NTT to miss FTTH customer targets

12 Jun 2009

The pace of FTTH rollouts in Japan has been slowing - so much so that by the end of the current financial year next March market leader NTT looks set to fall well short of the 20-million subs forecast made in November 2007.

NTT had signed up 11.13 million FTTH subscribers by the end of Q1 and reported an increase of 167,000 over the previous month.

The latest government figures show that, in Q3 2008, broadband carriers added 660,913 FTTH subs to take the total to 14.42 million. That compares with 929,681 net adds in the first quarter.

\'The growth in FTTH is beginning to slow as lots of the people who have been looking to migrate have already done so. NTT and others are having to look for new users which is not easy and are trying to tie up with electronics stores and the like,\' explained George Hoffman, group manager of communications at IDC Japan.

NTT\'s early investment in FTTH together with its nationwide infrastructure has enabled the company to be the world leader and to completely dominate the domestic market.

Softbank has been reduced to acting as an NTT reseller for its FTTH services, but KDDI has been slowly putting together a more aggressive challenge by acquiring both networks and the latest technology.

KDDI merged with PoweredCom, a subsidiary of power utility TEPCO in 2006, then acquired TEPCO\'s own fiber business in 2007 and took over Chubu Electric\'s Nagoya telecom subsidiary CTC in 2008. Its FTTH sub addition number fell to 12,000 in Q1 of 2008, but things are on the up and subs grew 74,000 (over 7%) in Q1 2009.

This sudden change can partly attributed to its new value plan which offers subscribers 1 Gbps. In Sapporo, demand was so great that at one point KDDI was unable to handle all the customer requests. In December KDDI began the world\'s first 2G-EPON deployment.

By these means, KDDI is hoping that it can cut its FTTH losses and return its fixed-line business to profitability, while NTT still expects its FTTH business to finally become profitable in FY2011.

Japan\'s slowing FTTH growth means China is now on the verge of overtaking it to become the FTTH world leader in terms of sub numbers.

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