwan
S. KoreaJapan
US Dollar / month
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Growing Broadband Market in Japan
Source: Ministry of Internal affairs and Communications (MIC), Dec 2006
1999
5
10
20
2001 2002 2003 2004 2005
FTTHFTTHFTTH
DSLDSLDSL
CABLECCABLEABLE
In Million
3.5M (14%)
7.2M (29%)
14.4M (58%)Total: 25 million
20063Q
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Broadband Net Increase
0
1
2
3
2002 3Q 4Q
2003 1Q 2Q
2003 3Q 4Q
2004 1Q 2Q
2004 3Q 4Q
2005 1Q 2Q
2005 3Q 4Q
(In Million)
DSLFTTH
Source: MIC, Mar 2006
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9Copyright (C) CSIS 2007 All Rights Reserved.Source: NTT EAST and NTT WEST (Apr 2007)
DSLFTTH
DSL increase/monthFTTH increase/month
Broadband Subscribers of NTT
•FTTH: 6.1 M•DSL: 5.3 M(As of Mar 07)
0
1
2
3
4
5
6
2002Sep
2003Mar
2003Sep
2004Mar
2004Sep
2005Mar
2005Sep
2006Mar
2006Sep
2007Mar
Tota
l (M
illio
n)
-200
0
200
400
600
800
1000
1200
1400
Mon
thly
Incr
ease
(Tho
usan
d)
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0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
FTTH (100Mbps)JPY4,100
ADSL (47Mbps)JPY2,500
ISDN (64kbps)JPY2,80064k
47M
100M
JPY5,590 = $48
ISPJPY700
ISPJPY850
Modemrental
JPY540
JPY5,200 = $44�1USD=JPY117�
ONU rentalJPY900
ISPJPY1,000
Indoor wiring
FTTB (100Mbps)JPY2,500
ISPJPY600 JPY3,950 = $34JPY350
Speed(bps)
POTSJPY1,700
POTSJPY1,700
VoIPJPY500
VoIPJPY500 JPY200
JPY6,700 =$57
Modem rental
FTTB : For buildings and apartments (Optical fiber + VDSL)
Monthly Charges of Broadband Services
(JPY/Month)
FTTH
FTTB*
ADSL
ISDN
Adapted from NTT EAST Corporate Information
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Source: Information NTT EAST (As of Mar 2006)
Broadband Home Passed
98%=25M households
Home Passed
75%=18M households
In case of NTT EAST (Largest incumbent)
(FTTH)
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BB Services Market Share
eAccess13.4%
Softbank (Yahoo! BB) 35.7%
Acca Networks8.1%
Incumbents (NTT East & West)
38.8%
Others3.9%
DSLDSLOthers11.7%
USEN7.3%
Electric utility
companies15.0%
Incumbents (NTT East & West)
66.0%
Sources:-DSL & FTTH (as of Sep 2006),
MIC, Dec 2006- 3G Mobile: as of Jan 2006, -3G Mobile (as of Dec 2006), TCA: Telecommunications Carriers Association
FTTHFTTH
KDDI 39.8%
Softbank (fmr Vodafone)
9.4%
NTT Docomo
50.8%
3G Mobile3G Mobile
63.2M
Mobile Total (2G+3G+PHS): 94.5M
14.4M 7.2M
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Competitions in Broadband Market
Price & speed competitions (2000~2005)Average monthly price down 47% in 5 years$56 /mth (1.5Mbps) $30 /mth (50Mbps)
Services and content competitions (2005~)Quality IP telephonyBroadcasting TV over fiberInteractive TVFree “ad-supported” video streaming (GyaO)
Source: InfoCom Research
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Towards Ubiquitous Net SocietyNext Generation Networks Initiatives
Super 3GCellular
Super 3GCellular
Conventional TV (RF TV)
Broadcasters
Home Networking
Interactive TV(IP TV)
Internet Access
Internet Telephony(VoIP)
InternetConventional
Telephony (PSTN)
ISPsISPs
Everything over FTTH & Super 3G CellularQuad Play & BeyondHome Networking Solutions
Everything over FTTH & Super 3G CellularQuad Play & BeyondHome Networking Solutions
FTTH
SeamlessRoaming
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Advanced mobile phone applications e-payment
Electronic wallet
Retail shop Train ticket
Vending machine ATM
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Advanced mobile phone applications Digital mobile TV
“One Segment Broadcasting” or “One Seg” based on ISDB-TAvailable nationwide by the end of 2006
Delivering richer content (visuals, related info, URLs)Benefits
Major broadcasters: more viewership, more ad revenuesMobile operators: increasing data ARPU, e-commerce opportunities
“One Seg” enabled devices
Service availability as of Apr 2006
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Japanese Broadband Japanese Broadband PolicPoliciesies
Policies Accelerated BB DeploymentPolicy ImplicationsChallenges for the Future
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u-Japan strategy & estimated impact
Estimated economic impact in 2010Ubiquitous networking industries: $730 billion*
Source: White Papers for Information Communication 2004
*1 USD = 120 JPY
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Mitigating Digital Divide: Gov’t financial supports for broadband
Primary beneficiaries are municipalities
For public sectorMunicipality intranet projects (schools, CCs, libraries)Rural FTTH projects (details in later slides)
For both public and private sectorsZero- or low-interest-rate financing*
For private sectorTax incentives*
Deferred income tax paymentReduction of fixed asset taxes for designated network equipment
*a very limited financial impact for the private sector due to a zero-interest- rate policy of Bank of Japan
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Gov’t-financed rural BB deployment: Rural FTTx Projects
Collaboration of municipalities and service providers1/3 of construction costs is subsidizedMunicipality-owned fiber networks to be wholesaledLevel playing field must be ensured
Source: MIC
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US-Japan Telecom Policy Comparison
JPNUS: Bell Companies US:
Cable1996 Now 96-Now
Local copper loops unbundling Yes Yes Yes N/A
Line sharing on copper loops Yes YesNo
new rules since 2003
No
Local fiber loops unbundling Yes YesNo*
new rules since 2003
No
Open access to incumbent carrier’s Internet backbone Yes Yes
No new rules
since 2005No
* Some exceptions for high-capacity leased lines for enterprise use
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Implications of Japanese BB Policies
Unbundling mandates for both copper and fiber loops
Line sharing requirement for primary lines
Mixed results in terms of “facility-based” competition
Fierce price competitions in DSL market forced incumbent
operators to move up to FTTH market
A role of national ICT strategies: “e-Japan” and “u-Japan”
Investors’ comparatively better understanding on long-term
investments
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Conclusion
Fastest and least expensive broadband
Reasonable non-incumbent (CLEC) market share
Mixed results of facility-based competition
National ICT strategies played a significant role
A need for a good balance between long-term and
short-term development goals
Maintaining incentives for innovative investment is
the key to sustain broadband deployment