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Cable/Video

FTTH Technology Fracas Continues

During 2007, the world's telecom carriers connected another 9 million homes to optical fiber; by 2010, if current trends continue, the number of homes connected to FTTH will pass 50 million. A massive transition to all-fiber access is now all but inevitable everywhere. Yet the road to FTTH is full of twists and turns that make it difficult and frustrating for vendors to negotiate – not least in determining what technologies will be used, where, and when.

For a start, despite the strenuous efforts of GPON cheerleaders such as Alcatel-Lucent (NYSE: ALU), there's no chance that GPON is going to dominate global FTTH deployment any time soon. In fact, as we reveal in Heavy Reading's new report, FTTH Worldwide Technology Update & Market Forecast, the deployed bases of the three main FTTH technologies – GPON, GEPON, and active or point-to-point (P2P) Ethernet – are likely to be more or less equal, by which time around 90 million homes will be connected to fiber.

Given the hyperbole that has swirled around GPON over the past two years, this might seem a surprising conclusion. But the fact is, there is no "global" FTTH market today, and there will be no global FTTH technology – at least, not in the foreseeable future.

Why so? First of all, no two national markets are the same – and even within a single city, one technology may not fit all needs. In Japan, by far the world's biggest FTTH market with more than 11 million connected homes, GEPON is universally used to connect single dwellings, while active Ethernet dominates in multi-dwelling units (MDUs), and there's little sign that a shift to GPON in either case is imminent.

Given the size of the Japanese market, that alone means that GPON cannot win the race in terms of sheer numbers any time soon. And although GPON looks certain to be the technology of choice for major incumbent telcos in both the U.S. and Europe, active Ethernet is actually more widely deployed in Europe today – and is likely to maintain that position right through 2012.

The truth is that although the International Telecommunication Union (ITU) Full Service Access Network (FSAN) group has worked very hard to establish GPON as the worldwide reference for FTTH, its strengths – high downstream speeds, carrier-class features, and low opex, among other things – haven't convinced everyone that it is the right technology everywhere, at least not yet. For now, GEPON gear is cheaper and more widely deployed – persuasive qualities in its Asian homeland.

Meanwhile, active Ethernet advocates point to their technology's simplicity, low-cost CPE, and suitability for use in so-called "open access" networks, such as those being built by municipalities and utilites worldwide. Advocates such as Cisco Systems Inc. (Nasdaq: CSCO) argue that incumbents that deploy GPON would in effect be making it more difficult for regulators to ensure that the new fiber networks can be used on equal terms by other service providers – an argument that certainly carries weight in regions such as Europe, where DSL unbundling has driven a vibrantly competitive market.

There is plenty of room for argument around the edges. For example, which way will China jump? China has already brought fiber into or very close to apartment blocks serving at least 15 million homes – far more than anywhere else. Almost all of it is simple Ethernet switching with very little PON deployed to date, but the big Chinese telcos are all preparing to move to PON. While GEPON currently has the upper hand, the longer the Chinese telcos delay, the more likely they may opt for GPON – potentially tipping the scales decisively in its favor.

Widespread deployment of GPON elsewhere would certainly help to make the case in China, since mass deployment will drive down the cost of equipment, and cost is the big issue there: Telcos are seeking a combined price for ONT and OLT of $200 per customer – less than half the typical current price.

However, widespread deployment of GPON probably isn't coming in 2008. While most GPON vendors are bullish about the medium term, it's been a long, slow haul, with many projects running late. Verizon Communications Inc. (NYSE: VZ) has slipped behind its original schedule for GPON; Orange (NYSE: FTE), the biggest European telco committed to GPON, is also behind schedule; and vendors themselves are mostly cautious about the coming 12 months, betting that scale deployment won't really begin before 2009.

It's a Catch-22 that can only be resolved by time – and based on current trends, within a few years, carriers and vendors will need to be thinking about the next generation of technology. In addition to higher-speed P2P Ethernet, WDM PON and 10G PON are both being prepared for launch around the 2012 time frame.

Yet for all the current frustrations, this is a market manifestly worth pursuing and investing in. The transition to FTTH is a once-in-a-generation infrastructure overhaul, and the winners over the next five years will be very well placed to reap continuing benefits for years to come. FTTH is a 20-year project that will entail hundreds of billions of dollars of telco spending, with the aim of achieving domination of wireline networks for decades to come. By any reckoning, that's a prize well worth pursuing – despite the twists and turns in the road ahead.

– Graham Finnie, Chief Analyst, Heavy Reading

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jepovic 12/5/2012 | 3:47:39 PM
re: FTTH Technology Fracas Continues "Then, it really depends on the take rate for channels/programs, if people tend to see a lot of different channels, the statistical gain will be a lot lower, and the benefit over p2p ethernet will be marginal."

Plus, it depends on the size of the PON broadcast group. If you have a 1:128 split, there is some gain, but in a 1:4 or 1:8 case it is virtually none.
ethermac 12/5/2012 | 3:47:39 PM
re: FTTH Technology Fracas Continues BW - PONs are inherently broadcast media - so only one copy of any given program needs to be placed on the PON. PON is very efficient for IPTV - much more so than any point to point.

