Tuesday, April 7, 2015

Is Mobile Backhaul the Killer App for Fixed Networks in South Asia?

Is wireless backhaul the killer app for fiber to the home? In some cases, it might be, according to Julie Kunstler, Ovum principal analyst. “Broadband wireless is becoming a stronger and stronger driver for the use of fiber-based (including FTTH) mobile data backhaul solutions,” said Kunstler.


But that might be a rather weak justification for investing in mass market fixed networks of any type, in many countries.


In Bangladesh, fixed network access for Internet access is purchased by just 0.1 percent of households. In India and Indonesia, about six percent of households buy fixed Internet access.


In Pakistan, about five percent of homes buy fixed network Internet access. In the Philippines, about 10 percent of homes buy fixed network Internet access. In Thailand and Vietnam, about 21 percent of homes buy fixed network Internet access.


In Malaysia, fixed network Internet access is purchased by about 36 percent of households.


In smaller city states or semi-autonomous zones, such as Singapore or Hong Kong, fixed network adoption already exceeds 100 percent, however.


How much additional optical fiber deployment, and in what form, is an issue some countries are tackling. India wants to ensure an optical connection extends at least to “every village.” India’s primary initiative therefore is the National Optical Fiber Network, a national wide area network.


Indonesia is aiming for a fixed Internet access connection to 40 percent to 75 percent of homes by about 2017.


Whether such programs will succeed at planned levels is a question. Capital expenditure on fixed-line infrastructure in Indonesia, for example, has been declining, said Kunstler.


The issue is how much capital to invest in fixed facilities (beyond optical backbones), when mobile broadband is so much cheaper. And that is to ignore completely any other alternatives that might be available in coming years.

The problem is that fixed networks are the most expensive forms of infrastructure for Internet access.

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