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Global FTTx market will continue to be ruled by China: Ovum

Large subscriber numbers and robust vendors such as Huawei and ZTE contribute to China’s dominance

Research firm, Ovum, expects China to continue to dominate the global optical fibre broadband market throughout 2011 and beyond.

Ovum’s new report, titled FTTx Market Review: China’s Dominance, bases this observation on the large predicted growth in subscribers in the country. It is expected to reach 100 million in 2016 - more than 50 per cent of the world’s subscribers.

“A key driver of the enormous forecasted growth is the bandwidth and subscriber targets set by the Chinese government and service providers,” Ovum principal analyst and co-author of the report, Julie Kunstler, said.

“In addition, the government is providing support for deployments in the form of credit and partnerships.”

The strength of local vendors was also highlighted in the report as another key factor contributing to the growth of FTTx.

In particular, Ovum expects that competitors might find it difficult to unseat Chinese FTTx vendors Huawei and ZTE, which have established solid footholds in the local Chinese and overseas markets.

“They have strong expertise in FTTx, given their large home market, and they will continue to be a formidable force around the globe,” Kunstler said.

“There will continue to be room for other players, but it will be difficult to unseat the top two.”

The report highlights that Huawei and ZTE are also strong exporters outside of China, with 50 per cent of FTTx equipment revenues in Europe, the Middle East, and Africa in the fourth quarter of 2010 traced back to these two vendors.

Chinese communications vendor, Huawei, recently reported a rise of 30 per cent in profits worldwide after securing important deals such as upgrading Vodafone’s mobile network nationwide.

Huawei and ZTE are also locked in a legal battle with each other recently for patent and trademark infringements.

Nominations for the 2012 ARN IT Industry Awards open on Tuesday, June 12.

More about: etwork, Huawei, Ovum, Ovum Research, Vodafone, ZTE
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