FTTH/FTTPFTTH/FTTPUPDATEUPDATE
October, 2006October, 2006
Copyright 2006 RVAwww.RVALLC.com
Methodology
• Background research• Vendor/Expert interviews• Provider interviews• Random segment interviews • Consumer interviews
Is It Growing?
Source: RVA Render & Associates, LLC 2006
189,000
970,000
6,099,000
4,089,000
2,696,846
19,400 35,700 72,100110,000
180,300
1,619,500
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
FTTH Homes Passed (Cumulative – North America)
FTTH Homes Marketed(Cumulative – North America)
189,000413,221
5,079,999
3,218,600
1,754,300
19,400 35,700 72,100 110,000180,300
829,700
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Sep-0
1
Mar
-02
Sep-0
2
Mar
-03
Sep-0
3
Mar
-04
Sep-0
4
Mar
-05
Sep-0
5
Mar
-06
Sep-0
6
Source: RVA Render & Associates, LLC 2006
And The Big News…
FTTH Homes Connected (Cumulative – North America)
322,700
1,011,000
671,000
213,000
146,50078,000
64,70038,00022,50010,3505,500
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
Source: RVA Render & Associates, LLC 2006
Over 1 Million Connected!
Source: RVA Render & Associates, LLC 2006
FTTH Homes Connected (Cumulative – North America)
322,700
1,011,000
671,000
213,000
146,50078,000
64,70038,00022,50010,3505,500
0100,000200,000300,000400,000500,000600,000700,000800,000900,000
1,000,0001,100,0001,200,000
Sep-0
1M
ar-0
2Sep
-02
Mar
-03
Sep-0
3M
ar-0
4Sep
-04
Mar
-05
Sep-0
5M
ar-0
6Sep
-06
FCC Triennial Review
CouncilFormed
Are We There Yet?
Dial-up only28%
Broadband43%
No Internet28%
FTTH1%
Current Status of Fixed Connectivity
Source: RVA Render & Associates, LLC 2006
90
50
0
10
20
30
40
50
60
70
80
90
100
FiberCoaxCopper
??
Years to Reach 90% of Americans
Year-to-Year Growth in Homes Connected
0%
50%
100%
150%
200%
250%
300%
350%
400%
CopperCoaxFiber
Source: RVA Render & Associates, LLC 2006
20.0%
82.0%
213.0%
0% 50% 100% 150% 200% 250% 300%
U.S.
Japan
Europe
Approximate Annual Growth
in FTTH Subscribers
Source: RVA Render & Associates, LLC 2006
World’s FastestGrowing Major FTTH Market!
What About Take Rates?
Overall Take-Rate for FTTH
(Cumulative – North America by Year)
20.4%19.0%
35.4%
18.0%
26.0%
41.3%
35.9%
29.0%31.2%
34.5%
28.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Source: RVA Render & Associates, LLC 2006
52.4%51.0%
43.7%48.2%47.4%
41.3%35.9%
29.0%31.2%
34.5%
28.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Overall Take-Rate for FTTH Non-RBOC(Cumulative – North America by Year)
Source: RVA Render & Associates, LLC 2006
Do Customers Value FTTH?
30%
63%
89%
0% 20% 40% 60% 80% 100%
FTTH
Cable Modem/DSL
Dial-up
Percent Satisfied With Type Of Service(Somewhat or Very Satisfied)
$2,485
$4,318
$5,500
0 1000 2000 3000 4000 5000 6000 7000
Average estimate fromdevelopers
Average estimate fromthose who have FTTH
now
Average estimate fromconsumers who don't have
FTTH
Estimates of the FTTH New Home “Price Premium”
Source: RVA Render & Associates, LLC 2006
Does It Really Matter?
Source: RVA Render & Associates, LLC 2006
Ports/WaterwaysPony ExpressStage CoachTelegraphRailroad
1900s Telephone1910s1920s Roads/vehicles1930s1940s1950s Airlines1960s Interstates1970s1980s1990s Internet2000s2010s FTTH?
Growth of GDP and Societal Empowerment Relates to SpurtsIn Private Technology Investment(1920s, 1950s, 1960s, 1980s…)
AND…
Paradigm Changes in Two-WayHuman Connections
Advanced Broadband Has Significant Implications
Does FTTH Spur Other Purchases?
CONSUMER ELECTRONIC SALES DRIVEN BY FTTH:
PERCENTAGE AVG
PRICE TOTAL
HD televisions 15% x $1,400.00 = $210.00
Wireless networking equip. 10% x $200.00 = $20.00
Computers 6% x $1,000.00 = $60.00
Inside home wiring 4% x $2,000.00 = $80.00
Video conferencing cameras 1% x $50.00 = $.50
Total Average Per User $370.50
FTTH Drives Other Purchases
Source: RVA Render & Associates, LLC 2006
FTTH Generates Billions in Economic Activity
(Estimated One-Year Activity, Spring 2005-Spring 2006)
•$1.2 Billion for Infrastructure Installation•$169 Million in Electronics Sales
(Estimated Total Activity, by 2010)
• $21 Billion for Infrastructure•$4.5 Billion in Electronic Sales
Does FTTH Create Economic Development?
Traditional Business Attracted Because of FTTH
PLACE POPULATION TYPE COMPANY
Bristol, VA 17,271 (MUNI) Northrop Grumman
Fort Wayne, IN 203,369 (RBOC) Raytheon
Macon, MO 5,283 (ILEC) Onshore
Mason County, WA 53,000 (PUD) Louisville Slugger, Sims
Quincy, WA (Grant County) 5,326 (PUD) MSN (Microsoft)
Salem, IL 7,569 (CLEC)Midwest Ag Energy Ethanol Plant
Wenatchee, WA (Chelan City) 28,515 (PUD) Yahoo
FTTH Micro Business Development
(In home / Small business)• Video Editing• Market Consulting• Game Development and Serving• Engineering / Drafting• Scientific Sample Analysis• Software Development• Independent Content Creation
Source: RVA Render & Associates, LLC 2006
Does FTTH Change Paradigms?
1.3
0.3
0 1 2 3 4 5
Non FTTH
With FTTH
Number of Days Worked From Home Per
Month
Source: RVA Render & Associates, LLC 2006
The Future Will Be Exciting!
Our Report…
Why The Report?
• Third party validation
• Deeper understanding… better strategy– Equipment Vendors– FTTH Service Providers– Content and Applications Providers
• More accurate forecasting
And critical market information helps you gain more FTTH customers.
The 2006 RVA report is now available!
www.RVAllc.com
FTTH/FTTPFTTH/FTTPUPDATEUPDATE
October, 2006October, 2006
Copyright 2006 RVAwww.RVALLC.com