ITEM: FTTH broadband is on the rise in APAC, says a new research report – but it’s not that broad in most markets, in part because people can’t afford to pay for the ultrafast stuff.
The report is from media research group Kagan (owned by S&P Global Market Intelligence), and by “broadband” the authors appear to mean “100 Mbps or greater”. On that score, Kagan says that 248 million (49.3%) of fixed-broadband households in the APAC region had broadband connections with download speed at 100 Mbps or above by the middle of 2018.
That’s a lot, but according to the report breakdown, most of them are in China (188 million), with Japan (35.8 million) and South Korea (17.4 million) rounding out the top 3.
Moreover, when it comes to actual market takeup of 100M+ broadband packages in each of the 14 markets covered as a percentage of the overall broadband subscriber base, the chart looks like this:
The top four markets are Singapore (92.6%), South Korea (90.9%), Japan (90%) and Hong Kong (82.6%) – but note that right after Hong Kong, there’s a big and notable dropoff in 100-Mbps+ uptake. While China may have the most 100-Mbps+ users in the region, those only account for a little over half of the market’s broadband users. As you can see from the chart, it gets worse from there, with Vietnam, Indonesia, the Philippines and India down in 1%-and-below territory.
Perhaps unsurprisingly, affordability is a factor, the Kagan report says (affordability in this case measured by “the minimum annual cost of a subscription to 100 Mbps residential broadband in a particular country as a percentage of that country’s per capita gross national income based on purchasing power parity, or GNI PPP”). According to the report, Hong Kong and Singapore had the most affordable 100-meg broadband in the region, while Indonesia has by far the most expensive.
While such stats are useful, I do find myself wondering just how big a deal it is that most people can’t afford 100M+ fixed broadband.
It’s a big deal for ISPs who have invested huge amounts of capex to build out FTTP networks, I suppose, but one would assume they planned their rollouts with an understanding of how many people could afford their ultrafast bundle prices. And if they didn’t, well …
But on the consumer side, we’ve understood for some time that most of the services people use for fixed broadband work just fine at far lower speeds (for example, I have a 35-Mbps fiber connection at home and it does everything I would want a broadband connection to do). Heavy users require the fastest connection speed available, but they’re also a niche market. For everyone else, why would they pay more if their sub-100M connection works just fine?
Also, many of the sub-100M markets are mobile-first markets, which means expectations of internet performance are different for customers used to a 4G experience (or even a 3G experience) – and that experience, according to OpenSignal, is generally not going to be higher than 45 Mbps (in Indonesia, it’s a little under 9 Mbps).
That’s not to say everyone’s happy with the status quo or wouldn’t appreciate faster speeds, etc. But consumers typically balance price with value – what will your 100M+ connection give me that my current connection doesn’t, can I afford what you’re charging for it, and if so, do I think that’s worth paying extra for?