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November 23, 2015
Like unwelcome guests, copper-fortifying technologies such as vectoring and G.fast have gatecrashed the fiber-to-the-home/building (FTTH/B) party, swapped the music for something more downbeat and then headed back to their ageing but still sprightly copper-line friends. (See Copper Soldiers On: Broadband Special Report Part 1.)
By giving operators the ability to squeeze more life out of those old copper lines, new and emerging standards have undoubtedly robbed their FTTH/B brethren of some momentum. Yet service providers in a number of markets, particularly China, are clearly investing in FTTH/B, or looking to do so -- either conscious that copper will eventually become redundant as a fixed broadband access medium or less constrained by regulation and economics.
The chart below, courtesy of specialist research house Point Topic Ltd. , shows that the number of broadband connections running over fiber to the home, building or premises (including those that then connect to an in-building LAN) globally has grown rapidly during the past few years and more than doubled between the second quarter of 2013 and the same period in 2015.
Figure 4: Source: Point Topic.
* Includes FTTH/P/B/x+LAN/B+LAN but does not includes FTTC
The factors that need to be considered by network operators as they consider whether to invest in fiber broadband connections are legion, with competition, regulation, business case, technology and geography most often at the top of the list. (See Gigabit Broadband: What's the Business Case? and Top Tips for FTTH Operators.)
This Prime Reading report is concerned with the current FTTH/B technology options available to network operators.
As when upgrading copper, the decision about which FTTH/B technology to pursue is far from straightforward. While gigabit passive optical network (GPON) deployments have largely crowded out their older broadband passive optical network (BPON) rivals -- and Ethernet passive optical network (EPON) technology has become de facto in some Asian markets -- all players face difficult choices about what to do next. And point-to-multipoint architectures are not to everyone's taste: France's Iliad (Euronext: ILD) is a leading European example of a network operator that has preferred the flavor of Ethernet point-to-point (EP2P).
Others, too, have found that active optical network (AON) infrastructure, which includes active electronics between the central office and the customer premises, suits their needs better. Depending on the topography, an AON network might be easier to manage and more cost-effective to run.
Of course, much of the chatter about the advantages of one standard over another emanates from the vendors backing specific technologies. Alcatel-Lucent (NYSE: ALU), for instance, has been one of the champions of GPON, while Cisco Systems Inc. (Nasdaq: CSCO) has previously talked up the attractions of AON.
Other suppliers of FTTH/B network technologies include the Chinese equipment-making giants that are Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) as well as a variety of more specialist players, including Adtran Inc. (Nasdaq: ADTN), Allied Telesis Inc. , Calix Inc. (NYSE: CALX), DASAN Zhone Solutions Inc. , FiberHome Technologies Group , Iskratel d.o.o. and Zhone Technologies Inc. (Nasdaq: ZHNE).
So what are the main FTTH/B technologies these suppliers have to offer? We have considered the BPON, EPON and GPON standards together, pointing out their similarities and differences, before turning our attention to EP2P and active Ethernet (that's AON, basically). Then it's on to some analysis of the emerging higher-speed options out there: XG-PON1, NG-PON2 and XGS-PON.
Here's a snapshot of the technologies before we dive deeper.
Shared or dedicated capacity
Downstream speed potential
Upstream speed potential
Based on the ATM protocol, BPON has largely been superseded by GPON technology
As its name implies, EPON is based on the Ethernet protocol and has proven popular in a number of Asian markets
Shared (1: 128)
Now the most widely deployed PON technology, GPON works with the ATM, Ethernet and TDM protocols and supports much higher downstream rates than rival first-generation PON technologies
A point-to-point PON variant, EP2P offers much higher-speed services than point-to-multipoint rivals but is costlier to roll out
Uses active electronics between the central office and the customer premises, giving operators more service flexibility
Designed as an upgrade for GPON operators, the standard has fallen by the wayside because of upstream limitations
40 Gbit/s (4 x 10 Gbit/s wavelengths)
Has overtaken XG-PON1 as a GPON upgrade option but is unlikely to see widespread deployment until component costs fall
Currently being reviewed by the ITU, XGS-PON is being promoted as cheaper than NG-PON2 and speedier than XG-PON1
* According to Adtran. Source: Light Reading, vendors.
