Drivers of Broadband Access

Broadband access is incredibly important: The type of access you have may very well determine how well you're able to grow both professionally and personally, affecting your productivity, leisure time, education, health care, safety, and security.

Initially, the main drivers propelling subscribers to demand broadband access were the users' desires to find information valuable to them, to be connected, and to surf the Web. While these were initially exciting new services, we now assume them as a standard part of daily life; those who have broadband access can no longer imagine life without it. But today additional motivatorssuch as the desire to experience the increasingly content-rich multimedia spectacle of the Web and the desire to shuttle, share, and even stream digital photos, music, and videoare driving us to seek even more bandwidth and performance from access lines. We are really just at the beginning of an era of spectacular advanced multimedia applications, so there is still much work to be done in the area of broadband access.

Even as there has been steady growth in the number of broadband access lines around the world, the industry is also developing and introducing new high-performance options, tailored to the demands of a high-definition, on-demand multimedia world. As the world transitions to the realm of digital high-definition TV (HDTV), we will embark on a journey into the second generation of broadband access, looking upon conventional ADSL or cable modems as if they were no more than basic telephone lines. To show just how rich this field is, Table 12.1 lists the available and emerging broadband media options, all of which are covered in this chapter and in Part IV.

Broadband is to this decade what cable TV was to the 1980s, evolving from a leading-edge service to a standard offering with mass adoption. Worldwide, broadband linesDSL, cable modem, and other broadband connections (including fiber, powerline, and wireless)have now surpassed the 200 million mark, with over 229 million subscribers noted as of the first quarter of 2006. The current growth rate is more than one new subscriber every second. Naturally, the newest broadband markets are showing the fastest growth. According to Point Topic ("World Broadband Statistics: Q1 2006," www.point-topic.com), the United States remains the largest broadband market, with more than 48.3 million lines. China comes in second place, with 41.2 million lines; Japan is third, with 23.4 million lines; and South Korea is fourth, with more than 12.4 million lines. Of the Western European countries, Germany ranks highest, with 11.5 million lines, followed by the United Kingdom and France, with 10.8 million lines each. Just as we expect the economies of China, India, and Russia to grow by leaps and bounds in the coming years, theirs are also the markets where broadband is anticipated to see the largest growth in the near term. China is expected to surpass the United States in the number of broadband subscribers by the year 2007.

The big and established broadband countries have achieved high penetration and are now growing less rapidly than in the past. The slowest-growing region in 2005 was Asia-Pacific, where countries known for their love of technology, such as Japan, Singapore, South Korea, and Taiwan, are exhibiting saturation (although Malaysia, Australia, and New Zealand are now showing rapid growth). Africa and the Middle East, while having the smallest share of broadband lines, is now the fastest-growing region of the world, percentage-wise. The next-fastest-growing regions are Latin America and eastern Europe, both of which still have a small share of the world's broadband access. Southeast Asia shows the greatest increases in terms of absolute numbers (i.e., number of new subscriber lines), with India and China responsible for the majority of the growth.

As of early 2006, DSL had 66.72% of world broadband market share, with cable operators accounting for 23.64% and fiber-to-the-x (FTTx, where x means premises, curb, building, or home) operators coming in with 8.84% of the broadband lines. Other technologies, including broadband wireless and powerline communications, account for the rest of broadband usage. The DSL Forum (www.dslforum.org) expects to see 500 million DSL subscribers by 2010. It appears that cable modems and alternative technologies are gradually losing out to DSL, and Point Topic predicts that in the short term, DSL is likely to see a boost in market share worldwide. However, due to the growth in FTTx, particularly in China, Japan, and the United States, fiber deployment, especially passive optical network (PON) technology, is on the rise worldwide, as is wireless broadband access, thanks to the many new wireless broadband systems that have emerged and are now poised to take off. To keep track of the fast-paced environment, you can check the latest Point Topic "World Broadband Statistics" reports at www.point-topic.com; published several times a year, they provide detailed statistics by country as well as region, offering the most up-to-date glimpse of broadband access deployment globally.

What drives a service provider to consider deploying broadband access in the first place? One reason it may do so is if it is experiencing slower rates of growth or even decline in its core business, whether it is fixed-line telephone services for the telco or television services for cable TV operators. Also, there's a great deal of competition going on among many alternative networks, and there's ongoing growth in the demand for high-speed data and video services. After a service provider decides to deploy broadband access, it has to decide which of the available broadband media options to deploy: twisted-pair (i.e., xDSL), coax, fiber, wireless, or one of the other options listed in Table 12.1.

What drives the strategy for deciding which of the options to deploy? One factor is the status of the embedded distribution planthow old it is, how well it extends into the neighborhood, and whether it can support the high data rates specified with that broadband access option. Another factor is the services strategy of the network operator. Is it a legacy or new-era services provider? That is, is the service provider merely interested in providing its basic service package and perhaps some specialized relatively low-speed data types of services, or does the provider aim to deliver IP services, interactive broadband services (e.g., Internet access, remote access, teleshopping), and broadcast and interactive video? A third factor is the cost of installing the new distribution system, given the physical footprint realities, such as the terrain and environmental conditions. Finally, the service provider needs to consider the performance level of the distribution system in terms of the requirements to implement the services strategy. This also deals with the physical footprint realities.