Vendors Vie for FT GPON Deal

BARCELONA -- FTTH Council Europe 2007 -- Fiber access equipment vendors are lining up to pitch for a gigabit passive optical networking (GPON) deal at Orange (NYSE: FTE), which is planning to spend €270 million (US$351 million) on a fiber-to-the-home (FTTH) buildout during the next two years. (See FT Fleshes Out FTTH and PON & FTTx Update.)

The carrier is believed to have a GPON equipment request for proposal (RFP) out with vendors at the moment, with bids due in by April as the carrier ramps up its FTTH rollout. France Telecom deployed Alcatel-Lucent (NYSE: ALU) GPON equipment for its 2006 trials. (See FT Unveils NGN, FTTH Plans.)

But that newly formed giant vendor faces stiff competition for FT's new GPON business. ECI Telecom Ltd. , which is an incumbent VDSL2 equipment supplier to France Telecom, plans to pitch its GPON solution, executives said here today. (See ECI Adds GPON and ECI Drops Despite VDSL2 Coup .)

And talk on the show floor pointed towards at least another three hopefuls. Industry executives with knowledge of FT's RFP process say they expect Ericsson AB (Nasdaq: ERIC) to put itself forward. The Swedish vendor is keen to be an FTTx player, and is developing a GPON blade for its multiservice access node (MSAN). (See Ericsson: Hungry for PON.)

Ericsson is playing it cool. "We have a number of priorities this year, and GPON is one of them," says Peter Linder, the vendor's director of network strategy, but he wouldn't be drawn on any RFP comment.

The surprise name being linked to the RFP is French firm Sagem Télécommunications SA , which is best known for its customer premises equipment. But the company has a DSLAM and already resells Atrica Inc. Ethernet gear for point-to-point active Ethernet deployments -- and it has won such business in France with CiteFibre .

However, it hasn't been active in GPON to date. But one industry source suggests Sagem has held OEM talks with GPON vendor Terawave Communications Inc. , which already has a similar deal with Fujitsu Telecommunications Europe Ltd. (See Fujitsu Picks Terawave.)

A Sagem executive here in Barcelona says a relationship with Terawave is possible, though "no decision has been made yet." He adds that a relationship with another GPON vendor, from the Asia/Pacific region, is also possible.

Terawave had not responded to a request for comment as this article was published.

Another name suggested, but not known to be preparing a bid, is Siemens Communications Group . It won a GPON deal in Denmark in October 2006 with Danish utility EnergiMidt , which has been commercially deployed since December last year. Siemens executives here in Barcelona couldn't comment on any ongoing bids or trials.

Whoever wins any initial GPON business at FT will not get rich as a result -- only a small, but unknown, portion of the allotted €270 million capital expenditure will be spent on GPON equipment. But the initial rollout, which covers about 1 million French homes, will be followed by a much broader, national rollout in 2010-2012, industry analysts believe.

As a result, vendors are keen to gain incumbency with a view to being part of the broader rollout, not only in France but in other territories where FT has broadband plans. (See France Telecom: 'More IPTV, Please'.)

That, and the fact that FT is the first major European incumbent to commit to FTTH and will therefore be a showcase for others, makes this a deployment that others will watch closely. Roland Montagne, head of broadband practice at French research house Idate believes 2007 will see many regulatory issues resolved in Europe, followed by a number of major FTTH rollout announcements by European incumbents in 2008. GPON is expected to be the dominant FTTH technology deployed in Europe.

— Ray Le Maistre, International News Editor, Light Reading

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Mark Sebastyn 12/5/2012 | 3:15:08 PM
re: Vendors Vie for FT GPON Deal OK - what are the odds that a FRENCH vendor wins this one?
paolo.franzoi 12/5/2012 | 3:15:08 PM
re: Vendors Vie for FT GPON Deal
ehhhh [blows out a cloud of smoke and puts a look of disdain on his face]

I hear Jerry Lewis does not do GPON...so eh....it will be 100% French!

seven :)

PS Everybody else is bidding to ensure Alcatel doesn't charge an outrageous price.
xornix 12/5/2012 | 3:15:06 PM
re: Vendors Vie for FT GPON Deal You can be happy I am older than 21, otherwise you would end up in prison for giving me your email and asking for a banana show ;>)
xornix 12/5/2012 | 3:15:06 PM
re: Vendors Vie for FT GPON Deal You guys either have no idea what you are talking about or you are blinded by bad experiences working for a company bidding for FT. At FT as well as virtually everywhere in Europe, these days are pretty much over.

Given the regulatory situation on both sides of the ocean, I would say that RBOCs have a much less competitive environment and thus more space to play political/protectionist tricks, a game European incumbents can't afford any more. They are too busy trying to slash CAPEX.

Get this: How many Huawei DSLAM/OLTs (or other networking widgets for that matter) have been deployed in North America? And in Europe?

The article is mostly wrong anyway, on about every possible detail. Ray, I guess you should find other monkey buddies, the ones you're hanging out with are hiding the bananas far away from you.
digits 12/5/2012 | 3:15:06 PM
re: Vendors Vie for FT GPON Deal Xornix
Care to enlighten me (or show me your banana, which ever you like)?
I'm intrigued to know about all the bits in the article you say are wrong.
[email protected]

I can assure you that the buzz here on the show floor in Barcelona is of the FT RFP...


digits 12/5/2012 | 3:15:05 PM
re: Vendors Vie for FT GPON Deal True.... talk about asking for trouble.

Good job I didn't mention the plums....

Back to the subject in hand, it seems the current France Telecom GPON procurement process might be quite advanced. Stand by for further details.

To the French vendor point -- I think the days of nationalistic contract awards are on the wane. Look at what happened to Marconi in the BT 21CN process, and FT's initial NGN engagements go beyond its home borders eg Ericsson for IMS.

Having said that, as Alcatel was the GPON provider for last year's trial, it's well positioned to land some more business.

paolo.franzoi 12/5/2012 | 3:15:04 PM
re: Vendors Vie for FT GPON Deal
There are no foreign DSLAMs in the US except for that pesky French startup Alcatel with say an 80% market share.

So, call me when the largest vendor in FT is not French. It is very hard in any country to be from another country and become and incumbent if there is a large local manufacturer. That is why the Marconi case is so striking.

xornix 12/5/2012 | 3:15:03 PM
re: Vendors Vie for FT GPON Deal OK, access was perhaps a poor wording. I wasn't including cable, rather telco access.

Concerning your bet, your wife will certainly thank me for not taking it.
paolo.franzoi 12/5/2012 | 3:15:03 PM
re: Vendors Vie for FT GPON Deal
I guess the Access companies in the US - particularly Motorola, Tellabs and Adtran would beg to differ with your characterization.

I would bet my entire net worth that Alcatel gets 100% of the deal. They will force it to be so, there is no way that they will allow a foreigner in to the only GPON tender of any theoretical size in Europe.

xornix 12/5/2012 | 3:15:03 PM
re: Vendors Vie for FT GPON Deal First we were talking "100%", now we're talking the "largest".

What about Alcatel being the (by far) worldwide leader on access, having a strong sales team and strategic assets in the US and the US having no strong incumbent access player anyway?

By the way, care to provide your phone number? I think Alcatel may want to call you on DSLAMs.

Get over it, it is easier to have business relationship with people from the same cultural background and strong local presence, but the "old Europe" is now in a mood where it thinks it has more to gain than to lose at integrating with the world economy, which also applies to the telecoms business.
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