2017 FTTH Panorama LATAM - Roland Montagne - IDATE DigiWorld

FTTH Panorama LATAM Market at September 2016

Roland MONTAGNE - Director, Principal Analyst - IDATE +33 680 850 480 - [email protected]

FTTH Panorama LATAM - Agenda 1. Study background

• Objectives • Available results

2. FTTH/B in Latin America • Overview • Overall figures

3. LATAM FTTH/B main trends • FTTH/B subscribers • FTTH/B Homes Passed distribution • FTTH/B Homes Passed in total HH • Top 10 countries in terms of % of FTTH/B Homes Passed in total Households

4. Challenges / drivers for FTTH/B in LATAM

5. Forecasts up to 2021

1. Study background

Study Background • Mission on behalf of the FTTH Council, LATAM • Objective: to provide a complete summary of the status of FTTH/B in LATAM

- 17 countries analyzed (1)

- Distinction between architecture: FTTH/B vs FTTN (FTTN/C+VDSL, FTTLA, FTTx+LAN) - FTTH/B Definition by FTTH Councils Worldwide (2)

• Characterization of each project includes:

- Organization initiating the project - Key parameters & Figures - Technical & Architecture parameters - Financing & Business model

• Methodology use - Desk research - Direct contacts with FTTH players (questionnaires, phone interviews) & IDATE’s partners in LATAM - Information exchange with FTTH Council, LATAM chapter members

(1) Argentina, Bahamas, Barbados, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Jamaica, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay

(2) FTTH/B definition available here

http://ftthcouncil.eu/documents/Publications/FCGA%20-%20Definition%20of%20Terms%20-%20Revisions2016.pdf

2. FTTH/B in Latin America

A year where alternative ISP and Municipalities are leading the FTTH/B evolution • A positive evolution: 82 FTTx projects in the region

• Players different from incumbents have deployed fibre in a dynamic way from 2015 to September 2016 covering with fibre more homes:

• Municipalities / Power Utilities have grown 33% • Alternative operators growth: 19% • Incumbents: Growth rate about 5%

Incumbents:

4 161 000 FTTH/B

Homes Passed

Municipalities / Utilities:

190 800 FTTH/B

Homes Passed

Alternative Operators:

18 987 187

FTTH/B Homes Passed

Source: IDATE for FTTH Council LATAM Chapter

FTTH/B is taking a bigger place in the LATAM Market due to a positive evolution in the deployment and user’s adoption…


4 552 698 FTTH/B

subscribers by Sept. 2016

in LATAM

23 352 987 FTTH/B Homes

Passed by Sept. 2016 in

LATAM

25% growth from 2015

18% growth from 2015

19.5% FTTH/B Take

up rate by Sept. 2016 in

LATAM

+1.4 points from December 2015

Take up rate = FTTH-B subs / Total FTTH-B Homes Passed

3. LATAM FTTH/B main trends

It has been a period with Mexico and Brazil as the leading countries but also there has been an interesting evolution in the Caribbean region….

• Mexico is still leading the LATAM FTTH/B market with 1.585 million subscribers

- +23% of subscribers Dec-15 to Sep-16 - Telmex is leading the retail market - However, TotalPlay has entered to the big race increasing the FTTH/B homes passed by 35% in Sep 2016 and the FTTH/B subs in Sept 2016 by 64% from Dec 2015

• Brazil is reaching Mexico in the LATAM FTTH/B market with 1.572 million subscribers

- +26% of subscribers Dec-15 to Sep-16 - Telefónica continues its development plan investing in fibre deployment between 2015 and 2017 and extending agreement with the regulator in order to provide FTTH services in new cities. - Hundreds of local ISPs involved, but in limited geographical rollouts

• Antel in Uruguay is one of the two most involved incumbents in the region (570,000 FTTH/B subs)

- Even if the trend of FTTH/B subscribers growth is decreasing at + 4% Dec-15 to Sep-16, 48% of FTTH/B HP have opted for a service based on FTTH connection - National coverage: the coverage is considered as exhaustive in Uruguay - Among the leading countries in the global ranking with a penetration rate (1) over 60% by September 2016

• Strong growth rates in smaller markets, confirming a general trend towards FTTH/B in the region, specially in the Caribbean

- Barbados +322%, Jamaica +1000%, Trinidad y Tobago 463%! And Peru : 262% - Colombia +41%, Bolivia +40%

