Overview
This report introduces the value chain concept in relationship with PON development. The report structure allows a detailed analysis of PON technologies and markets as well as current situation with PON component and subsystem industries.
We evaluated specifics of B-PON, G-PON, E-PON, showed their similarities and differences and provided PON market data. The PON value chain analysis showed that the component layer is still suffering from the industrys downturn with poor performance and margins. Subsystems vendors, such as Alloptic, Alcatel and other are working with the higher gross and operating margins.
The PON industry development is geographic - specific, and currently Asia and the U.S.
are the leaders. Customers perception and PON market drivers are different in these geographic segments, and this affects the fee structure and broadband access development in general.
Based on the analysis of the PON industry, this report projects a rapid growth of PON developments around the globe. The dominating forces are and will be RBOCs in the U.S. and NTT in Japan, though municipalities in the U.S. and Europe are also very involved in PON projects.
Table of Contents
1.0 Introduction 9
- 1.1 Dilemma 9
- 1.2 PON Comes to the Picture 9
- 1.3 Triple Play 10
- 1.4 A Little Bit of History 10
- 1.5 Value Chain 11
- 1.6 PON Introduction 12
- 1.7 Scope 13
- 1.8 Research Methodology 13
- 1.9 Target Audience 14
2.0 Technologies 15
- 2.1 The PON Proposition 15
- 2.2 PON Concept and Technologies 15
- 2.3 Standards 17
- 2.4 PON Classification 19
- 2.5 A-PON 20
- 2.5.1 General 20
- 2.5.2 Layers 21
- 2.5.3 Frame Structure 22
- 2.5.4 Ranging 23
- 2.6 B-PON 24
- 2.6.1 Wavelength Allocation 24
- 2.6.2 Services 25
- 2.6.3 Split Ratio 25
- 2.7 G-PON 25
- 2.7.1 General 26
- 2.7.2 Elements 27
- 2.7.2.1 Optical Line Termination (OLT) 27
- 2.7.2.2 Optical Network Unit (ONU) 28
- 2.7.2.3 Optical Distribution Network (ODN) 29
- 2.8 Protection 29
- 2.9 Interoperability between G-PON and A/B-PON 30
- 2.10 Ethernet PON (E-PON) 30
- 2.10.1 EFM-General 30
- 2.10.2 Rates 32
- 2.10.3 Multi-Point Control Protocol (MPCP) 32
- 2.10.3.1 Topology Emulation Sub-layer 33
- 2.10.4 Physical Layer 34
- 2.10.5 OAM 35
- 2.10.6 IP Transport Differences 36
- 2.10.7 Flows 37
- 2.10.8 Framing 38
- 2.11 Dynamic Bandwidth Assignment 39
- 2.11.1 Traffic Container (T-Cont) 41
- 2.12 Comparison: FSAN vs. E-PON 42
- 2.12.1 E-PON Challenges 42
- 2.12.2 Parameters 43
- 2.12.3 Formats 44
- 2.12.4 Comparison 44
- 2.13 Passive vs. Active Networks 46
- 2.14 Competition 48
- 2.14.1 xDSL and PON: Different Strategies - Different Providers 48
- 2.14.2 Cable Modem 50
- 2.14.2.1 Base 50
- 2.14.2.2 Scope 51
- 2.14.2.3 Pros and Cons 52
- 2.14.3 Wireless 52
- 2.15 PON Benefits 53
- 2.16 PON Services 54
- 2.16.1 Voice 54
- 2.16.2 Data 54
- 2.16.3 Video 54
- 2.16.4 Set 55
- 2.16.5 Strategy 56
- 2.17 Summary 56
3.0 Telecom Value Chain 59
- 3.1 General 59
- 3.2 Model: Optical Telecom Industry Value Chain 59
- 3.2.1 Features 60
- 3.2.2 Forces 61
- 3.2.3 Example 61
- 3.3 Optical Telecom Value Chain and Major Development Trends 62
- 3.3.1 What to Expect 63
- 3.3.2 Slow Recovery 64
4.0 PON Value Chain: Components 67
- 4.1 General 67
- 4.2 Macro Developments 67
- 4.2.1 Private Market for Optical Components 68
- 4.2.2 Winners and Losers 69
- 4.2.3 Vendors 69
- APA Optics 69
- austriamicrosystems AG 70
- BroadLight 70
- Emcore 71
- JDS Uniphase 72
- Gould Fiber Optics 73
- Marubeni 74
- NeoPhotonics 74
- OFS 75
- Oplink 75
- Passave 76
- Vitesse 76
