September 8, 2003
ORLANDO, Fla. -- NFOEC 2003 -- Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI) has finally started openly discussing its big fiber-to-the-premises (FTTP) solution (see AFC Plans FTTP), a set of products that the industry has heard about thanks to AFC's participation in the big RBOC FTTP request for proposal (RFP).
Why did it wait so long? The short answer is: In the FTTP market, AFC was flying by the seat of its pants.
The company was initially developing its FTTP solution for one of its incumbent carrier customers that is not affiliated with the big RFP announced this summer by Verizon Communications Inc. (NYSE: VZ), SBC Communications Inc. (NYSE: SBC), and BellSouth Corp. (NYSE: BLS) (see Vendors Await FTTP Shortlist). "We weren't prepared to talk about it," says Ryan Koontz, director of marketing at AFC.
Once it got word of the big RFP, AFC adjusted its previous customer plans and threw its hat in the ring. "We had to make a baby in eight months," says Koontz [ed. note: I hate that!].
The result of AFC's efforts is FiberDirect, a complete FTTP solution that hinges on an optical line terminal (OLT) card for AFC's AccessMax digital loop carrier (DLC) platform. The FiberDirect OLT supports 32 passive optical networks (PONs) -- about four less than an Alcatel SA (NYSE: ALA; Paris: CGEP:PA) 7340 OLT. Each PON delivers a total of 622 Mbit/s downstream and 155 Mbit/s upstream and can be shared by as many as 32 customers.
AFC is, however, touting its ability to blend into a carrier's legacy voice network better than anyone else. "We have the broadest support of Class 5 switches in the U.S., including the Lucent 5ESS and GTD-5, Nortel’s DMS family, and Siemens’ EWSD—each for GR-303, TR-08 and TR-57 interfaces," says AFC chairman and CEO John Schofield, in a prepared statement.
The real story for AFC is that the FTTP opportunity offers some light at the end of the tunnel for the DLC market, a market that's known to be in decline -- despite the onslaught of several broadband DLC startups (see DLC Shakeout Looms). "The DLC market is getting smaller and there are about six to eight vendors out there fighting for the $50 million piece of the IOC market that we don't have," Koontz says.
AFC has an installed base of more than 100,000 AccessMax platforms, the company says, and Koontz estimates that, overall, the slots on those systems are about 60 to 70 percent full. While that hints that there's room to add lots of FTTP capacity, it also hints that, depending on where they're located, carriers have got quite a bit of room to go before needing more DLCs.
Merrill Lynch & Co. Inc. estimates that the RBOCs in the FTTP RFP will spend about $300 million to $400 million during the first year of deployments with the vendors it picks (see Merrill Boosts AFC). Should FTTP give DLC platforms a boost, AFC will be able to offer the triple-play promise that larger carriers seem to have a tough time delivering over their existing copper-based access networks.
"We might as well cannibalize ourselves rather than watch someone else do it," Koontz says.
— Phil Harvey, Senior Editor, Light Reading
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