China will have the largest number of fibre-based broadband connections in Asia next year, with 25.9mn lines in service at year-end, overtaking Japan with 25.2mn, according to a new report from Pyramid Research.

However, the recent strengthening of the Japanese yen against the US dollar means that Japan will still generate the most revenues from fibre-based broadband services in Asia next year.  China will eventually overtake Japan in revenue terms in 2013, when it is predicted to generate US$ 168.1bn in service revenues, compared to Japan's US$ 166.8bn.

One of the main drivers behind the rapid rise of fibre broadband in China is a strong commitment from the government to deploy the technology, according to the research firm. 

"Migration to higher speed, and thus higher-priced, fibre-optic connections, will ensure continued growth in China's fixed service revenue," said Daniel Yu, senior analyst at Pyramid Research.  "The industry as a whole expects to spend US$ 22bn over the next three years deploying a fibre network, increasing total ports from 20mn to 80mn."

China's fibre networks mainly follow the Fibre-to-the-Building (FTTB)/Fibre-to-the-Node (FTTN) configuration in metro areas and newly developed multi-dwelling units, rather than the more costly Fibre-to-the-Home (FTTH) configuration, the report adds.  Fibre-to-the-x (FTTx) services are still considered to be expensive, however.

"As demand for high-speed access increases, economies of scale for both the equipment and the CPE costs will increase the affordability of the service," added Mr. Yu.  "FTTx will see its share of total broadband accounts rise from 14.8 percent at year-end 2010 to 30.9 percent at year-end 2015; we also expect broadband net additions to top 19mn in 2010 and climb to 24mn by 2015 as fibre technology gains acceptance in the market."