Is competition in the communications market hindering the introduction of new technologies?

    For the first time in history, the number of new Fiber Optic Internet Connections (FTTH) has exceeded the number of new cable modem connections, according to the British research company Point Topic. This is a battle for second place with the absolute leadership of DSL technology.

    In Q1 2008, 4.2 million subscribers connected to the network worldwide via fiber-optic lines, and only 2.5 million by cable. A significant part of the new optics connections is in China (2.5 million), where the total number of lines FTTH reached 16.7 million. America is only in fourth place (303 thousand new, 2.6 million in total) after Japan and Korea.

    FTTH provides higher speeds than cable, but building such networks is much more expensive.

    Experts explain that better quality communication channels, oddly enough, are worse to bring to market in highly deregulated markets such as American and European. Telecoms are wary of fear of investing huge amounts of money in laying the “last mile” on FTTH, because they will have to compete fiercely with cheaper technologies: cable modems and DSL. There is no way to do without state assistance. At the same time, in more regulated markets with weak competition, the introduction of new technologies is faster.

    Today, 79.6 million cable modems work in the world (more than half in the USA) and only 42.1 million users are connected via FTTH channels. Both technologies are still far from DSL: 238.1 million households (+9.3 million in the first quarter of 2008) get broadband access over telephone lines.

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