Connectivity Broadband market developments in the EU Digital Agenda Scoreboard 2015.
Evolving broadband market & policy developments in Japan
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Transcript of Evolving broadband market & policy developments in Japan
Evolving broadband market Evolving broadband market
& & policy developmentspolicy developments
in Japanin Japan
April 27, 2006Taka Ebihara Japan Chair
Center for Strategic & International Studies
EDUCAUSE Policy Conference 2006
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Agenda
Broadband Market in Japan Market statistics
Services
Broadband Policies Policies that have accelerated BB deployment
Analysis of policy implications
Broadband Market in JapanBroadband Market in Japan
Market statisticsServices
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Snapshot:Japanese Broadband Market
1,000 miles
Tokyo
Osaka
Japan (US) Population: 127 mil, (290 mil) Households: 50 mil, (110 mil) Geography: 380,000 km2
BB Subs: 22 mil*, (43 mil**)
BB Penetration: 17.6%***(16.8%***) 11th (12th)
* As of Dec 2005 (MIC)** As of Jun 2005 (FCC)*** As of Dec 2005 (OECD)
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Growing Broadband Market in Japan
Source: Ministry of Internal affairs and Communications (MIC)
1999 2000
5
10
20
2001 2002 2003 2004 2005DEC
FTTHFTTHFTTHFTTH
ADSLADSLADSLADSL
CABLECABLECABLECABLE
In Million
3.2mil (14%)
4.6mil (21%)
14.5mil (65%)Total: 22.3mil
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Broadband Monthly Net Increase
2004NOV
2005NOV
20
40
60
80
In Thousand
FTTH
ADSL
In case of NTT EAST (the largest incumbent operator)
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Source: Information NTT EAST (As of Mar 2005)
Broadband Home Passed
98%=25M households
Home Passed
73%=18M households
In case of NTT EAST
(FTTH)
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Broadband Competition
ADSL price & speed competitions (2000~mid 2005) Average monthly price down 47% in 5 years $56.30/mth (1.5Mbps) $29.8/mth (50Mbps)
Increasing value-added services (mid 2005~)
$35
$31Price for 1MbpsSpeed
$30
$23
$3.30
$2.50 $0.60
50Mbps45Mbp
s
40Mbps
26Mbps
12Mbps
8Mbps1.5Mbps
2000 20052004200320022001
Source: InfoCom Research
Price per 1Mbps in ADSLPrice per 1Mbps in ADSL
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Everything over FTTH
CellularCellular
RF TV
Broadcasters
Home Networking
IP TV Internet VoIP
InternetPSTNPSTN
ISPISP
Triple Play & Fixed Mobile ConvergenceBroadcasting & Telecom ConvergenceTriple Play & Fixed Mobile ConvergenceBroadcasting & Telecom Convergence
FTTH
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Advanced mobile phone applicationse-payment
Electronic wallet
Retail shop Train ticket
Vending machine ATM
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Advanced mobile phone applicationsDigital mobile TV
“One Segment Broadcasting” or “One Seg” based on ISDB-T Available nationwide by the end of 2006
Delivering richer content (visuals, related info, URLs) Benefits
Major broadcasters: more viewership, more ad revenues Mobile operators: increasing data ARPU, e-commerce
opportunities
“One Seg” enabled devices
Service availabilityas of Apr 2006
Japanese Broadband PoliciesJapanese Broadband Policies
Policies that have accelerated BB deploymentGovernment initiativesAnalysis of policy implications
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u-Japan strategy & estimated impact
Estimated economic impact in 2010 Ubiquitous networking industries: $730 billion*
Source: White Papers for Information Communication 2004
*1 USD = 120 JPY
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Mitigating Digital Divide:Gov’t financial supports for broadband
Primary beneficiaries are municipalities
For public sector Municipality intranet projects (schools, CCs, libraries) Rural FTTH projects (details in later slides)
For both public and private sectors Zero- or low-interest-rate financing*
For private sector Tax incentives*
Deferred income tax payment Reduction of fixed asset taxes for designated network equipment
*a very limited financial impact for the private sector due to a zero-interest-rate policy of Bank of Japan
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Gov’t-financed rural BB deployment:Rural FTTH Projects
Collaboration of municipalities and service providers 1/3 of construction costs is subsidized Municipality-owned fiber networks to be wholesaled Level playing field must be ensured
Source: MIC
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Analysis of Policy Implications
Unbundling mandates for dry coppers and dark fibers
Line sharing requirement
Appropriate guidelines for co-locations and ROW
Less technological complexities in BB deployment
Fierce price competitions in ADSL market forced
incumbent operators to move up to FTTH market
Role of e-Japan and u-Japan
Comparatively better understanding on long-term investme
nts
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Net Neutrality Debate in Japan
Consumers have sufficient choices “ISP-free” resale business model prevails CLECs have full-control over their networks Bandwidth limitation in access networks is NOT significant
Sustainable development and “free rider” issues Demise of flat rate model? ISPs’ self-regulation against P2P traffic Rapidly increasing ad-supported FREE IP unicast video co
ntent
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Conclusion
Fastest and cheapest broadband Reasonable CLEC market share Mixed results of facility-based competition National broadband strategies played a significant
role Need a good balance between long-term and short-t
erm development goals Maintaining incentives for innovative investment is t
he key to sustain broadband deployment