This is only partially true. In a typical IPTV deployment, where IP Multicast is used, there will be several IP multicast groups. Every group then maps to a multicast group in the media. Then, it really depends on the take rate for channels/programs, if people tend to see a lot of different channels, the statistical gain will be a lot lower, and the benefit over p2p ethernet will be marginal.

In addition, one of the best things of IPTV, which is the real on-demand distribution, obviously won't benefit from an inherently broadcasting media.
paolo.franzoi 12/5/2012 | 3:47:39 PM
re: FTTH Technology Fracas Continues
The whole shebang.

seven
paolo.franzoi 12/5/2012 | 3:47:38 PM
re: FTTH Technology Fracas Continues
I love the thought of on-demand point to point video.

Have you gents added up the amount of metro and long haul bandwidth required? Of course not. So, lets take 5000 homes (a town of say 20,000 folks). Lets give it a requirement of 5000 HD streams at 10Mb/s each. Really want to run 50 Gb/s to a town of 20,000? Really? You are kidding right?

That is the problem with non-broadcast video. If you move to the storage model, then big bandwidths are required nowhere.

As for the Ethernet switch in the basement....maybe for brand new homes. But most folks don't have that at their house. So, again - no direct gige at single family homes.

So, yes direct ethernet is wonderful. Blah blah blah.

seven
mpls2 12/5/2012 | 3:47:37 PM
re: FTTH Technology Fracas Continues PON is the future for ass deployment and I'm with "brookseven" on this, as all others have not even thought things through..

Active P2P ethernet is OK for small scale deployments but for mass large scale it fails heavily on rackspace, power requirements, due to the sheer number of required ports on a switch/MC. That is the key.

The cost of USD100 as mentioned is achievable.. I am not going to expand here because some things people should think things through themselves.

With some chipsetmakers and a couple of operators looking into 10G GE-PON, the case for PON becomes even stronger and because of that I don't even see the point of G-PON.
mr network 12/5/2012 | 3:47:35 PM
re: FTTH Technology Fracas Continues Just want to comment that the rack space is dependent on what split factor you belive in. I think its will end up in small 1:4 or 1:8 just like EPON and then there is no benefit in CO space.

Also the 10 G PON does not solve the problem since it will be MUCH more expensive. As you you know 10 GE has been around for many years and is a mature technolocy but still its to expensive for uplinks in access due to the opto cost and why would 10 G PON that is a new technology offer super aggresive price advantages over a 8 years old technology?
mr network 12/5/2012 | 3:47:35 PM
re: FTTH Technology Fracas Continues The Active Ethernet systems is not the same as Enterprise systems but they share a lot of the same components.

In Active ethernet people are using a simple OE converter that cost around 5 dollar i volumes. This should be compared to maybe a super aggresive price of 70 USD per ONT which means a switch in the basement which adds maybe 20 USD per port. So the comparison is a ONT of 70 USD and fiberslit cost of 3 USD per port (~73 USD)compared to OE cost and MDU switch cost (~25 USD)

Its also an open network which means no prolems with the FCCs around the world.

Also of course the optical long reach SFP opto is used on the uplinks and not on the customers ports.

mpls2 12/5/2012 | 3:47:35 PM
re: FTTH Technology Fracas Continues First sentence should be "mass deployment" not "ass deployment"
mpls2 12/5/2012 | 3:47:34 PM
re: FTTH Technology Fracas Continues mr network..

You are advocating FTTB (fiber to the basement).

So you have:-

Suscribers----Switch-----uplink(Gig fiber)

Don't you also have oversubscription the switch, unless you have good OOS (which makes it more expensive than a simple switch you advocate), then you have nothing over PON..

The uplink still has to be connected P2P to a switch in the CO. because it is still 1:1 here, think of all those active elements and rack space and power requirements etc ..

Even a 1:4 ratio for PON is still 4 times better then 1:1 for active.. I can tell you right off that 1:16 is the minimum for PON.. 1:32 and 1:64 even is possible.. and with 10G GE-PON it could be even more..

I can tell you haven't worked for any large scale projects, perhaps only dabbled in a small scaled active solution with only a few thousand subscribers..

With a PON solution, the cost is significant only at the ONU side where the volume is and believe me brrokseven is in the ballpark with his figures..
mpls2 12/5/2012 | 3:47:34 PM
re: FTTH Technology Fracas Continues
" Also the 10 G PON does not solve the problem since it will be MUCH more expensive. As you you know 10 GE has been around for many years and is a mature technolocy but still its to expensive for uplinks in access due to the opto cost and why would 10 G PON that is a new technology offer super aggresive price advantages over a 8 years old technology? "


You misread my thinking.. I'm putting in 10G GE-PON to dispell mutterings of lack of bandwidth in 1 gig despite the fact you are advocating 1 gig over a P2P active solution .. With more deployments costs will go down and in fact 10G will be within reach..

You miss the point of PON totally, if you look at it from the pint of view of a single PON port at the CO. notice that it will serve many subscribers, 16 is very good, 32 is also possible and 64 that is the theoretical for GE-PON at this moment but who knows what 10G GE-PON will bring in the future...

So the split for PON will save you transceiver cost at the CO (Central Office), which is significant.
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