In a new report, the independent telecoms analyst predicts that China’s FTTx subscribers will reach 100 million in 2016, which will represent more than 50% of the world’s subscribers.

Meanwhile, the report states that Chinese FTTx vendors Huawei and ZTE, which were ranked the world’s number one and two, respectively, in 2010 by market share, will continue to hold their positions for years to come. The companies are a strong force both in the local Chinese market and overseas and their competitors will find it almost impossible to unseat them, the report finds.

Ovum principal analyst and co-author of the report, Julie Kunstler says, “China is the biggest consumer of FTTx equipment right now and that is set to continue. A key driver of the enormous forecasted growth is the bandwidth and subscriber targets set by the Chinese government and service providers. In addition, the government is providing support for deployments in the form of credit and partnerships. Meanwhile, the significant greenfield construction projects that are under way in the country make the installation of FTTx networks easier.”

In terms of the Chinese vendor picture, the report finds that Huawei will continue to be ranked the world’s number one throughout 2011 and beyond and competitors will struggle to steal market share from it. It states that Huawei is the leading FTTx PON vendor today in China and Europe, the Middle East, and Africa (EMEA) and the company will benefit from future growth in China and Eastern Europe.

Julie says, “Chinese FTTx vendors Huawei, ZTE, and FiberHome make up three of the top five global vendors and are ranked first, second, and fourth, respectively. The rise of the Chinese suppliers is mainly due to lower growth rates in Japan and Korea, where high FTTx household penetration rates have been reached. In addition, Japanese and Korean vendors are not major exporters of FTTx equipment.

“Huawei and ZTE are strong exporters outside of China. In the fourth quarter of 2010, 50% of FTTx equipment revenues in EMEA corresponded to shipments by these two vendors. They have strong expertise in FTTx, given their large home market, and they will continue to be a formidable force around the globe.

“There will continue to be room for other players, but it will be difficult to unseat the top two.”