Alcatel SA (NYSE: ALA; Paris: CGEP:PA) has introduced a new box in its fiber-to-the-premises (FTTP) arsenal -- the Alcatel 7340 FTTU Business Optical Network Termination (B-ONT). The B-ONT is meant to reside at a customer location, where it would receive connections from Alcatel's 7340 optical line terminal (OLT) product, the switch that provisions PON circuits from a carrier's central office.

This isn't Alcatel's first ONT product. It talked up its residential product a year ago and has since announced five customers, including two public utilities and SBC Communications Inc. (see SBC Takes a Dip Into PON). But the new product is targeted at businesses, as opposed to residences.

The move may indicate that Alcatel is aiming at the small to mid-sized businesses that are passed by fiber, rather than waiting for an explosion in fiber-to-the-home (FTTH) technology.

There are now only about 70 communities in 20 states that have folks who get their data and telecom services via FTTH. Other methods of getting residential broadband services are quite a bit more accessible. In cable's case, about 80 percent of the 103.7 million homes passed by cable are eligible for broadband service, according to info from the National Cable & Telecommunications Association (NCTA).

Alcatel's new gear gives carriers another set of services for new office parks or live/work lofts -- buildings that are zoned for both residential and commercial use. It also gives Alcatel a chance to more squarely compete with FlexLight Networks Inc., Quantum Bridge Communications Inc., and other PON vendors targeting the business market.

"Our research shows that there are a lot of businesses that need more than four POTS [lines], but aren't quite ready for a PBX," says Mark Klimek, senior director of business development for Alcatel's fiber-to-the-user (FTTU) group.

Alcatel's residential ONT has four POTS [plain old telephone service] connections, a 10/100-Mbit/s Ethernet port, and a video port. Its new B-ONT, however, has eight POTS lines and four DS1 (1.5 Mbit/s) interfaces, in addition to the 10/100 Ethernet and video connections.

Klimek says each Alcatel OLT supports 36 PONs. 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. The B-ONT gear simply gives a carrier another option for carving up those PON circuits and, theoretically, charging a higher price for the service than most residential customers would pay.

The new B-ONT won't have a market impact for several months, maybe longer. The product is just entering trials with two North American carriers this week and won't be generally available until sometime next month.

(For the latest on Alcatel's plans, see the new Light Reading Interview with Niel Ransom, Alcatel CTO.)— Phil Harvey, Senior Editor, Light Reading