Washington DC / Paris

Fiber Access: the Ultra Broadband End Game

Erik M. Keith, Principal Analyst, Fixed Access Infrastructure

17-18 November, 2010

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Agenda

FTTP Service and Market Drivers

FTTP Technologies

Reality Check: Mass Market Impediments to FTTP

Current Pre-fiber Options and Enabling Technologies

Cable HFC

Telco FTTx

FTTP Market Contenders: Competitive Analysis

Summary & Conclusions

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Washington DC / Paris

FTTP Service and Market Drivers

Video, Video and More Video

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FTTP Service and Market Drivers

Video, Video, and More Video Ever-increasing Downstream BW Demand, Video Driven

HD replacing SD

Increasing Unicast/OTT/VoD Traffic (e.g., home-to-home HD Tele-

presence)

“Ubiquitous” TV

The Data-centric Perspective “Exa(byte) Flood” - By 2011, monthly Internet traffic in N. America alone

will exceed 7.8 Exabytes; global figures for 2011 will reach ~24 Exabytes

Also by 2011: 3m Terabytes of mobile access network subscriber traffic

(voice, data, TV/video ~even), >250,000 Petabytes of fixed access network

subscriber traffic (60% TV/video, 35% data, 5% voice)

OpEx Gains

Consolidation of fixed/wireless networks

Mobile Backhaul, esp. LTE will require fiber

4

5

5

Downstream Bandwidth Requirements per Home

1

10

100

1000

10000

100000

2010 2020 2030

Low

Medium

High

23

53

113

558

1,398

2,2273,118

8,892

28,799

Mbps

Mbps

Mbps

Mbps

Mbps

Mbps

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Evolving Television/Video Bandwidth Requirements

Bandwidth Needed to Receive One

TV Stream/Channel Over the Next ~20 Years

2D Standard-Definition TV 2 Mbps

2D HDTV 10 Mbps

2D Super (ITU J.601) 50 Mbps

3D Standard-Definition TV 126 Mbps

2D Ultra HD (ITU J.601) 200 Mbps

3D HDTV 280 Mbps

3D Super 796 Mbps

3D Ultra 2.571 Gbps

Washington DC / Paris

Active, Passive, and the Evolutionary Roadmap

FTTP Technologies

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The Full-Fiber Access Universe: Ethernet FTTP

Active or Point-to-Point (P2P) Ethernet

Positives:

– Symmetric connection to each subscriber

– 10/100 FE or 1 Gbps (GigE) right now

– More “Future Proof” than passive

– No oversubscription of end users

Concerns:

– Cost!

– Fiber management, esp. in mass market scenarios

Passive Optical Networking (PON)

Positives:

– More cost-effective than AE/P2P Ethernet FTTP

– Fiber Management

Concerns:

– Potential oversubscription is closer than with AE/P2P

– Is current-generation PON already outdated?

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Current and Future PON Technologies

Gigabit PON (GPON) – ITU Standard

Verizon FiOS: BPON+GPON, already trialing XG-PON

Ethernet PON (EPON) – IEEE Standard

Japan, S. Korea, China

10G EPON

Already Standardized in 2009

10G GPON = XG-PON

Standard(s) Pending

NGOA projects

Tellabs, Nokia Siemens Networks

SARDANA = Scalable Advanced Ring-based passive Dense Access Network Architecture

PIEMAN = Photonic Integrated Extended Metro and Access Network

WDM-PON

Pioneers: Corecess, LG-Ericsson, ADVA Optical Networking

The Big Three

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CapEx, Regulatory Hurdles and Other Barriers

Reality Check:

Mass Market Impediments to FTTP

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So, Why Not Deploy FTTP Universally, Right Now?

Massive CapEx

FTTP costs 2x to 5x higher than existing plant

Regulatory Issues

European Union LLU

Workaround (?): France Telecom RF trial

Which FTTP Technology?

Active/Passive?

