Nokia Siemens Networks has beat a very brave retreat from the GPON (gigabit passive optical network) broadband access market, saying it will invest instead in next generation fiber-to-the-home (FTTH) technology and wait for carriers to move beyond GPON, Light Reading can exclusively reveal.
Responding to questions from Light Reading, a Nokia Siemens Networks (NSN) spokesman confirmed that the vendor "plans to focus on DSL technologies," including DSL as part of fiber-to-the-building and fiber-to-the-curb deployments, "and the next generation of optical access for when the market is ready, but we are not focused on GPON for FTTH. We are not investing in our existing GPON assets – we are waiting for what we call the next generation optical access [NGOA]."
Nokia Siemens is one of a number of major fixed network equipment vendors that have been trying to establish themselves as GPON suppliers to the major Tier 1 carriers globally, but it's had little success, winning only small deals in Kuwait and Denmark, while Canada's Telus Corp. (NYSE: TU; Toronto: T) is believed to have at least trialed the vendor's GPON MSAN (multiservice access node). (See Kuwait Opts for FTTH.)
With little headway made, putting a halt to GPON investments fits in with the company's stated strategy of putting its R&D dollars only into markets where it believes it can be a leader and make money. (See Nokia Siemens Gets Ruthless on R&D Focus.)
But the NSN spokesman denied the company was looking to sell off its GPON assets. "These assets are not for sale. We will continue to support existing customers, but not invest any further in GPON. In addition, some existing key resources will be moved from GPON onto NGOA," he stated, though he couldn't be totally specific about the details of NGOA.
Heavy Reading chief analyst Graham Finnie has an idea where NSN might be heading with its FTTH home strategy, but he also thinks its current decision is something of a gamble.
"It's surprising they've decided to do this. GPON is where the action is for the next few years where the Tier 1 carriers are concerned, and Nokia Siemens is a Tier 1 vendor," says Finnie. "Even if they focused on point-to-point fiber access in the future, I imagine the Tier 1 carriers will be looking for a mixture of GPON and point-to-point capabilities. This looks like quite a risky move."
At the same time, though, Finnie believes NSN couldn't have matched its peers: "I can't see that NSN would manage to be anything higher than the No. 4 player in GPON. Alcatel-Lucent, Ericsson, and Huawei are all desperate to be the No. 1 player and are highly competitive. I can't see any way NSN could be the No. 1 or No. 2 player in GPON."
Instead, Finnie believes NSN will leverage its investment in Korean vendor Dasan Networks Inc. , an access and optical equipment specialist in which Nokia Siemens owns a 56 percent stake. (See Siemens Converges in Venice.)
And NSN has also expressed an interest in exploring the possibilities of a technology known as long reach, or XL, PON that, in theory, can connect hundreds of customers at distances of up to 100 kilometers, though this is some years away from being a commercial technology, the vendor told Light Reading earlier this year.
— Ray Le Maistre, International News Editor, Light Reading
I am not sure what the "value prop" is for an ONT. It is a demarc and EPON ONTs are driving the pricing. If you want to sell GPON in APAC, you have to be competitive with EPON. Despite prior posts, most EPONs run a 16:1 split so GPON has an advantage at the OLT. So, you can get a small price bump at the ONT, but in absolute terms that is not much.
The bandwidth problem with GPON is it is based on sharing the 2.5G fiber. The design of the OLTS are also bandiwdth limited - the ONT GPONs are expensive. Increasing to a higher BW rate for GPON say 10G drives up the cost of the ONTs.
So less fiber in the CO with GPON but more bandwidth bottlenecks in the fiber PON - means higher priced ONTS now and in the future. That is why Verizon and the like has had a terrible time trying to get the price of the ONT to their liking. They have not succeed !
The key word here is 'Active' placed outdoors. This means you need to power a device that must be hardened to a wide range of weather effects, not only temp but humidity. Those cheap devices need not apply unless you have a lot of trucks to run.
The thing you are missing is that that "Large Aggregation Switch" is competing against a $100 piece of glass that is a splitter.
This is the point that everybody seems to miss. You can put many customers per CO side port (OLT in PON terminology), where you put 1 in active Ethernet.
The customer termination devices can cost about the same. So, Active Ethernet costs a LOT more at the CO termination end.
Now, I know that people are going to howl about how cheap home routers are. I am going to point out that Indoor ONTs are about the same price for about the same throughput.
Just one comment on this post, when you have 90,000 users on an Active Ethernet network you typically build outdoor aggregation points which will give you similar or better fiber count as the splitters of PON. So cable wise Active and PON are identical. Installing this cabinet when you put large aggregation swtiches inside doesn't cost you that much per port and still keep the economics of Active Ethernet competitive to PON
I don't know if you have a trick definition of "fully loaded", but I don't believe there would be any trouble at all finding you quite substantial Calix or Occam shelves and networks carrying commercial IPTV deployments. Where do you live and how far are you willing to drive to give me a hundred bucks? And what does finding a fully loaded IPTV shelf have to do with GPON being a dinosaur, anyway?
You also mentioned "the ONT vendor that Calix snatched up two years ago". Do you perhaps mean Vinci that Tellabs bought up a few years back? They were an ONT vendor. When Calix bought Optical Solutions a few years back, OSI was a manufacturer of a complete FTTP solution, not just ONTs. And in either case, yes I remember them and I can name them too! :-)
The blogs and comments are the opinions only of the writers and do not reflect the views of Light Reading. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
To save this item to your list of favorite Light Reading content so you can find it later in your Profile page, click the "Save It" button next to the item.
If you found this interesting or useful, please use the links to the services below to share it with other readers. You will need a free account with each service to share an item via that service.
Digg
Del.icio.us
Reddit
