Sunday, January 19, 2020

For South Korean FTTH, Definitions Matter

Sometimes definitions matter; sometimes they are less relevant. In the U.S. market, it does not much matter whether access media is fiber to the premises or hybrid fiber coax or wireless. The issue is how much bandwidth consumers can buy, and at what cost, irrespective of access media.

In the South Korean internet access market, one is confronted by apparently contradictory statistics: fiber to premises supply is quite high, but take rates for fiber to home services is relatively low. 

On one hand, fiber to the premises is said to reach 80 percent to 98 percent of locations. On the other hand, take rates are said to be as low as 10 percent, 38 percent or as high as 98 percent

The other issue is speed. Just because a connection uses optical fiber media does not mean the supplied services run at especially high speeds. Some telcos that installed FTTH systems back in the late 1990s were supplying service at 10 Mbps. In South Korea, in 2017, average FTTH speeds were as low as 29 Mbps. 

In 2019, according to Ookla, South Korea average internet access speeds were about 144 Mbps downstream. 


So something odd has to be explained: FTTH supply is quite high, and yet average speeds are perhaps lower than one might expect. That explanation probably has to rely on the high percentage of multiple dwelling units in South Korea. 

Apartments represent perhaps 52 percent to 60 percent of dwellings in South Korea, and arguably is as high as 70 percent in Seoul. And that is likely a key to understanding the data. By definition, an optical fiber connection to a high-rise building goes into the basement, with actual end user access over a copper connection. 

In a strict sense, one might argue that the actual end user connection therefore uses copper cables, not optical fiber.

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