'Run Away!' Nokia Siemens Retreats From GPON

Nokia 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.)

That leaves a little more breathing room for the likes of Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), and Huawei Technologies Co. Ltd. , which have made greater headway in what is a growing market. (See Neuf Does GPON With AlcaLu, GPON Gets a 10G Look, Bright Prospects for GPON, AlcaLu: We're Not Just a GPON Player, BT Preps GPON Shortlist, and Ericsson Adds to Euro GPON Action.)

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 Zhone Solutions Inc. , an access and optical equipment specialist in which Nokia Siemens owns a 56 percent stake. (See Siemens Converges in Venice.)

Dasan has already developed a next-generation optical access platform based on WDM PON, a technology that is rapidly becoming the hot access topic of the summer. (See Ericsson Joins Cost-Cutting WDM-PON Team, WDM PON: Sooner Rather Than Later?, NXTcomm Preview: GPON & WDM-PON, and Tellabs Lays Out WDM-PON Plan.)

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

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vrparente 12/5/2012 | 3:36:50 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON They are dropping it for EPON. Do the math. NSN is active in IEEE P802.3av (10GigEPON). GPON product goes to the shed. NSN owns Atrica. It's a great P2P Ethernet product, they do not need to build a new product in that space. For PON, they will beed a new product to do 10GigEPON.
mgardner750 12/5/2012 | 3:36:49 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON Siemens sold their GPON ONT to Texas Prototypes in 2006.

I'm only surprised it has taken this long for them to exit the rest of the GPON business.
ymchu 12/5/2012 | 3:36:45 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON When IP keep replacing ATM, what else service carriers really need to care and stick with GPON?

Just curious...
jmlspt 12/5/2012 | 3:36:45 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON Please don't reduce the EPON v.s. GPON battle to mere bit rate figures... GPON is more attractive to provide carrier-grade services while EPON comes short on that! Furthermore, if EPON evolves to 10Gbps, so will GPON in the meantime (FSAN are not sleeping).
derac 12/5/2012 | 3:36:44 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON GPON has been more attractive to service providers for a couple of reasons: 1) It is a more defined specification. The ITU G.9xxx series defines the technology from a service delivery perspective. The IEEE 802.11xx specs define a technology period. 2) They were moving from BPON and its ATM foundation which added a degree of confidence in delivering TDM traffic [voice]. GPON technology is inherently more expensive to deploy given the ONT optical costs. The GPON vendors are struggling with ONT margins. EPON deployments in Japan have much lower price points that current GPON deployments. That will only get worse if GPON tries to move to 10G. Its not to say they won't but it won't be cheap.
opticalwatcher 12/5/2012 | 3:36:42 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON "When IP keep replacing ATM, what else service carriers really need to care and stick with GPON?"

GPON also has GEM, which is an ecapsulation for Ethernet, and is, in fact, more efficient at transporting Ethernet than EPON is. I've heard that the ATM portion isn't even being used anymore.

GPON's main advantage is it is 2.5 Gig vs EPON's 1 Gig. EPON's main advantage is price. That's why I don't see 10Gig EPON happening, at least in the short term. If they weren't willing to pay the small price increase to go from 1 to 2.5Gig, how can you expect EPON's customers (primarily Asia), to pay a -lot- more for 10Gig?

bollocks187 12/5/2012 | 3:36:34 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON DEAD.

Some of you may know my comments on this GPON .

ANY carrier who is deploying GPON IS going to be in trouble.

GPON is a 'technocrat' driven specification by some large carriers that have managed to screw the vendors - FSAN-BPON-GPON is a failure.


Large vendors - Tellabs out, Siemens out many many more will fall away.

Small vendors CALIX, ZHONE, PANNAWAY, OCCAM are all barking up the WRONG TREE.

Net is either EPON or DIRECT ETHERNET will win - because it is MORE OPEN to multiple vendor participation. Forget the technical jibberish.


opticalwatcher 12/5/2012 | 3:36:34 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON "ANY carrier who is deploying GPON IS going to be in trouble. "
What kind of trouble?

Will win what? Competition? In the US, Verizon is installing GPON. AT&T is installing DSL. Cable is installing, well, cable. Who is installing EPON or direct Ethernet?

Or are you talking Asia? EPON has already won there, though GPON is catching on (bullocks, how can that be?

Are you talking Europe?

Certainly direct Ethernet is more open (though it requires more infrastructure), but how is EPON more open? I buy the GPON or EPON chips, and build the board. The IO to the chip is Ethernet. A lot of these GPON vendors you mentioned are tiny companies. Certainly nothing seems to be holding back vendor participation except low margins, which are certainly even lower with direct Ethernet.
bollocks187 12/5/2012 | 3:36:33 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON
The less vendors supplying equipment = higher prices.

The idea is that we have OPEN interfaces between OLT and ONT. This is not the case with GPON it is a closed system.

The xDSL market achvieved this hence the low prices and many vendors partipating in the rollout. GPON is a closed system - therefore no competition = higher prices.

YEs Verizion and ATT are installing GPON - but that is a mistake ;-) made by the very same technocrats driving the standards. That is why very few vendors can exist and stay the course with ATT and Verizon because the prices demanded are non-competitive. Show me a GPON vendor that is making money with GPON - u cannot cause there is NO ONE.

EPON is cheapr than GPON and it is more open - thats a fact ;-) it is not in the interest for large vendors to make the standard open in real world deployments - thats a fact.


Direct Ethernet is both OPEN and CHEAPER than PON - that is also a FACT.
paolo.franzoi 12/5/2012 | 3:36:33 PM
re: 'Run Away!' Nokia Siemens Retreats From GPON
Boy Bollocks does sound like Mr. Yim....especially now that he works at a direct Ethernet firm.

To be a bit fair, the Interoperability on GPON is not there. As far as I can tell there are no plans to actually make it 3rd party interoperable in any effective way. At least we are past Tcont usage.

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