PON SET FOR RECORD LEVELS
PON optics set for ‘record levels’
This year will break the records for sales and deployment of PON- related optics and systems reached in 2014, writes Julie Kunstler, Principal Analyst, Components and Intelligent Networks at Ovum.
include new country-wide FTTx plans in the heavily-populated countries of India, Brazil and Indonesia. New plans in these countries would provide a significant uptick to add to the units forecast and consequently to revenues. For example, a potential uptick to revenues would come from faster deployments of next- gen PON since the ASPs for next-gen PON optics are higher than those for non-next gen. While 10G PON has been slow to ramp, we are now seeing deployments of 10G PON by several cable operators in the US and by several telcos in Asia Pacific. In addition, we are seeing lab trials of TWDM PON and even initial field deployments. 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, we believe 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. Positive factors for China Mobile include: • Strong cash and bank deposits – China Mobile reported more than $74bn in cash-equivalents and bank deposits on June 30, 2014. • Large existing subscriber base – China Mobile has more than 800 million subscribers and its subscriber base is growing. This provides a large
of 2014). • FTTx network builds by many operators throughout the world such as MSOs in North America, Google Fiber, US telcos, operators in Europe, the Middle East, South and Central America and selected countries in Africa. • Bandwidth marketing craze with various CSPs moving to 1G, 2G and even 10G FTTH service offerings particularly in Japan, Hong Kong, Singapore and the US. • The movement away from FTTB to FTTP/FTTH which uses requires more ONTs and therefore more ONT optics. • The use of PON for non- residential customers and applications such as services to enterprises and small-medium-sized businesses along with support for MBH (mobile backhaul) for internal needs and/or for wholesaling. Arising from these points and data, there are several potential upsides and downsides to both unit sales and revenues. Ovum’s PON optical components forecast does not
to represent just over 12% of the total OLT transceiver market in 2020 with 10G EPON OLTs representing the largest segment within next-gen PON. The total ONT transceiver and BOSA market is forecast to exceed 71 million units sold in 2015, an increase of 18% from 2014. The ONT transceiver/ BOSA market will then decline slowly over the forecast period. NextgenONT transceivers/ BOSAs are forecast to represent just over 9% of the total ONT transceiver/ BOSA market in 2020 with 10/1 and 10/10 EPON ONTs representing the largest segment within next-gen PON. Several key themes are driving the PON optics market, according to Ovum’s analysis. The PON optical component forecast is currently strong due to a combination of the following: • Major continued deployments by China Telecom and China Unicom along with China Mobile’s entry into the FTTx market (which began in the 2nd half
JULIE KUNSTLER
P assive optical network-related optics reached record levels of installation in 2014 but those records are expected to be broken again this year as demand for PON optical components remains very strong. Ovum’s forecasts for optical line terminal OLT and ONT transceivers and BOSAs are shown in Figures 1 and 2 below. Each figure segments the market by next-gen PON, including 10G EPON, 10G GPON and TWDM PON and by non-next gen PON, including BPON, EPON and GPON. Total OLT transceiver sales are forecast to reach 6.5 million units in 2015, an increase of 19% over 2014. The OLT transceiver market will then decline slowly over the forecast period. Next-gen OLT transceivers are forecast
Total
OLTs - non 10G OLTs - 10G and TWDM
7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
2012 2013 2014 2015 2016 2017 2018 2019 2020
PON OLT transceiver forecast, 2012 – 2020. Image supplied by Ovum.
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ISSUE 5 | Q3 2015
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