Liberalisation of the local telecoms market has created a bonanza for fibre optic network equipment vendors in Japan, according to new research.

The market for hardware that provides high-speed fibre internet connections to home and business users is now worth $645m a year, estimates Tokyo-based consulting firm Yano Research Institute. 

The number of home fibre internet subscribers, estimated at close to six million today, will increase by an average of more than three million a year to reach more than 27 million by 2011, Yano's research predicts.

Equipment sales are expected to continue to increase in tandem with subscriber growth for several more years at least.

Consultants Dittberner Associates announced earlier this year that Japan added 2.5 million fibre-to-the-home (FTTH) subscribers in 2005, making up 80 per cent of the entire global FTTH market. 

The ability to keep an existing conventional phone number has been key in encouraging home users to switch from traditional wired phone and internet services to an integrated solution based on a fibre optic link.

"The biggest factor that has contributed to the increase of FTTH subscribers is the lowered fees for optical IP phone service with [conventional telephone number] portability and lowered monthly fees for broadband internet access services," Yano reported.

Some 60 to 70 per cent of new customers at major fixed-line telecoms carriers are simultaneously signing up for an optical fibre-based internet phone service, attracted in part by lower basic monthly fees than for a combined ADSL and conventional analogue phone package.

The fibre optic links also offer far higher data speeds than conventional ADSL or ADSL2+ links. Fibre optic easily provides 100Mbps or more and, unlike ADSL, does not show a pronounced fall in bandwidth over intra-city ranges.

Yano's data concurs broadly with that from research firm Multi Media Research Institute which earlier this year predicted Japan's fibre subscribers to exceed 19 million by 2008.