10G EPON equipment ready but market demand is weak

MELBOURNE, AUSTRALIA: Despite the availability of 10G EPON components and equipment, market demand outside of China will remain low until 2013, according to Ovum.

In a new report, the independent telecoms analyst states that while components companies have been under pressure by equipment vendors and service providers to develop 10G EPON components, the momentum has slowed down.

Julie Kunstler, Ovum analyst and author of the report, commented: “The pressure worked and multiple vendors have commercial-ready 10G EPON components and testing has been carried out by service providers. However, while several provinces in China have begun deployments, 10G EPON equipment deployments will remain negligible until late 2012 in China, and 2013 for other global regions. Demand for XG-PON will also remain low, although the readiness of XG-PON components and equipment is lagging that of 10G EPON.”

According to the report, demand for 10G EPON and XG-PON has slackened for several reasons. Firstly, China’s service providers are favoring the deployment of FTTH (fiber-to-the-home) versus FTTB (fiber-to-the building) due to the operational costs of FTTB and competition around bandwidth.

Meanwhile, although the use of 10G PON for wireless backhaul traffic remains a strong market driver, commercial deployments are still few and far between. In addition, the costs of PON OLT and ONU/ONT equipment, for both GPON and EPON, have dropped significantly, widening the cost gap between 10G PON and 1G EPON and 2.5G GPON.

While Kunstler concedes that price is a hindrance, she does not believe it will remain a long-term problem. She commented: “The costs of 10G PON optics and equipment will decline rapidly once purchase orders are signed and deployments begin. A bigger problem is the lack of applications for 10G PON.

“The plan for upgrading 1G EPON FTTB MDU equipment to 10G EPON equipment was simple and straightforward, involving the same service provider and subscribers on an existing FTTx (fiber-to-the-x) network. While this application still exists, the volume of replacements will decline as some FTTB-based MDUs are moved to FTTH.”