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China Rapidly Abandoning DSL for Fiber Broadband Alternatives

Phillip Dampier May 25, 2011 Broadband Speed, Rural Broadband No Comments

The People’s Republic of China is accelerating its deployment of fiber optic broadband at the expense of DSL, according to a new report from market research firm Infonetics Research.

“The major story in the broadband aggregation equipment market this quarter is the dramatic drop in DSL ports in China, which points to operators there continuing their dramatic shift away from DSL,” said Jeff Heynen, directing analyst for broadband access at Infonetics Research.  “The first quarter is typically one of the slowest for DSL, but the seasonal effect was worsened by Chinese operators’ continued shift away from traditional [DSL].”

The Chinese broadband market is increasingly based on fiber networks, especially in larger cities where broadband demand is rapidly increasing. Worldwide spending on advanced broadband networks is being driven by broadband expansions in China, Japan, and Korea — all accelerating their fiber deployments. For Chinese companies like Huawei and ZTE, the news is both good and bad.  Both companies profited from sales of EPON and GPON equipment which help power fiber networks, but lost plenty from the decline in spending on DSL technology.

The North American market has stalled, and is expected to remain in neutral until Verizon decides to re-initiate its FiOS buildout.  Broadband stimulus funding may also help boost spending, but most providers are relying on slow speed DSL to introduce rural America to broadband service.  In markets where providers are delivering fiber to the home, companies like Calix are reaping the rewards, with revenue up 222 percent this quarter, mostly earned from sales of Ethernet Fiber to the Home equipment.

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