Next page: BPON/EPON/GPON
The family of first-generation PON standards includes the technologies used in most of today's FTTH/B networks, with GPON thriving in North America and Europe and EPON proving popular in a number of Asian countries.
What distinguishes these standards from the AON technology covered later in this special report is the lack of any electronics between the end user and the central office. In the PON set-up, a fiber-optic cable is run between an optical line terminal (OLT) in the central office and an optical network terminal (ONT) at the customer premises. It is this fiber-optic cable that ferries a light beam, or wavelength, between the network and the end user.
Figure 1: Typical PON Architecture Source: Allied Telesis.
PON deployments are typically based on a point-to-multipoint architecture, which means that a "passive splitter" between the central office and a number of premises divides the light beam among customers (the concept of "shared bandwidth") and recombines data traveling in the opposite, upstream direction. This obviously means that actual connection speeds fall when lots of users in a multipoint "tree" are trying to access services at the same time -- a disadvantage of this architecture next to point-to-point systems -- and rise when there are few people on the network.
The oldest of the three variants, BPON was ratified by the International Telecommunication Union (ITU) in 2001 and is based on the ATM transmission protocol. It can deliver a maximum of 622 Mbit/s on the downstream and 155 Mbit/s on the upstream and support up to 32 users per tree.
It has largely, however, been overtaken by GPON, with US telecom giant Verizon Communications Inc. (NYSE: VZ) the leading example of a major service provider that has migrated to this standard from BPON. Ratified by the ITU in 2004, GPON has a number of advantages over BPON, the first being that it can support ATM, TDM and Ethernet protocols. Capable of delivering as much as 2.48 Gbit/s on the downstream and 1.24 Gbit/s on the upstream, it can also split this bandwidth between 64 users, although this does require the OLT and ONT to be much closer together than when operators are supporting fewer customers. (See Verizon Revs Up Wireline Race With NG-PON2.)
GPON has flourished in North America and Europe, but operators in Japan and China -- by far the world's biggest FTTH/B market, accounting for more than 75% of the total market, according to Teresa Mastrangelo, a senior analyst with Heavy Reading -- have been drawn to EPON, another standard the ITU adopted back in 2004.
As the name of the standard implies, EPON is compatible with the widely used Ethernet protocol and has enjoyed some economies of scale accordingly. It can deliver up to 1.25 Gbit/s on the downstream and 1.25 Gbit/s on the upstream, dividing this bandwidth between a maximum of 32 users per tree.
In the early days, some Asian operators appeared to regard EPON as a more cost-efficient option than GPON, and they have stuck by it since. As Mastrangelo points out, China is now witnessing some deployments of a next-generation EPON technology called 10G-EPON, which can provide shared downstream bandwidth of up to 10 Gbit/s.
Next page: EP2P and active Ethernet
Ethernet point-to-point (EP2P)
Also based on the Ethernet protocol and a PON standard, EP2P differs from BPON, EPON and GPON in a very important respect, jettisoning the splitters and running a dedicated fiber to each customer premises.
By avoiding this point-to-multipoint layout, which forces customers to share bandwidth, EP2P operators can offer much higher-speed services on both the upstream and downstream. Trading under the Free brand, France's Iliad (Euronext: ILD), a standout example of an operator using EP2P technology, launched a service in late 2013 promising downstream connection speeds of 1 Gbit/s and upstream bandwidth of 200 Mbit/s (note the absence of any "up to" qualifying language).
"This is because Free's FTTH network is based on point-to-point technology which means that it can offer very high speeds that are dedicated to each subscriber and can be easily upgraded," said the operator in marketing literature highlighting the technology-related advantages of its service. "The other fiber operators in France have opted for a GPON architecture whereby speeds are shared between homes."
The downside of an EP2P network, according to critics, is that its need for dedicated fibers between homes and central offices (or other aggregation points) drives up costs, making it more expensive to roll out than GPON or other multipoint variants. GPON vendor Alcatel-Lucent has previously claimed EP2P requires 30% more capital expenditure than GPON, although Iliad has insisted the cost differential is not this stark.
EP2P might also be more attractive than GPON from a regulatory perspective because it can be more easily "unbundled" by asset-light operators keen to offer competing high-speed services of their own. According to some observers, the point-to-multipoint nature of GPON makes unbundling difficult, although a range of wholesale access options has emerged in its place (alternatives that have not always been to the full satisfaction of the asset-light players).
