Service Provider Split Emerges Over NG-PON2 Upgrade
LONDON -- Broadband World Forum 2016 -- Several of the world's biggest service providers have championed the emerging NG-PON2 standard over rival XGS-PON technology, highlighting its ability to support residential, business and mobile backhaul service offerings on a single platform.
Despite this agreement on the end goal, however, there are sharply diverging opinions about the next steps for ultra-fast broadband investment. Verizon Communications Inc. (NYSE: VZ) is focused on getting to NG-PON2, which is designed to support between four and eight 10Gbit/s wavelengths over a single fiber, as speedily and efficiently as possible. It hopes to introduce a commercial offering as soon as next year. Yet concerns surrounding the NG-PON2 technology costs are driving AT&T Inc. (NYSE: T) and Vodafone Group plc (NYSE: VOD) to look at XGS-PON, a symmetric 10Gbit/s system, as an interim move while NG-PON2 vendors address the cost and technical challenges.
The big hurdle lies on the optics side of the equation. NG-PON2 relies on tunable optical transceivers, which should offer more flexibility and capability than the fixed optics used in XGS-PON. At the moment, however, operators reckon the costs of tunable optics are too high.
"The cost of the optics is something the vendors are working on and it's a matter of time before we get those to the right level," said Vincent O'Byrne, Verizon's technology director, during today's Broadband World Forum in London. "With business services this is a no-brainer but residential services are a bit more sensitive to cost."
Quizzed about what it was doing to lower costs, GoFoton Holdings, an optics company based in New Jersey, insisted that it was doing all it could to satisfy operator demands. "The technology is there and so it is a matter of cost," said a company representative at today's event. "With leadership in the industry we will make optics available at the right cost."
However, Light Reading has learned there is some unhappiness within the vendor community about the pressure from service providers to reduce the cost of a technology that has yet to see the light of day. There have even been suggestions that only a couple of vendors in low-cost markets will be capable of reaching the desired price points. Paradoxically, that could deal a blow to operators hoping the move to NG-PON2 will create opportunities to work in a multivendor environment, instead of being tied into one supplier's products.
Clearly, the cost concerns are not stopping Verizon from pressing ahead with its NG-PON2 plans. The operator is evidently more worried that investing in XGS-PON before switching to NG-PON2 would ultimately prove even costlier.
"We are going straight to NGPON2 because it's a lot of effort to upgrade the platform and hard to convince anyone to go to a technology knowing you will replace it in a couple of years," said O'Byrne.
Verizon's concerns are shared by Ucom , an Armenian service provider that has this week announced plans to roll out an NG-PON2 network in partnership with broadband equipment vendor Calix Inc. (NYSE: CALX). "We want to go straight to NG-PON2 because of the advantages it brings," said Aleksandr Vesayan, the business development director and deputy CEO of Ucom. "We are building a network of small cells next year and with that we need a backhaul solution -- we aim to start trials in 2017 and hope that components challenges will be solved sooner than expected and that we'll have something available next year."
By contrast, both AT&T and Vodafone are planning to roll out XGS-PON to satisfy short-term needs before turning their attention to NG-PON2. "We would like to start deploying XGS-PON next year depending on market requirements in countries and move later to NG-PON2 when components are available," said Bruno Cornaglia, a fixed access manager at Vodafone Group. Tom Anschultz, a distinguished member of the technical staff at AT&T, says the US operator has similar plans to first use XGS-PON in the residential market before later moving to NG-PON2.
Interestingly, AT&T thinks it can mitigate the costs of rolling out two separate systems in a relatively short span of time through some of its open source technology efforts and software activities. The operator has been developing a specification it calls "AT&T open GPON," making use of merchant silicon that can support both XGS-PON and NG-PON2 standards. The aim is to ensure that future upgrades -- including the transition from XGS-PON to NG-PON2 -- are far less onerous than previous ones.
Should tunable optics costs fall as quickly as operators hope, all of this may prove unnecessary. But the activities clearly tie in with AT&T's broader initiatives in the software and virtualization space, and could aid technology transformation that occurs beyond NG-PON2. Verizon and Ucom, meanwhile, appear to be shouldering some risk.
— Iain Morris, , News Editor, Light Reading