PON & FTTx Update
The first PON standard was APON (ATM PON), which used ATM encapsulation of the transported data and was aimed primarily at business applications. APON was quickly followed by BPON.
BPON (Broadband PON) is the form of PON being almost exclusively rolled out today. It has largely replaced APON in PON deployments because of its superior features. For example, it has survivability, WDM support for video overlay, higher upstream bandwidths, and dynamic upstream bandwidth allocation, which APON does not. BPON can be run at 622 Mbit/s or 1.2 Gbit/s.
EPON (Ethernet PON) was standardized in mid-2004 and is the Institute of Electrical and Electronics Engineers Inc. (IEEE) Ethernet in the First Mile (EFM) standard. It runs at 1.25 Gbit/s symmetric and is suitable for data services. And, of course, it uses Ethernet rather than ATM data encapsulation.
“IP to the home will be impacted almost completely by the cost/performance equation,” says Bill Huang, senior VP and chief technology oficer of UTStarcom Inc. (Nasdaq: UTSIE). “The idea of EFM was to combine Ethernet and PON technologies to provide a most cost-effective and high-performance access technology. Since the architecture combines the point-to-multipoint technology inherent in the original Ethernet technology (based on coaxial cable), it was a straightforward adaptation of Ethernet through the PON, and it became commercially viable very quickly after the ratification of the standard.”
GPON (Gigabit PON) is under development by the same ITU and FSAN groups that developed BPON, and there are a couple of suppliers delivering early versions of GPON today. It looks as if North America, where there is a lot of BPON being rolled out, will favor GPON, because it is an evolution of BPON. GPON will support Ethernet in addition to ATM for the Layer 2 data encapsulation, and it will offer enhanced security.
“GPON is really the continuation of the work done for BPON by the FSAN Group,” says Sayeed Rashid, senior manager of marketing at Alcatel (NYSE: ALA; Paris: CGEP:PA), Access Network Division, North America. “The specifications are really based on the premise that efficient IP transport and bandwidth scaleability are key for the PON in the future. In GPON you have twice the bandwidth scaleability – up to 2.5 Gbit/s symmetric – that you have in the other PONs. With GPON you also have highly efficient IP transport capability compared to other PONs.”
The introduction of the ONT management and control interface (OMCI) specification, adopted in April 2004, largely completes the work for the basic set of GPON specifications. So standards-compliant products should start appearing in 2005, and mass-market deployment should begin in 2006.
Table 1 compares the three main types of PON.
In the market, the battle between BPON and EPON continues, with BPON making up 84 percent of all PON subscribers in Asia in 2004. However, EPON is being rolled out so fast in market-leading Japan that it will overtake Japan’s BPON subscriber base in 2005. NTT East and NTT West together have more than a million subscribers – more than two thirds of the world’s PON subscribers – and these providers are now switching to Gigabit Ethernet PON (GEPON, a form of EPON) almost exclusively.
BPON is the PON technology gorilla in North America, making up 81 percent of North American PON revenue in 2004, and will continue its reign through 2006, when its successor, GPON, becomes more available. GPON is a flexible option for providers because it is designed to handle Ethernet, IP, and ATM traffic, and can stream video over IP or a separate analog wavelength. GPON offers roughly twice the capacity of EPON.
EPON is firmly entrenched in much of Asia, but GPON is gaining momentum in North America, Europe, and several Asian countries, with China a good possibility, where analog video is an issue. By 2008, North America will account for 43 percent of worldwide PON revenue (where GPON dominates), and Asia will account for 39 percent of worldwide revenue (where EPON dominates).