JULY 23, 2009 -- Despite the global economic slump, the number of households with FTTH connections will grow by more than 32% worldwide in 2009 and will continue to grow at rates close to 30% per year through 2013, when the number of fiber-connected households will reach nearly 130 million globally, according to a new report from market researcher Heavy Reading (search Lightwave for Heavy Reading).
"FTTH Review & Five-Year Forecast: The Road to Next-Gen PON" provides a global view of the ongoing transition to FTTH. The report analyzes the prospects for existing and new technology, focusing specifically on the likely lifetime of existing PON technologies and the prospects for their replacement or augmentation by next-generation PON technologies. It offers an overview of major FTTH projects and developments over the past year in all geographies, including North America, Asia/Pacific, and Europe, as well as discussion of major countries in each region and snapshots of many smaller countries.
The report details a five-year forecast for homes connected with fiber through 2013, breaking down market growth by region, type of technology, and type of network builder and looking at anticipated penetration rates and households connected in all major economies. It also presents a technical comparison of FTTH products from 24 leading suppliers, focusing on each company's flagship optical line terminal (OLT) product, as well as examining their offerings in related areas, plans for future development, and strengths and weaknesses.
"FTTH deployments continued to make strong progress in 2008 and early 2009, despite the economic downturn, and prospects for continued growth through 2010 look good," says Graham Finnie, chief analyst with Heavy Reading and author of the report. "Last year, more than 9 million homes were added to the FTTH total, and in 2009 we expect that total to increase by almost 9 million again, to reach 47 million homes worldwide at the end of the year."
Progress in FTTH roll-outs varies widely, creating the scenario for a significant deployment gap between regions and countries, Finnie notes. "Some countries, notably China, are making a big leap forward, while others, such as France, have seen disappointing delays to ambitious roll-out plans," he says. "These variations will also occur at the national level, creating some dilemmas for regulators and politicians. Already a 10-year gap in fiber development has opened up between fiber-heavy countries such as Japan and European nations, including Germany and the UK -- and this gap could widen."
Key findings of "FTTH Review & Five-Year Forecast: The Road to Next-Gen PON" include the following:
- The number of households connected directly to fiber will grow from about 36 million at the end of 2008 to 129 million at the end of 2013. This would represent roughly 7.8% of all households worldwide -- a compound annual growth rate of about 29%.
- Asia will continue to account for a large majority of FTTH deployments over the next five years. The number of fiber-connected households in Asia will grow to almost 85 million by the end of 2013. About 23 million will be in the Americas, with the majority in the United States; approximately 24 million homes will be connected across Europe, the Middle East, and Africa (EMEA), with very wide variations within this territory.
Most vendors report only modest impact on FTTH build-outs from the economic downturn so far. However, views are mixed: Some suppliers report business down by as much as 40% year-over-year, while others report little or no impact. The effect of the economy has been fragmentary, with build-outs by major telcos such as Verizon unaffected, but it is having a clear impact on Tier 2 U.S. telcos and incumbents in some other countries, as well as competitive telcos elsewhere. Municipal fiber deployments seem largely unaffected, and there are hopes of an upsurge in activity resulting from government stimulus programs.
Cable multiple-systems operators (MSOs) could become important providers of FTTH in the next few years. MSOs are examining a variety of approaches, and one in particular -- radio frequency over glass (RFoG) -- will likely lead to widespread cable-deployed FTTH in the next five years, according to the report. This development, however, is still at an early stage.
Because GEPON is now the technology of choice in Japan and several other leading Asian countries, it will continue to dominate global FTTH deployment over the next few years. However, says the market research firm, the future of FTTH will be strongly influenced by developments in China -- which will become by far the largest FTTH nation by the end of 2011 -- and it remains unclear whether the major Chinese telcos intend to switch from GEPON to GPON.
GPON will dominate in the US since it is being used by both the major ILECs and many independent telcos. GPON is now by far the most widely deployed FTTH technology in the US, partly because it is primarily used by telcos that want to provide triple-play services and often are using the RF capability that is part of the GPON standard.
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