NEXT-GEN MONETISATION - JULIE KUNSTLER
Scenario #4 – Adding NG- PON2 (TWDM PON) Scenario #4 adds NG-PON2 to the analysis. Some enterprise subscribers want the ability to switch to a different wavelength if the current wavelength goes down. NG-PON2 is based on tunable optics enabling wavelength switching and therefore redundancy. The GPON, XG-PON1 and XGS- PON subscriber numbers and types are kept the same as in Scenario #3. We make the assumption that NG-PON 2 will be used to support just three enterprise customers. Table 3 provides a summary of the number and types of subscribers supported by GPON, XG-PON1, XGS-PON and NG-PON2. Table 3: Scenario #4 – types and numbers of subscribers Residential subscribers 12 36 0 0 SMB subscribers 4 6 0 0 Enterprise subscribers 0 0 4 0 Enterprise subscribers - redundancy 0 0 0 3 We make the assumption that enterprise customers choosing tunable optics are willing to pay for wavelength redundancy. Consequently, the years until payback analysis for NG-PON2 depends on the comparison of increased ARPU to the increased cost of tunable optics versus the fixed optics costs of XGS-PON. Based on our assumptions, NG-PON2 takes just under three years until payback compared to slightly over three years for XGS-PON as shown in Figure 2. Conclusions Next-gen GPON enables faster payback or monetisation versus GPON based on the presented scenarios. Next-gen GPON supports more customers or higher-paying customer types, thereby leading to more revenues per PON OLT port. These revenues will more than cover the higher costs of investing in next-gen GPON optics and equipment. GPON XG- PON1 XGS- PON
use an ARPU model of $200 per month compared to $100 per month for GPON and XG- PON1 residential subscribers. As shown here in Table 1, we maintain the same types and numbers of subscribers for GPON and XG-PON1 as used in Scenario #1. We make the assumption that 20 residential customers could be offered best-efforts 10G symmetrical services using XGS-PON. Table 1: Scenario #2 – types and numbers of subscribers Residential subscribers 12 36 20 SMB subscribers 4 6 0 Enterprise subscribers 0 0 0 XGS-PON can achieve payback in approximately the same amount of time as XG- PON1 based on higher ARPU residential customers. Charging even higher ARPU for 10G symmetrical residential services or having lower XGS-PON equipment costs would improve the payback time for XGS-PON compared to XG-PON1. Scenario #3 – GPON versus XG-PON1 versus XGS-PON for enterprises Scenario #3 analyses GPON, XG-PON1 and XGS-PON but we make the assumption that XGS-PON (10G symmetrical GPON XG- PON1 XGS- PON
GPON) will be used to support enterprise subscribers or MBH services. These enterprise subscribers require around 1.5G to 2.5G symmetrical services. CSPs will typically support higher-bandwidth enterprise demand with point-to-point connections. The GPON and XG-PON1 subscriber numbers and types are kept the same as in Scenarios #1 and #2. Table 2, below, provides a summary of the number and types of subscribers supported by GPON, XG-PON1 and XGS-PON. Table 2: Scenario #3 – types and numbers of subscribers Residential subscribers 12 36 0 SMB subscribers 4 6 0 Enterprise subscribers 0 0 4 XGS-PON can achieve payback in less than four years compared to XG-PON1 with payback in less than eight years, compared to GPON, which requires more than 15 years. Although XGS-PON optics and consequently ONTs and OLT equipment are more expensive than XG-PON1 and GPON equipment, the higher ARPU from enterprise customers more than covers these higher costs. GPON XG- PON1 XGS- PON
subscribers rather than for enterprise customers given its asymmetrical design. However, there are limits to the number of residential and SMB customers that can be supported not just due to bandwidth but do to the physical locations of the customers and optical budget parameters. Summarising the step-change in numbers and 6 of each respectively, compared with the 12 and 4 supported by GPON. Capital costs aside, this clearly shows the potential ARPU advantages of investing in next-gen. As shown in Figure 1, XG- PON1 can achieve payback in less than eight years compared to GPON, which requires more than 15 years in this scenario. Scenario #2 – GPON versus XG-PON1 versus XGS-PON for residential Scenario #2 analyses GPON, XG-PON1 and XGS-PON, in which XGS-PON is used to support high-end residential customers with high downstream and upstream bandwidth requirements. The revenue per month and years until payback depend on the ARPU that could be charged for 10G symmetrical service offerings. While several CSPs are offering 10G services to residential customers, there are very few examples to examine at this time. Consequently, we of residential and SMBs supported by XGPON1 compared with conventional GPON: XGPON1 supports 36
NG- PON2
Residential
SMBs
Enterprises
Enterprises - redundancy
Years until payback 18.0 16.0 14.0 12.0 10.0
$10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0
8.0 6.0 4.0 2.0 0.0
GPON
XG-PON1
XGS-PON
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Figure 2: GPON versus XGPON1 versus XGS-PON – monthly ARPU and years until payback
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ISSUE 6 | Q1 2016
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