The technology main driving force is always competition. FTTH is no exception. China is having the FTTH as a future planned technology accepted by the main service carriers. Service providers are actively deploying the technology in order to occupy technology ahead of time. Competition is happening because of the several factors: Competitive Local Exchange Carrier (CLEC) want to compete with the Incumbent Local Exchange Carrier (ILEC), local carriers want to bypass the residential service providers and telecos and CATV providers are competing for data access.

While big companies like China Netcom own most of the local network resources, they need to compete with local providers that support ADSL. It is true for other carriers that has almost no local network resource.
Currently the residential service providers own and operate residential network which can be connected to any local carrier’s network. Local service provider prefers to bypass the residential network and reach every customer directly. Solution for that would be FTTH.

While CATV providers are not allowed to provide telephone services and telecos providers are not allowed to provide the CATV services, both providers can provide Internet services. These restrictions might be removed in the near future, which will mean that one who owns the access network owns the subscriber.

Bandwidth demand

Larger bandwidth is required by many new applications introduced in last years. In China telecommunication market, broadband services grew very rapidly. Old applications like emails, web-surfing and file download has been expanded while adding new applications like online gaming, IPVOD, videophone.
Broadcasting TV is affecting market very much as well. With the launch of China digitalization plan, by the year 2015 there would be no analog TV programs. Currently the CATV service providers are delivering services through the separate network. Nation is promoting triple play services which is convergence of CATV, telecom and Internet networks. Estimated required bandwidth is about 60 Mbps, with HDTV this number would be highly increased. None of the currently implemented solutions can meet these requirements, so FTTH is needed.

Reduced system cost

Development of FTTH and FTTO networks made significant changes in prices of the equipment over past few years. The optical fiber is getting very cheap per kilometer, while the prices of optical transceivers, Ethernet cards and passive optical components are dropping every month. Low prices are making these architectures highly acceptable from economic side.