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Broadband expected to soar in China
March 3, 2002

Shanghai - Metro Ethernet broadband access services in Asia-Pacific are expected to rocket this year with China leading the pack in large scale deployments according to CNET.

Users see metro Ethernet as an alternative to ADSL (Asymmetric Digital Subscriber Line) or cable modem, according to an Asia-Pacific study by IDC Asia-Pacific, a market research firm.

Based on fiber networks, metro Ethernet offers LAN type connectivity to urban areas. It scales from 2Mbps up to 1Gbps in bandwidth and is more affordable than traditional broadband services such as ADSL, CNET wrote.

The IDC study revealed Ethernet subscribers in the Asia Pacific region, apart from Japan, are expected to grow from last years 280,000 to 9.3 million in 2006. A compound annual growth rate of 110 percent, the report said.

In 2001 metro Ethernet subscribers across the region contributed $395 million to the metro Ethernet market and this is expected to reach $19 billion in 2006.

Although China will dominate the subscriber market, Korea is where the revenues will be strongest, Renee Gamble, IDC Communications Research market analyst.
In China Ethernet services to residential areas will start from US$13 a month for 2Mbps as opposed for US$18 for ADSL, while companies will pay US$140 per month, US$15 cheaper than the ADSL equivalent, Gamble said.

Critical mass will be found in the residential market where competitive pricing against ADSL services will position the market for tremendous growth," Gamble said.

Last years new push to attract customers to DSL broadband has not given the results the sector had hoped for. The near outlook is dim as China Telecom, China Netcom and Great Wall have tried vigorously to sell the idea of broadband to the market, People's Daily wrote. But, after one year, Shanghai is leading with only 2 percent of the cities households having a broadband connection. The competition is fierce in Shanghai where three operators offer broadband.

Alcatel, leading foreign DSL provider in China is optimistic about the possibilities. "The demand for Internet access service in China has been ever growing," said Etienne Charlier, Vice President of Marketing and Sales Support, Broadband Networking Division, Alcatel Asia Pacific. He estimates that by 2005, the number of connected computers to the Internet will reach 40 million and that of Internet users will total 200 million, he said.

According to Charlier there is a lack of content for broadband users. About 63 percent of information sought by users on the Internet is news, 31 percent is science, technology and education.

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