Active Ethernet, or AON, technology can also be regarded as a point-to-point standard because it involves running a dedicated fiber to each customer premises. In this kind of network, however, those fibers meet up in an Ethernet switch located between the central office and the home or in the central office itself. It is this use of electronic components that differentiates active Ethernet from any of the PON technologies considered earlier.
Figure 2: Typical AON architecture Source: Allied Telesis.
Heavy Reading's Mastrangelo says that some active Ethernet operators are providing gigabit-speed services, as Iliad is doing with P2P, although most are now offering 100Mbit/s connections to users. The technology has proven especially popular in some of the Nordic markets, according to Mastrangelo.
The use of active Ethernet switches gives operators more control and flexibility than PON rivals when it comes to providing bandwidth to customers. It is also easier to provide symmetrical capability -- whereby upstream speeds match those on the downstream -- with this type of network, which may become increasingly important as consumers take advantage of more advanced data services. (See 4K, Cloud Can Drive FTTx Business Case – Huawei CEO.)
The drawback is that active Ethernet tends to be more costly in terms of operating expenditure. Operators might not only need to maintain more equipment in the field but also require more power in the central office, which could put them off the technology if power sources "are expensive or limited," acknowledges Adtran. In an FTTH primer it published last year, Adtran said that "[active Ethernet] electronics are typically more cost-effective when they are deployed to serving areas of eight to 10 homes. Above eight homes, PON electronics are more cost-effective on a cost-per-subscriber basis."
Next page: XG-PON1 and NG-PON2
It is probably not overly harsh to say that XG-PON1 has been a victim of its own bad timing. Ratified by the ITU in mid-2010, the standard was conceived as an upgrade to GPON and is able to support downstream services of up to 10 Gbit/s and maximum upstream speeds of 2.5 Gbit/s. According to Adtran, XG-PON1 is capable of supporting as many as 256 users per tree.
XG-PON1 uses a different wavelength plan from GPON and is designed to let GPON operators re-use much of their existing equipment so as to minimize costs. Yet despite this support for a relatively smooth upgrade and the improvements it offers over GPON, XG-PON1 has largely failed to catch on. While the technology has been launched commercially in parts of Asia, and seen trials in Europe, its international footprint remains limited. (See XG-PON Is Alive in Europe… for Now and BT Puts ZTE's XGPON to Work.)
XG-PON1 immediately faced problems when it arrived on the FTTH/B scene and others have since emerged. For one thing, many operators have been under no great commercial pressure to invest in higher-speed standards. Moreover, with vectoring and G.fast now allowing companies to sweat their copper-line assets for even longer, service providers using a mixture of broadband technologies have seen even less need to look beyond GPON.
The upstream shortcomings of XG-PON1 have also impeded its adoption by operators looking for a bandwidth boost. Although the headline speed undoubtedly sounds fast, it would give each customer less than 9.8 Mbit/s when shared among 256 customers. This lack of high-speed asymmetric capability has been a particular hindrance for XG-PON1 when it comes to business applications. "XG-PON1 has struggled to find traction," says Ronan Kelly, Adtran's chief technology officer. "One trend that has cropped up is the need for convergence towards a single network architecture for efficiencies and with the upstream capability [of XG-PON1] that's limited."
XG-PON1 cannot, however, be entirely written off. In September, Singapore's MobileOne Ltd. (M1) (Singapore: MONE) launched an XG-PON1 service for enterprise customers with "high-bandwidth requirements," as the operator phrased it, "such as gaming and media companies." At the time, M1 said it was aiming to extend that service into the consumer market by the end of the year. Hong Kong's HKT Ltd. is another Asian player that has flagged plans for a mass-market rollout of XG-PON1 services. (See XG-PON Gets Asian Boost.)
While operators in Europe are still wrestling with the investment case for GPON, their counterparts in parts of Asia -- where consumers have long enjoyed connection speeds of more than 100 Mbit/s -- have simply been ready to move on more quickly. And XG-PON1 has been the next step up.
Perhaps the biggest problem facing XG-PON1, however, is the emergence of NG-PON2 as an alternative but even higher-speed upgrade option. (See Alcatel-Lucent Fires NG-PON2 Starting Gun.)
