FTTx in China – Current Status and Future Prospects

1. FTTx in China – Current Status and FutureProspects Chengbin Shen, R&D Director, Shanghai Research Insitute of China Telecom shencb@sttri.com.cn Joint ITU/IEEE Workshop on Ethernet - Emerging Applications and Technologies(Geneva, Switzerland, 22 September2012) Geneva, Switzerland, 22 September 2012

2. Increasing number of BB subs in China and Technology Evolution • The migration from ADSL2+ to FTTx or even to FTTH is steadily accelerating • In early years, subs not served with ADSL were provided with Ethernet based FTTB; Currently, subs not served with ADSL are provided with PON-based FFTx • China BB sub installed base is estimated to reach 180 million active ports by 2014

3. CTC BB sub Growth • 83.7M in the middle of 2012 • The trend is clearly towards increase in BB sub count

4. Relatively low BB penetration in China • China's Broadband Household penetration (~30%; end of 2011) is lower than that of developed coutries, and is on pair with the world’s average value, but only slightly higher than average for developing countries; • Great development potential and market opportunity!

5. Broadband Technology MigrationMilestones in China All these technologies will co-exist in CTC access network • Before 2007, ADSL/ADSL2+ was the dominant technology • In 2007, CTC and other main operators started massively deployment of fiber access based on "Fiber-IN & Copper-OUT" strategy after China Telecom achieved the all-around and large-scale IOP of EPON • GPON and 10G-EPON began deployment after 1G-EPON became mass deployed 10G-EPON 100M GPON EPON 50M ADSL2+ 10M ADSL 2000 2005 2007 2009 2010

6. EPON in CTC network deployments scenarios • Business buildings and urban areas • Residential customer and urban areas • Rural areas • Based on comprehensive analysis on TCO，bandwidth capbility, technol. Trend, etc., China Telecom adopt different deployment mode to local conditions: • Green field (new area) • Stop deploying feeder & distribution copper wires • FTTB (PON) + Ethernet before 2010; FTTH since 2010 • Brown field (existing area) • (preferred) FTTB (PON)＋DSL with copper wire length < 500m before 2010 • Bandwidth target: 8-20Mb/s • some residential cell were upgraded with FTTH since 2010 • Provide to all new businesses • buildings equipped with fiber • FTTO or FTTB scenarios • Principally stop deploying feeder copper wires • fiber to the village plus DSL • EPON (preferred) • P2P • Bandwidth target: >4Mb/s

7. Fiber-in & Copper-out in CTC networksfrom FTTB/N to FTTH From 2008 to 2010, through EPON deployment in FTTB/Narchitecture: 1. Customers’ access bandwidth improved significantly 2. EPON equipments and ODN technologies were improved, and China Telecom completed OLT distribution in key network points • in 2010, EPON is mature enough and ready for FTTH mass deploymen due to: • attractive equipment price • simplified network engineering • fewer technical challenges • simplified IT services • improved service process • and CTC moved to FTTH era

8. "Fiber-in & Copper-out" Changes in CTC BB network capacity Q1, 2011 2007

9. China's EPON Ecosystem • CTC has played the key role in developing EPON ecosystem in China Optics ASIC

10. CTC announces“Broadband China, Optical City” project • On 16 Feb, 2011, China Telecom announced the grand project to accelerate FTTH deployment in China • In three years, CTC will complete fiberization of all cities’ BB networks to achieve the target of 100M to home, 1G to building • by the end of 12th 5-Years (2015), CTC plans to pass 100+ million homes with FTTH • Progress and plan • FTTH home pass (new): 2010: 10M; 2011: 30M; 2012: ~25M, • FTTH subscribers (new): 2010: 1M; 2011: 5M; 2012: >10M • FTTB/N home pass (new): 2009: 7M; 2010: 10M; 2011: 10M;2012:>7M

11. China's nation broadband strategy • The central government of China is drafting a nation-wide broadband strategy entitled“Broadband China Strategy”. This strategyintends to accelerate China's BB network upgrade and service development • Content of “Broadband China Strategy”: • By the end of 2015, the total number of BB subs to reach 250M+ • Access bandwidth to reach average of 20Mbps for urban residential users, and at least 4M will be provided for suburban users • By the end of 2020, China will provide advanced BB information infrastructure for all citizens at the international quality level. • In 2012, new FTTH-passed homes will reach 35M+, and more than 50% broadbnad subscribers will enjoy the access bandwidth of no less than 4Mbps

12. Development & Application of 10G-EPON XG-PON1 10G-EPON XG-PON2 GPON EPON • China Telecom deeply involved in 10G-EPON standardization and product IOP . In April 2011, CTC achieved 10G-EPON interoperability at system level • 10G capable PON will be deployed first to improve MDU’s uplink bandwidth to achieve FTTH-like capacity for each subscriber • More than 500 ports 10G-EPON-fed MDU are already in operation in China Telecom networks. More are on the way. 2010.11release XG-PON1 standard Commercial chipset and optical TX: Q2,2012 Commercial deployment: end fo 2012 10G GPON Symmetric, no plan Asymmetric Asymmetric & Symmetric 40G PON IEEE Std 802.3av released in Sep, 2009. Commercial 10G-EPON deployment in Q1, 2010 2012 2010 2011 2009

13. 10G-PON based FTTN/C+VDSL2 • 10G-PON based FTTN/C+VDSL2 plays more important role in China than ever before • Thanks to its high data rate, it is ideal for supporting data feed for MDU ONU. Current 10G-EPON deployment scenarios are primarily focused on FTTN • VDSL2 and its follow-up technologies is the best cost-effective for brown field upgrade, especially when used with 10G-EPON for backhaul. • 10G-PON based FTTN/B+ VDSL2 provides FTTH-like access bandwidth with low cost and simple engineering • Current EPON/GPON based FTTN+ADSL2+ will be migrated to 10G-PON based FTTN+VDSL2 in the near future.

14. THANK YOU!