Nokia Siemens Dumps on GPON

BRUSSELS -- Broadband World Forum Europe 2008 -- Having decided to pull out of the GPON market, Nokia Networks (NSN) is now taking very public pot shots at the passive optical access technology, claiming that it's uneconomic to deploy and will be redundant by the time residential fiber access is widely deployed. (See 'Run Away!' Nokia Siemens Retreats From GPON and Nokia Siemens Confirms PON Plans .)

Outlining the company's fixed broadband access strategy in Brussels this week, NSN's chief technical officer Stephan Scholz told journalists and analysts that VDSL2 technology is mature enough to rival GPON in terms of bandwidth capabilities, and that GPON will be an outdated technology by the time fiber-to-the-home (FTTH) becomes a mass market in four or five years' time.

By that time, carriers will be able to migrate straight to next-generation PON technology, namely wavelength division multiplexing-passive optical network (WDM-PON), making GPON redundant, believes NSN.

That's why NSN is focusing on developing what it calls next-generation optical access (NGOA) technology, and has ditched its previous GPON approach. "We don't believe we would have been able to get our investments back on GPON because we see there is a delay in GPON rollout... The current turmoil in the financial markets could further delay GPON," stated Scholz.

Instead, NSN says "technology tricks" enable VDSL2 to deliver downstream bandwidth of up to 100 Mbit/s over 1 kilometer, which, believes NSN, is more than enough bandwidth to cope with any service mix likely to be offered in the near future.

When asked about the "tricks," Scholz said that didn't mean NSN was looking to introduce proprietary enhancements to VDSL2. Instead, he said NSN is working with chip vendors to introduce ways to reduce crosstalk on copper access lines, using technology such as dynamic spectrum management (DSM).

Scholz also claimed, using statistics gleaned from a recent report published by the Broadband Stakeholder Group (BSG) in the U.K., that deploying a fiber-to-the-curb/VDSL2 access network in Europe costs, on average about 20 percent of a GPON deployment covering the same market, while point-to-point active Ethernet access costs even more to deploy than GPON. (See Report: UK FTTH Would Cost $50B.)

However, the BSG's report was focused on potential U.K. costs, and while NSN is happy to use that as representative of any European market, an analyst who contributed work to the BSG report told Light Reading he was uncomfortable with the way the report's findings had been used in NSN's presentation.

So is NSN's position credible?

Well, it's "not ridiculous," says Heavy Reading chief analyst Graham Finnie. "GPON has made little progress outside the U.S., even though it is supposed to be a global technology. EPON has dominated in Asia/Pacific, and in Europe much of the fiber access is point-to-point." (See FTTH Technology Fracas Continues.)

Adds Finnie, "some European incumbents have committed to GPON, but it's going slowly, and it's possible that in a few years the industry might move on to another technology." (See FT Fleshes Out FTTH .)

However, ongoing GPON developments have to be considered, especially 10-Gig GPON, notes Finnie. If that development becomes viable then "that will get GPON through a few more years." (See Huawei Raises the Optical Stakes and WDM-PON Faces 10G Challenge.)

Overall, NSN "has a point, but there is a strong argument to say that GPON will be widely deployed globally, including in Europe, the Middle East, and in emerging markets, particularly China, which will be the big one," adds the analyst.

Finnie also questions NSN's claims that VDSL2 is capable of 100 Mbit/s downstream in commercial deployments. "There is no evidence that VDSL2 can achieve that sort of bandwidth," says the Heavy Reading man.

Not surprisingly, the GPON camp is dismissive of NSN's claims. "There are so many ways in which they [NSN] are wrong," says Marcus Weldon, CTO of Alcatel-Lucent (NYSE: ALU)'s Fixed Access Division.

"Carriers need to find the services to justify the investment in GPON, sure, but Verizon Communications Inc. (NYSE: VZ) has found this with its triple-play offer, with quite straightforward video services," continues Weldon. "And GPON always makes sense in greenfield deployments -- even the MSOs agree on that," he adds. (See Verizon Leads the Great 100-Mbit/s Bandwidth Race.)

— Ray Le Maistre, International News Editor, Light Reading

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digits 12/5/2012 | 3:30:21 PM
re: Nokia Siemens Dumps on GPON It's possible that NSN has made the right decision for its own business RIGHT NOW, but is it also possible that NSN might be reducing its chances of being a market leader in the next wave of PON access deployments by stepping away from the GPON melting pot?

cw.774 12/5/2012 | 3:30:20 PM
re: Nokia Siemens Dumps on GPON ... was my first thought upon seeing this. Purely business reasons cited by both, and rather short sited reasoning if I remember correctly.

