ViewsLetter(SM) on Provisioning

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  Flanagan Consulting         

 Network Analysts and Consultants
                                      "We Have the Experience"
ViewsLetter on Provisioning        15 May 2004            #38
A fortnightly look at provisioning automation--chips to business layer.


    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.

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

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.

                 (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

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.


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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      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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-- 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. 
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 Updated: 17 July 2004 2003

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