(1) Penetration rate = number of FTTH/B subscribers over total number of Households Source: IDATE for FTTH Council LATAM Chapter

0%200%400%600%800%

1000%1200%1400%1600%1800%2000%

… it can be also appreciated a good evolution in lower scale markets such as Jamaica, Trinidad, Barbados and Peru…


Total FTTH/B Subscribers by country % variation from Dec-2015 to Sept-16 in the number

of FTTH/B Subscribers by country

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While Mexico and Brazil are the leaders in homes passed, significant deployment are also performed in other smaller LATAM Markets…


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Trinidad: Flow, Digicel & Massy deployments

Peru: Player « Voy » has reached more homes during the period

Jamaica: Flow & Digicel deployments

Total FTTH/B Homes Passed by country % variation from Dec-2015 to Sept-16 in the number of FTTH/B Homes Passed by country

Top 10 countries in terms of % of FTTH/B Homes Passed in total Households


Uruguay: 100%

Barbados: 95%

Jamaica: 45%

Mexico: 33%

Trinidad & Tobago: 27%

Brazil: 13%

Bahamas: 12%

Ecuador: 12%

Colombia: 11%

Chile: 11%

• Number of Homes Passed not representative of effective coverage

• Here, the ratio represented is % of FTTH/B Homes Passed in total households

- 2 countries > 90% !!! - 3 countries > 20% - 5 countries over 10%

• Argentina: 8.5%

Regarding FTTH/B technologies…


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Main Fibre architecture deployed (*) in %

Sept-2016

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FTTH

*Home Passed segmentation Source: IDATE for FTTH Council LATAM Chapter

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Main Fibre technology deployed (*) in %

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Ethernet

GPON

Aerial vs Underground • Fibre deployment in LATAM is

perfomed in a big portion by aerial means.

• Electricity and telephone poles are commonly used.

• In countries like Barbados, the ratio is 95% aerial vs. 5% underground.

• In Brazil it is estimated 80% aerial vs 20% underground

• In Mexico the ratio is estimated in 60% aerial vs 40% underground

4. Challenges / drivers for FTTH/B in LATAM

A FTTH/B penetration rate that is continuously increasing


Uruguay: 48%

Barbados: 19%

Jamaica: 9%

Mexico: 5%

Trinidad & Tobago: 10.4%

Brazil: 2.3%

Ecuador: 2.6%

Colombia: 1.8%

Chile: 4.3%

• LATAM has continued the trend to deploy FTTH/B

- 10 countries among 17 studied are in the Global Ranking:

• Uruguay in the Top 7 in the world!

• 2 countries with a penetration rate > 10%

• 7 other countries with a penetration rate from 1% to 10%

Puerto Rico: 3.4%

Penetration rate = FTTH/B subscribers over total number of households

Key points


• LATAM users want more reliable Internet services with higher bandwidth: Players are now convinced that FTTH access is the end game. Low quality of existing copper as a driver: Telcos are betting on FTTH/B to promise innovative services and higher speed rates

• The competition between cablecos and telcos is a driver for FTTH/B. Some cablecos also investing in Fiber access

• Players with presence in several countries in the region have realized about the importance to migrate cooper infrastructure towards fibre.

• In most of cases, FTTH/B and LTE are together deployed in LATAM

• Several Governments in LATAM have promoted the creation of National Fibre Networks Brazil, Chile, Argentina, Costa Rica

5. Forecasts up to 2021

A positive evolution in LATAM towards FTTH/B


• It is estimated 8.3 Million FTTH/B subscribers and more than 47.1 Million Homes Passed by 2021

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FTTH/B LATAM Forecast per country


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Argentina FTTH/B Forecast

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Barbados FTTH/B Forecast


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Brazil FTTH/B Forecast


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Costa Rica FTTH/B Forecast


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Ecuador FTTH/B Forecast


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Jamaica FTTH/B Forecast




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Mexico FTTH/B Forecast


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Peru FTTH/B Forecast


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Trinidad & Tobago FTTH/B Forecast


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Uruguay FTTH/B Forecast


Muchas Gracias!

Contact Roland MONTAGNE

Director, Principal Analyst +33 680 850 480 [email protected]

Fiber for the ZZZ Generation !!

2017 FTTH Panorama LATAM - Roland Montagne - IDATE DigiWorld

Technology

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