GPON is spawning necesary IP that can be made to do more than just what the FSAN/ITU standard will lay out. I'm grateful to folks taking on investment in any of the technologies really. 'sort of afraid of the variety & complexities approaching that of xDSL and wireless, but that's job growth one can argue!
olsen 12/5/2012 | 3:30:20 PM
re: Nokia Siemens Dumps on GPON I guess NSN has come to the same conclusion as Nortel - WDM-PON will be the end game for FTTH. They have sold their entire stake (50%+) in Dasan, the South Korean market leader in GE-PON. Until WDM-PON becomes widespread, they hope to sell VDSL2 thus dissing GPON. Pure politics re. VDSL2 and in the end it could end up being a wise decision to go the lambda route.
opticalwatcher 12/5/2012 | 3:30:20 PM
re: Nokia Siemens Dumps on GPON Interesting that they are pushing the AT&T argument over the Verizon argument.

I've seen AT&T VRAD boxes. I could hear the fans trying to cool down the internal chassis in the hot sun. This isn't a bunch of chassis inside a CO building somewhere--these are outside, sprinkled all over the neighborhood--exposed to hot sun, rain, snow, hurricanes--you name it. When something in the electronics blows (and this will invariably happen), you have to send out a tech to drive around the neighborhood and try to debug and fix the problem outside, potentially in the middle of a freezing snowstorm.

In an era when CO's income, costs, and staffs are shrinking (or should be), these companies are signing themselves up to a labor-intensive, outdoor high-maintenance problem for the rest of time (or until they realize their mistake).

GPON has no active electronics in outside boxes. It is fiber from the CO to the home with passive splitters in between. Maybe initial costs are higher, but long term it will be much cheaper. And once the fiber is in, other technologies can be implemented as they improve. In other words, there's lots of room to grow, as opposed to a high-maintenance dead-end.

Harsh words, but the customer is the one who ultimately loses out when short-sighted cheapskates (and their sour-grapes vendors) try to keep low-bandwidth copper alive.
telecom_guru 12/5/2012 | 3:30:20 PM
re: Nokia Siemens Dumps on GPON NSN is so full of it, guess since they had no shot at GPON they can say anything they want now. reality is GPON is being used globally by many carries now (including VZ and AT&T here in USA) and the evolution from 2.5G to 10G PON will give it a long life indeed. The same argument that this idiot uses for copper (VDSL2) can be extended to fiber. NSN you guys lose... just admit it....
telecom_guru 12/5/2012 | 3:30:19 PM
re: Nokia Siemens Dumps on GPON Yes Like Nortel has made allot of wise decsions lately huh? The reality is this, GPON will be widely deployedfor the next several years. It's got a ton of runway with 10G PON coming next. Everybody knows that the key cost issue for the carries is the fiber runs (in the last mile) not the technology being used. Once they have invested in the fiber for FTTH they can move along the technology curve as needed (GPON @ 2.5G, the @ 10G then move to Lambda's - all this is business case driven)

End of story!
alandal 12/5/2012 | 3:30:19 PM
re: Nokia Siemens Dumps on GPON Telecomm used to be built on some sort of grand-unification schemes. However, the reality today is very diversified so much so that everyone (including both carriers and vendors) can only take one area that they think best fits their game to start with.

From technology point of view, if GPON is going to be obsolete when WDN-PON comes around, VDSL local loop is already obsolete. But this is only technology we are talking about here. There are still market segments that are perfect for VDSL.

NSN cannot catch GPON, then why not scale back to copper. To justify their position, they will use WDM-PON to slow down G-PON if they can.

When WDP-PON is indeed here someday, let's see where NSN would be at.

olsen 12/5/2012 | 3:30:19 PM
re: Nokia Siemens Dumps on GPON I never argued that GPON will be widely deployed - and so will WDM-PON. Sooner rather than later (citation from HR). Oh, and if the fiber run is the key kost (which it is) - why not go lambda straight away? Several operators are talking about going that route, skipping GPON all together (and don't pull the VZ/ATT card - the world is much bigger than the US)
telecom_guru 12/5/2012 | 3:30:19 PM
re: Nokia Siemens Dumps on GPON yes yur scenario is possible but I'm thinking unlikely.. and it's not just VZ and AT&T going with GPON for FTTH, my information suggeste that there are several other large carries, outside NA, looking to do the same. WDM PON needs to mature much more b4 one can conside it replacement for GPON.
alandal 12/5/2012 | 3:30:18 PM
re: Nokia Siemens Dumps on GPON yes, those are typos. my bad, my fat fingers too.
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