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Archive
Flanagan Consulting
Network Analysts and Consultants
"We Have the Experience"
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ViewsLetter on Provisioning
15 May
2004
#38
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A fortnightly look at provisioning automation--chips to business layer.
PON MARKET ESTIMATE
AND MAJOR PLAYERS
By V. Kaminsky, Contributing Editor
In this issue of ViewsLetter we continue the series dedicated to the
passive optical network (PON), its development, and recent
utilization. In the previous three installments we discussed the
basics of PON technologies, PON standards, and directions.
In this paper, we present PON marketing issues and refer to a survey of
the major industry players, available now.
Why this extended coverage of one topic? We envision that in a
couple of years PON deployment will compete with CATV and other
networks to distribute voice, video, and high-speed data. As a
new generation of local loop technology, PONs should make a major
advance in provisioning automation. The purpose of this article
is not to analyze detailed specifics of the PON market, but rather to
give a perception of that market.
PON MARKET SEGMENTATION
PONs can be divided into the following subclasses:
--FTTH, Fiber-to-the-Home
--FTTB, Fiber-to-the-Business.
Each of these categories can be further subdivided into:
--FTTC, Fiber-to-the-Curb
--FTTP, Fiber-to-the-Premises
--FTTB, Fiber-to-the-Building
--Other.
PON networks are also characterized by different technologies, as mentioned in earlier issues.
Preferences for different forms of PONs are regional. It appears
that different countries express different interests in the PON
subcategories. For example, in the US 65-75% of deployments are
expected to start in the business area (especially for EPON, Ethernet
over fiber). The rest of the world shows almost equal percentage
of penetration by PONs in the business and residential sectors at the
beginning of the market growth cycle.
Given the above scenarios, our estimates for the PON market are
presented below. We used both conservative and optimistic
estimates for this market forecast, with the average of the two plotted
as well. For our purposes the main interest was in the number of
premises passed.
Table 1 illustrates an estimate for PON equipment sales globally, by year.
TABLE 1: PON EQUIPMENT SALES
(millions of US$)
Year:
2002 2003 2004 2005
2006 2007
Conservative: $100 $230 $750 $1100 $1400 $1680
Optimistic: 180
400 1100 1600
2300 2700
Average:
140 315 925
1350 1850 2190
Figure 2 illustrates our estimate for the number of PON premises passed, over the same period.
TABLE 2: PREMISES PASSED BY PON
(thousands, globally)
Year:
2002 2003 2004 2005
2006 2007
Conservative: 133 307 1000 1467 1867 2240
Optimistic: 240
533 1467 2133
3067 3600
Average: 187
420 1233 1800
2467 2920
For a graphic plots, go to the Archive at www.viewsletter.com.
Before moving forward, we will provide a sensitivity analysis for our PON market estimate.
For a sanity check on these forecasts, we collected the publicly
available information concerning similar studies. We used the
Internet as well as published articles and reports. Where
necessary, we have used statistical analysis to fill data gaps.
The biggest expectations and the most of uncertainty are in connection
with the joint PON RFP from the Regional Phone Companies in the US and
KTT's deployment in Japan. The RFP calls for huge PON deployments
starting in the 2005-2006 time frame, with preparation work beginning
last year. The RFP has been issued, and responses are being
collected, but mostly due to the unstable regulatory climate there is
some probability that RBOCs' plans can be delayed or even diverted.
Our results compared with available data show a small dispersion of
about 10-20%. For example, NTT reported that it has passed 55,000
premises already; according to Render Vanderslice &
Associates, in North America only 183,000 premises are passed (2003
data). According to data released during the 2003/2004 FTTH
conference, premises passed can reach 1.4 M in 2004.
INDUSTRY PLAYERS
PON vendors manufacture active parts of the network. They also
often play the role of system integrator or they employ a vendor as a
subcontractor. Allied Telesyn and Optical Solutions seem to lead
the PON market in THE US. Other successful players are Alcatel,
Alloptic, and FlexLight. These companies share more that 50% of
the PON market.
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PON MARKET REVIEW
For a closer look at more than two dozen
PON companies, you are invited to purchase the full report, "PON
Industry Players--2004" available from Flanagan Consulting.
Offered on paper and a PDF file via email, this 25-page document
describes each company's products, shows which market segments they
participate in, and provides current contact information. Either
form is priced at US$60.00, payable by check to Flanagan Consulting,
45472 Holiday Dr. #3, Sterling, VA 20166.
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Flanagan Consulting We Have The Experience
-- Call us for a vendor-neutral network architecture and strategy for
expansion or convergence. We know voice AND data--and how to
avoid expensive bear traps along the migration path.
--Working on product positioning or a marketing message for
telecom? Yes, we've done that--for hardware products and
carrier services.
-- Need an Expert Witness? Associates at Flanagan Consulting have
aided in many legal proceedings involving telecom intellectual property
and technology.
--For RFP preparation, bid analysis, proposal evaluation--call us.
"We Have the Experience."
-- Special thanks for supporting ViewsLetter to www.webtorials.com,
your best source for communications tutorials and white papers.
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"Flanagan Consulting" and "ViewsLetter" are
Service Marks of W. A. Flanagan, Inc.
Updated: 17 July 2004 2003
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