First time look at PON equipment deployment ratios reveals surprising results

MELBOURNE, AUSTRALIA: For the first time, a research firm has analyzed the shipment data for customer premises equipment (ONUs/ONTs) versus central office equipment (OLTs) for FTTx PON networks on a worldwide basis and for selected countries. The analysis showed low ratios when compared to the theoretical split ratios of 32 or 64 ONUs /ONTs to OLT (optical line terminal), finds Ovum. In addition, the ratios have declined significantly since 2007.

In a new report, the independent telecoms analyst states that, while the ratios for Japan, Korea and China are below the theoretical split ratios, these three countries have shown different equipment shipment ratio patterns. The underlying reasons include the stage of FTTx network deployment, the bandwidth per subscriber goals set by service providers and the ratio of FTTH versus FTTB.

Julie Kunstler, Ovum principal analyst and co-author of the report, commented: “It is important to compare shipment ratios with FTTx (fiber-to-the-x) subscriber data to understand network utilization. While a single ONU can support many FTTB (fiber-to-the-building) subscribers, the bandwidth per subscriber may become very low. Therefore, a country may have very low shipment ratios due to a high rate of FTTB subscribers and the service provider’s desire to keep bandwidth per subscriber at a reasonably high level.”

Using historical shipment ratios, Ovum forecasts future shipment ratios along with subscriber growth forecasts. “Japan has room on its FTTx networks as more OLTs have been shipped than are needed to support the existing and forecasted FTTx subscriber base. However, service providers may be choosing to provide more bandwidth per subscriber; consequently, we expect to see additional shipments of both OLTs and ONUs/ONTs, said Kunstler.

In Korea, the ratios of ONUs/ONTs to OLTs have been low and are likely to remain low due to the high ratio of FTTB to FTTH subscribers. FTTB subscribers mask the true number of subscribers supported by an OLT. The current networks do not appear to have excess capacity. Additional subscriber adds will require additional OLTs.

China’s ratios have been very low with a “blitz” focus on central office readiness. OLT shipments are expected to continue to be strong for the next several years. Shipment ratios will increase as more subscribers are brought onto the FTTx networks in the years ahead.

The varying shipment ratios give light to different deployment patterns, such as “wave,” “blitz,” and “controlled”. Japan’s ratios for instance follows a “wave” pattern, with a high ratio of 33 in 3Q2007 followed by a low of 10 in 2Q2009 to a ratio of 23 in 1Q2011. It appears to move in waves with subscriber adds followed by network build and this wave pattern will continue in the next coming years.

In China, ratios have sharply declined in the past 2 years, from a high of 21 in 4Q08 to an average of less than 4 in 1Q2011, and low ratios are likely to continue in the next several years. The “controlled” pattern applies to Verizon, where the ratios have increased significantly as Verizon focuses on subscriber adds to existing service areas.