XG-PON and/or WDM-PON?

Strong Near-term Alternatives

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Washington DC / Paris

Telco and Cable Operator Alternatives

Current Pre-FTTP Options and

Enabling Technologies

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Cable HFC Enabling Technologies

Cable Head-End Evolution: Higher-density d/s & u/s CMTS

blades, I-CMTS, M-CMTS

DOCSIS 3.0 Channel Bonding

Switched Digital Video (SDV)

Compression (H.264), aka MPEG-4

Increased RF Spectrum (860 MHz up to/over 1 GHz)

Deeper Last Amplifiers

Radio Frequency over Glass (RFoG)

Converged Multiservice Access Platform (CMAP)

Last but not Least: Node Splits

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Node Split Gains, Progression of Bandwidth and QAMs

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Source: Motorola

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Telco FTTx Enabling Technologies

What Distinguishes FTTx from FTTP?

FTTx encompasses both FTTP/H and fiber-fed DSL

DSL Vectoring (G.vector) and Bonding

Phantom Mode

Super MIMO

Dynamic Spectrum Management (DSM) L2, L3

Artificial and Virtual Noise

DSL Chipsets

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Washington DC / Paris

A Competitive Landscape Analysis

FTTP Market Contenders

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FTTP Market Contenders: Global Snapshot

Vendor GigE AE/P2P GPON EPON Comments

Adtran √ √ No N.Am.-centric

Alcatel-Lucent √ √ China only #2 FTTP WW

Calix √ √ No N.Am.-centric

Cisco √ No No #1 Ethernet

ECI Telecom √ √ No BT Openreach

Ericsson √ √ China only Top 5 GPON

Huawei √ √ √ #1 FTTP WW

Iskratel √ No No Europe-centric

Keymile √ No No Europe-centric

Motorola √ √ No Top 3 GPON

PacketFront √ √ No Receivership

Zhone √ √ No Top 5 GPON

ZTE √ √ √ Top 3 WW

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FTTP Market Contenders: PON Roadmap Evolution

Vendor 10G EPON XG-PON WDM-PON Comments

ADVA Optical No No G.A. Customers?

Alcatel-Lucent No Verizon trial Not public VZ XG-PON2

Corecess √ No √ Deployed

Ericsson No Lab trial (LG-Ericsson) Strong upside

Huawei √ Verizon trial Trials VZ XG-PON1

LG-Ericsson No No G.A. Deployed

Motorola No Verizon trial Not public VZ XG-PON1

NSN (via Dasan) (via Dasan) NGOA R&D Waiting…

Tellabs No No SARDANA Waiting…

ZTE √ √ Trials Strong overall

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Other Notable FTTP Market Contenders and Issues

APAC the Epicenter of EPON

Japan and Korea dominated by home market vendors

– Fujitsu, Hitachi, Mitsubishi, NEC, Sumitomo

– Dasan, Corecess

China similar, but with some notable traction by others

Vendor Consolidation Not Over: Vulnerable Vendors

PacketFront

Allied Telesis

Enablence

Telco Systems

UTStarcom

New Kids on the Block

Alphion (India)

FiberHome (China)

ZyXEL (Taiwan)

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Summary and Conclusions: Points of Light

Evolving DSL and cable HFC technologies still very strong

options for operators

Kabel Deutschland 1 Gbps trial highlights HFC potential

Fiber-fed DSL still a massive market thanks to enablers

GPON, EPON will gain traction, with GPON steadily gaining

ground on EPON

XG-PON, once standardized, AE/P2P Ethernet FTTP also make

gains in key geographies

WDM-PON coming first for Backhaul, but not for mass market

FTTH until at least 2014-2015

Recommendation: RF Video over Fiber a very attractive option

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For more information, please contact:

Erik M. Keith

Principal Analyst, Fixed Access Infrastructure

+1.703.788.3725

ekeith@www.currentanalysis.com

Thank You

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