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1 The Webinar Will Begin Shortly Frequently Asked Questions When Will the Webinar Begin? The Webinar will begin at the top of the hour. What Should I be hearing right now? You should currently hear hold music. Is there a dial-in for audio? Audio broadcasts directly through your PC there is no call-in available for the Webinar. If you experience trouble using the audio stream, WebEx recommends closing all of your browser windows, ensuring that your sounds is on and volume is up, then rejoin the Webinar. What is the difference between Day 1 and Day 2 of the event? The event is the same on both days. Current Analysis provides two days of each online event to ensure attendees in many time zones will have the ability to attend. Will the slides/replay be made available? A link to the presentation and replay of the Webinar will be distributed to all registered attendees via . Join the conversation on Twitter at #CAWeb 1
2 EPON Market Dynamics: The Fiber Access Landscape, Global Trends and Evolving Opportunities August 2012 Presented by: Erik M. Keith Principal Analyst, Fixed Access Infrastructure Ron Westfall Research Director, Service Provider Infrastructure Washington, DC / London / Paris 2
3 Agenda Current and Evolving Fiber Access Market Landscape Service and Market Drivers for Fiber Access How is EPON Different from other FTTH Technologies? EPON s Avenue of Opportunity: North America EPON Market Contenders: Competitive Analysis Summary and Conclusions 3
4 EPON Market Dynamics Current and Evolving Fiber Access Market Landscape 4
5 Active versus Passive FTTH Passive Optical Networking (PON) Benefits: Point-to-multipoint architecture is more cost-effective than AE/P2P Ethernet FTTP Fiber Management Challenges: Potential for oversubscription with very high split ratios Long-term scalability for mass market deployments Active or Point-to-Point (P2P) Ethernet FTTH Benefits: P2P architecture means dedicated fiber to each subscriber 10/100 FE or 1 Gbps (GigE) symmetric service, right now Claimed to be more Future Proof than PON No oversubscription of end users Challenges: Cost! Fiber management, esp. in mass market scenarios 5
6 PON-dering the Passive Options Gigabit PON (GPON) ITU-T G.984 and FSAN standards Ethernet PON (EPON), aka Gigabit EPON (GEPON) IEEE standards 10G EPON Standardized in 2009, some commercial shipments 10G GPON (XG-PON1 and XG-PON2) ITU-T G.987 NGOA and WDM-PON Standard(s) Pending 6
7 Fiber Access Standards and Evolutionary Paths FTTH Technology Speeds per OLT Port EPON/GEPON 1.25G symmetric; 2.5G/1G Next Step Forward Future 10G EPON: 10G/1.25G and 10G symmetric GPON 2.5G/1.25G 10G GPON (XG-PON 1,2): 10G/2.5G; 10G symmetric P2P Ethernet 10/100 Mbps symmetric 1000 Mbps (1G) symmetric 40G or 100G EPON? 40G, 100G GPON WDM-PON 10G, 40G, 100G? 7
8 EPON Market Dynamics Service Drivers for Fiber Access 8
9 Service and Market Drivers for Fiber Access Video Evolution towards Ubiquitous 1080p - HD replacement of SD Internet video doubled in 2011, HD VoD surpassed SD by E2011, VoD will triple by 2016 By 2016, HD Internet video will comprise 79 percent of VoD traffic 4k, 8k (Ultra-HD) resolutions Data-Centric Perspective Global IP traffic has increased 8x in last 5 years and will increase 3x in next 5 years Zettabyte Era: Global IP traffic will surpass 1.3 zettabytes by 2016 Capital and Operational Efficiency Gains Limitations of telco copper and cable HFC networks present increasing challenges Wireline networks ultimately support most wireless services Mobile Backhaul, esp. LTE will require fiber 9
10 Downstream Bandwidth Requirements per Home, Mbps Low Medium High
11 2, 4, 6, 8 Ultra-HD, We Will Appreciate 11
12 EPON Market Dynamics How is EPON Different from other FTTH Technologies? 12
13 EPON: Distinguishing Factors Most Widely Deployed Fiber Access Technology Worldwide Japan pioneered mass market fiber via government mandate; EPON/GEPON was the technology of choice South Korea followed the Japanese model China the single largest EPON, fiber/fixed access market worldwide EPON time-to-market well ahead of GPON APAC directives catalyzed product R&D and G.A. 3-year head start for EPON in mass market applications Rumors of EPON s Demise Greatly Exaggerated When GPON price points equal EPON Big Three in China starting transition toward GPON, but EPON still pervasive EPON gaining interest from US Cable operators 13
