Why FTTH is Developed Difficulty in China

There are three major obstacles to explain why FTTH is developed difficulty in China.

Obstacles 1: lack of broadband information content that meet the FTTH access. 

The FTTH access methods can provide users with ultra-high-speed bandwidth, particularly suited to provide users with a variety of value-added business services. In a foreign country, the most common value-added services: VOD (Video On Demand), news, gaming, including VOD are mainly adult programs.

In developed countries, in point of time VOD often costs tens of dollars, amounting to hundreds or even a few hundred dollars. FTTH carriers such high fees for value-added services greatly shorten payback period, which is a huge support for investment is still very high FTTH access, to enable operators FTTH access becomes profitable. Almost all of the developed countries to promote FTTH profitable operating model based on value-added services. However, in China precisely above FTTH upon which a profitable operating model, value-added business, strictly limited by law and policy in our country because of the information content, which is our basic national conditions.

In fact, in recent years, the vigorous development of the digital TV business, also due to a serious lack of value-added business information content, digital TV operators have yet to find a profitable operating model.

Obstacles 2: Monopoly of media and communications industry in China FTTH access another significant advantage is set to provide users with broadband triple-play CATV and telephone access.

Provide access to a wide range of business, but also an effective means to shorten the FTTH investment recovery cycle. Of CATV right to operate is not open, but is unlikely to open in the next 10 years or 20 years, telecom operators can’t provide the CATV access services through FTTH access network to the user. Similarly, domestic CATV operators are unable to obtain the right to operate telephone service access.

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Therefore, in the country there is no telecommunications or CATV operators to provide broadband FTTH network alone, CATV and telephone triple-play integrated access services, media and communications industry monopoly makes present stage specific FTTH access methods lack a variety of business support, so that operations can be profitable FTTH access mode is more difficult to achieve, regardless of the telecom operators or the CATV operators of FTTH generally not enthusiastic.

Obstacle 3: Chinese telecommunication service consumption ability is low.

At present, China's mainstream broadband access technology is ADSL, accounted for more than 90% share of the broadband market, mainly to meet the ordinary users of the Internet needs a bandwidth of 512K to 2M monthly fee ranging from 30-100RMB, which developed eastern cities, such as Guangzhou, Shenzhen, Shanghai, Beijing, 100RMB per month, the mainland cities of $ 50 per month.

The FTTH access bandwidth of up to 100M, is nearly 100 times the ADSL is not to say that FTTH monthly fee is 100 times that of ADSL or at least 10 times? The answer is no. Because, according to the laws of the market economy and the people has formed a consumption habits, FTTH broadband monthly fee must be with our country economic development level and the consumption habit of the people has formed, that is to say, the FTTH monthly usage fees must ADSL current monthly use fee considerable.

About 2 years ago,  the Wuhan Dong hu a district in the country the first to achieve FTTH commercial access the beginning monthly fee of $ 1000, was the strong protest of the households, the two months fell to 200 RMB, to become a joke in the industry, is said to now its monthly fee is almost the same with ADSL.

This shows that China's economic development level determines people telecommunications services spending power is still relatively low, the access network use fee is still relatively low, relatively high investment in FTTH access network (currently about more than 3000 yuan per line), a mere dozens of RMB monthly fee for FTTH access operators can’t provide a profitable operating model, not to talk about the payback period.

In developed countries, FTTH access user fees generally amounting to $ 500 or more, the rate is undoubtedly compatible with the developed countries, the level of economic development. Analysis by a simple calculation, the $ 500 monthly fee enables FTTH access network investment recovery period is shortened to four years, plus other value-added services revenue FTTH access in the developed countries can achieve profitable. This is why FTTH in Japan and the United States can be an important reason for the rapid economic development.

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