matthEW peach
equipment and FTTx analysts
broadband, according to “2015 Digital Agenda Scoreboard”, published this summer by the equipment sales over 2014, with FTTx optics sales expected to reach “a new record level”
Global 2.5G Gigabit Passive Optical Network (GPON) spending will remain above $4 billion mark in 2015
$7.8bn for the full-year of 2015, that total would be well above historical years’ performances and would show operators’ continued commitment to providing premium fixed broadband services.” IHS reports that in North America, incumbents, utilities and municipalities “are feeling that FTTH and gigabit services are giving them a chance to compete against established cable companies”, which are limited to asymmetric residential services. The competitive landscape has also heated up in Latin America after years of consolidation and regulatory restrictions; cable operators and telcos in that region are now investing after years of underinvestment. Ovum forecasts FTTx optics to exceed $1bn in 2015 According to a third market forecast published mid-2015, this time by London-based analyst Ovum, sales of FTTx optics and associated equipment are expected to reach “a new record level” in 2015, following a record- breaking 2014. The report forecasts that global FTTx optical components revenue will exceed $1bn this year, up from $953m in 2014. Next year is set to remain strong, with forecast revenue of $985m. Demand for PON equipment – both OLTs and ONTs – is driving the FTTx optics market to record levels.
now available to 18.7% of European households. Baltic countries traditionally lead in availability of FTTP services; in 2014 Lithuania and Latvia remained the two countries with the highest FTTP coverage, with homes passed by FTTP reaching nearly 95% of households in Lithuania and 83.2% in Latvia. However, the strongest growth in FTTP coverage compared to 2013 was recorded in Portugal and Spain, where FTTP coverage increased by 16.1% and 22.1% respectively, reaching 65.8 percent of Portuguese and 44.8 percent of Spanish homes. 2015 sees 14% lift for broadband equipment sales The global broadband aggregation equipment market, including DSL, PON and Ethernet FTTH, totalled $2.1bn in the first quarter of 2015, which represents a 5% sequential drop, but a 14% gain year on year, driven by GPON and VDSL deployments, according to another report from analyst IHS. Jeff Heynen, research director for broadband access at IHS, commented, “Broadband aggregation equipment spending went above $2 billion in each of the last three quarters, so there was bound to be some slowdown to start this year. Although we expect to see spending to drop to around
$5 $4 $3 $2 $1 $0
2013
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© IHS Infonetics PON, FTTH, and DSL Aggregation Equipment: Quarterly Market Share, Size and Forecasts; May 2015
The largest potential downside to the forecast could come from a slowdown in FTTx deployments by the Chinese operators. China is the single largest consumer of PON optics in the world and any slowdown would negatively impact the forecast. However, Ovum believes that China’s newest operator entrant into FTTx, China Mobile, is well positioned to deploy an FTTx network, bring existing mobile customers onto its new wireline broadband network, and offer additional services. “This strong outlook benefits Japanese optical subcomponent vendors such as laser and lens manufacturers. Meanwhile, the wireline broadband FTTx market upswing is having a positive impact on component and equipment vendors,” concluded Kunstler.
Julie Kunstler, principal analyst in Ovum’s intelligent networks and components team and author of the report, commented, “Numerous positive factors are driving the FTTx optics market to new levels, including FTTH network deployments by China Mobile and the continued network builds by China Telecom and China Unicom.” Other positive trends contributing to the strong growth are FTTx network deployments by North American MSOs, Google Fiber’s expansion plan, US telco deployment plans, European deployment plans, continued deployments in the Middle East, small deployments in South and Central America and Africa, and the movement toward FTTP or FTTH, which both require more PON ONT optics.
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