| 5.5 Million Quarter in China |
| Written by Dave Burstein |
| Thursday, 22 July 2010 16:08 |
 China added 5.5M new DSL & fiber connections Q2, Lee Ratliff calculates, probably just under half the worldwide total and continuing the torrid pace of Q1. There are about 119M broadband connected Chinese, just about the total of #2 U.S. (87M, Q1) and Japan (32M). With 600M-800M Chinese still unconnected, there's plenty of room for growth. Ratliff of iSuppli estimates 184M million broadband subs by 2014, which would be a slight slowing of growth. He points to the $20B of government stimulus for "fiber" as a key driver. I wouldn't be surprised if the Chinese growth rate actually increases. Everyone there is excited by the new strategy of "convergence" and "triple-play." They are allowing cable modems, and some very aggressive outfits including Shanghai intend to grow digital cable to volumes that dwarf other countries.
Low equipment prices spurring China's growth. China Telecom gets great prices by putting out bids for 10M lines at a time. They make sure to split their orders three or four ways so they have contenders for the next contract. They are paying about $100/home for either GPON or GEPON per Wei Leiping. Wei indicated that most of their fiber network is GEPON in 2010, but Alcatel just announced large GPON orders from both China Telecom and China Mobile for Shanghai Bell. They are supplying the 7342 ISAM/MSAN, equipment also going to the U.S. and Australia. Mike Quigley of Australia's NBN is under pressure to bring down costs. The former Alcatel executive needs to find out the actual price China is paying and demand Alcatel come close to that price in Australia. Can Quigley in Australia do what Joe Kennedy (JFK's dad) did when he became a public servant? As a wall street speculator, the father of the future President was one of the craftiest. When Roosevelt made him the first head of the Securities Commission, he turned around and used his knowledge to crack down on Wall Street abuses. Quigley was CEO heir-apparent at Alcatel until the Lucent buy changed the game. He's always been one of the sharpest in the industry.
To catch a thief...
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