14 EPON Vendors: China, Japan and South Korea Dominate 14
15 EPON Market Dynamics EPON s Avenue of Opportunity: North America 15
16 EPON Opportunities Outside of APAC North America: the Ultimate Market for EPON? Highest mass market ARPU worldwide for cable/broadband/triple play Cable garners ~60% of North American subscribers Comcast: million cable broadband subs Time-Warner: million subs Cox (~4m), Charter (~4m), and Cablevision (~3m) also sizeable subscriber bases Verizon (~5m FiOS Internet subs) pales by comparison DOCSIS Provisioning of EPON and EPON Protocol over Coax (EPoC) North American vendors already invested RFoG sets the stage for DPoE CableLabs already facilitating standard Issues Cable/HFC has many other network enhancement options before RFoG/DPoE First iteration of DPoE is data-only U.S. government may block Huawei, ZTE from MSO market 16
17 EPON in North America: Snapshot of Current Services Cable MSOs Already Deploying EPON Metro Ethernet services, managed IP routed networks Mobile backhaul and WiFi network aggregation Convergence of business and mobile BH services Extremely limited residential EPON to date Greenfield deployments dependent on housing market Telcos Not Interested, Generally Advanced DSL, AE/P2P Ethernet and GPON first Supplementing wireline with wireless where feasible Public Utilities and Municipalities Aurora Networks has 11 Public customers using EPON CTDI (with Alloptic assets) also solid in Public EPON sector 17
18 Vendors Targeting North American Cable MSO Market 18
19 EPON Market Dynamics EPON Market Contenders: Competitive Analysis 19
20 EPON Market Competitive Analysis: APAC and Global Market Vendor (G)EPON Comments Alcatel-Lucent China only #2 WW FTTH/GPON, minimal EPON Corecess Korea, APAC Behind most rivals, outside Korea Dasan Korea, APAC Behind most rivals, outside Korea FiberHome Top 4 in China Well behind Top Chinese rivals Fujitsu #2 Japan Strong in Japan, APAC Huawei #2 China/WW WW GPON/FTTH leader Mitsubishi #1 Japan Strong in Japan, APAC Oki-Fujikura #3 Japan Strong in Japan, limited int l Sumitomo Top 5 Japan Key wins: NTT, KDDI, CHT, PCCW UTStarcom 1st-to-market In survival mode, APAC focus ZTE #1 China/WW Also Claims #1 in 10G EPON 20
21 EPON Market Competitive Analysis: North American Opportunity Vendor Technology Comments ARRIS CMTS, RFoG, DPoE Top contender w/cisco for WW cable infrastructure gear Aurora Networks EPON, RFOG, DPoE Acquired Trident7 OLT from Enablence; small player (utilities/munis) Cisco CMTS, DPoE, AE/P2P Ethernet FTTH Tier 1 cable infrastructure market supplier, #1 WW in AE/P2P Ethernet FTTH CTDI (Alloptic) EPON, RFoG, DPoE Acquired Edge2000 product from Alloptic; another small player Hitachi EPON, RFoG, DPoE Acquired Salira Systems EPON and DPoE; RFoG developed by US division Huawei EPON, DPoE #1 WW FTTH, but US govt may impede Motorola CMTS, RFoG, DPoE Sale by Google limits operator interest Sumitomo EPON, DPoE Product well-poised for US DPoE ZTE EPON, DPoE #3 WW FTTH but US govt hurdle 21
22 EPON Market Dynamics Summary and Conclusions 22
23 EPON Market Dynamics: Summary and Conclusions EPON Will Remain Strong in China, Japan, and APAC But GPON already making inroads, as will 10G xpon (both E and G) AE/P2P Ethernet FTTH also gains traction, complementary to PON WDM-PON still several years away North American Cable Market High-Potential But Slow to Transition Numerous technologies that can/will enable cable operators to leverage HFC for another 5 to 10 years Examples: 1 GHz spectrum, Service Group Reductions, SDV, Transition to all-ip (CCAP) 23
24 EPON Market Dynamics: Summary and Conclusions Current Analysis introduces EPON Product Assessment class Evaluations of the most widely-deployed EPON OLT platforms In-depth analyses of EPON OLTs based on buying criteria utilized by operators Includes OLTs from the following vendors: 24
25 Thank You for Your Time. Questions? Erik M. Keith Principal Analyst, Fixed Access Infrastructure Ron Westfall Research Director, Service Provider Infrastructure Current Analysis helps clients differentiate themselves in the marketplace and win more business by providing continuous, in-depth competitive intelligence. We enable sales teams, marketing professionals, product managers, and executives to anticipate and take action on market opportunities and competitor threats. 25
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