FEBRUARY 7, 2008 -- The number of households with fiber-optic network connections will grow by nearly 43% worldwide in 2008, according to Heavy Reading's new FTTH Worldwide Technology Update & Market Forecast. Heavy Reading analysts predict connections will continue to grow at rates above 30% annually through 2012, when the number of fiber-connected households will reach nearly 90 million globally.
"The transition to FTTH is now well underway in many countries, including Denmark, France, Hong Kong, Japan, Korea, Sweden, Taiwan, and the U.S.," notes Graham Finnie, chief analyst with Heavy Reading and author of the report. "Over the next five years, we expect most other developed countries to join that list, and fiber will also have a significant impact in relatively less developed telecom markets, including India, Russia, and the Middle East."
Although the future clearly points toward fiber replacing copper as the conduit into customer homes, there is plenty of uncertainty surrounding which network operators and technology suppliers will lead the transition, Finnie says. "On the telco side, our five-year scenario points to a market that is increasingly dominated by incumbent telco investment. But there is plenty of room for other types of operators, including utilities, municipalities, CLECs, real-estate developers, and others," he explains. "On the vendor side, it is already clear that the winners and losers will not necessarily be the same as those that dominated the DSL market -- but again the picture is complicated, in particular by a likely upswing in M&A activity as FTTH deployment grows and smaller vendors are snapped up by the majors."
Key findings of FTTH Worldwide Technology Update & Market Forecast include the following:
- The total number of fiber-connected homes will grow from about 20 million at the end of 2007 to 89 million at the end of 2012, representing 5 percent of all households worldwide. This growth will be dominated by deployment in Asia, where the number of connected households will grow to almost 54 million by the end of 2012. About 17 million will be connected in the Americas, with the majority in the U.S., while about 18 million homes will be connected in Europe, the Middle East, and Africa (EMEA).
- GPON technology will dominate FTTH deployments in the U.S., since it is now certain to be used by the major incumbent telcos as well as by many independent telcos. Active Ethernet has some limited support in the U.S., but it will remain a minority technology, taking a declining share of the overall market.
- In Europe, initial rollout has been dominated by municipal and utility builders, most of which are using Active Ethernet. Active Ethernet will continue to take the largest share of the European market for several more years. While the entry of incumbent telcos will gradually shift the market toward GPON, just as it has in the U.S., Active Ethernet will remain important throughout the forecast period.
- As bandwidth demands will continue to increase relentlessly, PON supporters and builders need to develop a next-generation PON based on 10-Gbit/sec Ethernet or WDM within the next five years. In the absence of successful development, the market could drift toward active optical networking approaches. However, the signs indicate that next-generation PONs will be available commercially from around 2011, extending PON deployment well out into the second decade of the century. WDM PONs look like the most probable winner in this transition.
FTTH Worldwide Technology Update & Market Forecast costs $3,995 and is published in PDF format. The price includes an enterprise license covering all of the employees at the purchaser's company.
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