1. Geneva, Switzerland, 22 September 2012 FTTx in China – Current Status and Future Prospects 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)

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! Year China's BB household penetration 201023.7 201129.5

5. Broadband Technology Migration Milestones in China 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 20002005200720092010 10M 50M 100M ADSL ADSL2+ 10G-EPON GPON All these technologies will co- exist in CTC access network EPON

6. EPON in CTC network deployments scenarios Based on comprehensive analysis on TCO ， bandwidth capbility, technol. Trend, etc., China Telecom adopt different deployment mode to local conditions:  Provide to all new businesses buildings equipped with fiber FTTO or FTTB scenarios Residential customer and urban areas Business buildings and urban areas Rural areas  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  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 networks from FTTB/N to FTTH From 2008 to 2010, through EPON deployment in FTTB/N architecture: 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 2007 Q1, 2011

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

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 strategy intends 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  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. EPON 40G PON 2009 GPON 10G-EPONXG-PON1XG-PON2 20102011 2012 Asymmetric & Symmetric 10G GPON Asymmetric Symmetric, no plan IEEE Std 802.3av released in Sep, 2009. Commercial 10G-EPON deployment in Q1, 2010 2010.11release XG-PON1 standard Commercial chipset and optical TX: Q2,2012 Commercial deployment: end fo 2012

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!