A newer technology that has been going through the standardization process this year, NG-PON2 holds many of the same attractions as XG-PON1 for operators upgrading from GPON, but it also promises far more bandwidth in both downstream and upstream directions. Estimates of its connection-speed capabilities vary, depending on which organization is doing the talking, but Adtran's Kelly -- an authority in this area who is not given to hyperbole -- reckons NG-PON2 will be able to support symmetric services of 10 Gbit/s, addressing the asymmetric shortcomings of XG-PON1. Others have indicated the technology could provide as much as 40 Gbit/s on the downstream. As in the case of XG-PON1, this bandwidth could be divided among a total of 256 users, according to Adtran.
According to Danny Dicks, an analyst with Heavy Reading, NG-PON2 allows operators to use the same optical distribution network they have deployed for GPON, giving vendors a "ready market and straightforward overlay." Instead of bothering with XG-PON1, then, operators investing in GPON could focus on maximizing their FTTH/B profits as much as possible before upgrading to NG-PON2. Dicks also reckons that NG-PON2 would offer PON players some of the upgradability and flexibility typically associated with active Ethernet solutions, allowing them to step up bandwidth capability as and when required. Combined with its upstream advantages over XG-PON1, this would enable operators to launch business and consumer services over the same infrastructure, introducing higher-speed services for consumers as demand dictates. (See 10G PON Technologies: Where Do They Make Sense?.)
Another future opportunity for NG-PON2, says Dicks, is the market for fronthaul and backhaul applications in 4G and 5G mobile networks. The characteristics of NG-PON2 could make it ideal for providing low-latency and high-capacity links between basestations, he explains.
The big problem for NG-PON2 right now is the cost of the components needed to deliver wavelength-division multiplexing (WDM), a technique for carrying signals over optical fibers that is used with NG-PON2 technology. Without lower-cost WDM components, NG-PON2 may have trouble making it as a mainstream solution.
Next page: XGS-PON
An even more recent innovation than NG-PON2 could help to address some of the cost concerns associated with that particular standard as well as the upstream speed constraints of XG-PON2.
Known as XGS-PON, the technology is being heavily promoted by Adtran but has also received backing from other vendors, including Alcatel-Lucent, which indicated it was "supporting the standardization of XGS-PON" during the Broadband World Forum in London in October. According to Adtran's Kelly, XGS-PON proposals are currently being reviewed by the ITU.
Figure 3: XGS-PON's Promise Ronan Kelly, chief technology officer of Adtran, speaks at Light Reading's Gigabit Europe event in Munich in October.
Essentially, XGS-PON aims to reduce the costs associated with NG-PON2 by replacing the "tunable lasers" that are used in ONTs with fixed wavelengths. "With NG-PON2, you can overlay four and in the future eight wavelengths on to one PON and deploy an ONT with a tunable laser that is remotely programmed to join the appropriate wavelength," explains Kelly. "That's a very attractive system but it creates a challenge because the cost of the tunable lasers in the ONT is prohibitive."
By using fixed wavelengths, as with XG-PON1, the emerging XGS-PON technology would be able to eliminate the problem of high component costs while also delivering a symmetric 10Gbit/s service to customers -- or so the thinking goes. "With this approach we can deal with the immediate shortcomings of existing PON systems so they're future proof for another five to ten years," says Kelly.
The rollout of gigabit broadband access networks is spreading. Find out what's happening where in our dedicated Gigabit Cities content channel here on Light Reading.
Innovation in the tunable lasers industry should, of course, eventually drive down component costs to a level that makes NG-PON2 more affordable. In the meantime, XGS-PON might secure backing from service providers facing competitive challenges from the cable community, even as others remain singularly committed to NG-PON2. "Some are religiously aligned to NG-PON2 and believe if they can force the industry in that direction that can drive down the cost of tunable lasers," says Kelly. "But others feel they cannot wait."
As summed up by Calix, a PON rival to Adtran based in California, XGS-PON and other fixed wavelength technologies (XG-PON1) lack the flexibility of NG-PON2 but will be available sooner. With XGS-PON standardization expected in the coming months, next year could be a busy time for the purveyors of the latest PON design. (See Calix Enters NG-PON2 Race.)
— Iain Morris, , News Editor, Light Reading
International Editor, Light Reading
Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).
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