- 4.2.4 Component Layer and PON 77
5.0 PON Value Chain: Subsystems 79
- 5.1 General 79
- 5.2 Types 79
- 5.3 Margins 80
- 5.4 Suppliers 80
- AFC (Tellabs) 80
- ADC 81
- AFL 82
- Alcatel 83
- Allied Telesyn 85
- Alloptic 85
- Calix 86
- CEOS 87
- Ciena 88
- Conklin-Inracom 89
- ECI 90
- Entrispere 92
- Ericsson 92
- Flexlight 94
- Foxcom 95
- FreeScale (Motorola) 95
- Fujkura 96
- Hitachi 98
- Iamba 99
- Lucent 100
- Nayna 101
- Occam 103
- Optical Solutions, Inc. 104
- Optical Zonu 107
- PBN 107
- Quantum Bridge, Inc. (Motorola) 108
- Salira 109
- Sumitomo Electric 110
- Syntek 112
- Terawave 112
- TransComm Technology Systems (TTS) 113
- UTStarcom 114
- Wave7 Optics 114
- Zhone 115
6.0 PON Market 117
- 6.1 Base 117
- 6.2 PON Commercialized 117
- 6.2.1 Cost Components 120
- 6.2.1.1 OSP 120
- 6.2.1.2 Cost Reduction 121
- 6.2.1.3 Design and Cost Efficiency 122
- 6.2.1.4 Market Drivers 123
- 6.2.1 Cost Components 120
- 6.3 Forecast 123
- 6.3.1 General 124
- 6.3.2 Market Forecast 124
- 6.3.2.1 Model Assumptions 124
- 6.3.2.2 Market Estimate 124
- 6.3.2.2.1 Structure 124
- 6.3.2.2.2 Equipment 124
- 6.3.2.2.2.1 Estimate 125
- 6.3.2.2.3 Providers Revenue 127
- 6.3.2.3 Regional Differences 132
- 6.3.2.3.1 Japan 132
- 6.3.2.3.2 U.S. 135
- 6.3.2.3.3 Differences 135
- 6.3.2.3.4 Europe Samples 137
7.0 PON Deployments 138
8.0 Conclusions 140
Acronyms 142
- Figure 1: Networks Layers 10
- Figure 2: PON Reference Model 16
- Figure 3: PON Details 16
- Figure 4: PON Standardization Process 18
- Figure 5: PON Inside 20
- Figure 6; A-PON Illustration 21
- Figure 7: B-PON Enhancement (Downstream) 25
- Figure 8: G-PON Illustration 27
- Figure 9: OLT Functional Block Diagram 28
- Figure 10: ONU Functional Block Diagram 29
- Figure 11: E-PON OAM Standardization 35
- Figure 12: Downstream Flow 37
- Figure 13: Upstream Flow 38
- Figure 14: Downstream Frame 38
- Figure 15: Upstream Frame 39
- Figure 16: Active vs. PON 47
- Figure 17: Layers 57
- Figure 18: Optical Telecom Industry: Value Chain Model 60
- Figure 19: Example: Optical Value Chain 62
- Figure 20: Product Lifecycle 63
- Figure 21: Amex Telecom Index (2005-Projected) 64
- Figure 22: PON Technologies Distribution 118
- Figure 23: PON Technologies - 2010 View 119
- Figure 24: Penetration Dependence (Source: Practel, Inc., 2004) 119
- Figure 25: PON Global Market Estimate (Equipment Sales $M) 125
- Figure 26: Sales -PON Equipment Elements Proportion (2005) 126
- Figure 27: PON Market -Technology and Geography (2005) 127
- Figure 28: Equipment: Geography of Sale 127
- Figure 29: Providers Market Potentials (U.S., Estimate -Premises Passed) 128
- Figure 30: Wired Premises Projection (U.S., $000) 129
- Figure 31: U.S. PON Providers Revenue Projection (residential segment, $M) 130
- Figure 32: PON Providers Revenue (U.S., Business, $M) 130
- Figure 33: PON Asian Providers: Revenue Projection ($M) 131
- Figure 34: PON Providers Revenue Estimate: Europe ($M) 132
- Table 1: A-PON Layered Structure Illustration 22
- Table 2: G-PON Signal Rates 26
- Table 3: EFM Objectives 31
- Table 4: EFM Physical Layer 35
- Table 5: T-CONT Types 41
- Table 6: PON Characteristics 57
- Table 7: Changes in Industry Funding 65
- Table 8: Competition 66
- Table 9: Components Business Average Margins (in %); Second row - Gross Margin, Third row - Operating Margin 79
- Table 10: Subsystem Layer Margins (%); Second Row - Operating Margin, Third Row - Gross Margin 81
- Table 11: Major PON Providers 119
- Table 12: PON Service Scenarios 121
- Table 13: Broadband Access in Japan 134
