Get in the Gigabit Game

It seems that the time for gigabit services to take off is upon us. In this article the author explores the reasons why and the options available for providers who want to get in on the gigabit game.

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It’s exciting times for gigabit broadband. There are now around 150 gigabit broadband providers in the world and deployments are gathering pace. The U.S. leads the way: almost a third of small U.S. operators are now deploying fiber compared to just 10% in 2009, driven by the knowledge that the first operator to bring gigabit services to an area generally dominates the market. Certainly, the operators adding the most broadband subscribers in the U.S. in 2018 were the ones with the highest speed offers.

So, it seems that the time for gigabit services to take off is upon us. In this article I’ll explore the reasons why and the options available for providers who want to get in on the gigabit game.

Why gigabit, why now?

First, we need to look at why we need a gig. Households today typically have several internet-connected devices and some forecasts say that by 2020 there will be seven connected devices per person. All these devices consume bandwidth and most of it is from video – which is becoming a mainstream in communication. (Why read a blog when you can watch a vlog? Why read a recipe from a cookbook when you can watch a how-to video from the world’s best chefs?) TV screens continue to increase in size and resolution (4K to 8K). Families simultaneously stream different content to multiple devices. They catch up with friends and relatives through HD video conferencing, meaning high upstream as well as downstream connectivity is needed. This increasing consumption of video is not just a consumer phenomenon. Industry is dependent on video to manage everything from production lines to emergency situations. As bandwidth connectivity becomes less of a restraint, companies are switching to 4K video streams to provide more value to their operations.

While there are other usage trends, like online gaming and cloud services, it’s the unstoppable force of video that will make gigabit services the rule rather than the exception within the next few years.

From an operator’s perspective, there are some compelling reasons to go gigabit early to meet this demand. The first, as already mentioned, is market position. No one can doubt the buzz created by Google Fiber’s arrival in the U.S., and it seems that the first operators to provide gigabit broadband in a service area tend to dominate. This is why gigabit broadband is often favored by the disruptor or new entrant who can quickly gain market share if the incumbent is still on lower-tier DSL services.

That’s also why deploying gigabit services is a good strategy to deter competitors. This is particularly favored by smaller operators who are often jumping straight from DSL to gigabit or even multi-gigabit services. To be successful with this strategy operators need to consider coverage, as any underserved portion of a service area leaves a weak spot for competitors to exploit. For this reason, even operators with ambitions for full fiber are complementing their deployments in the near term with or fixed wireless access technologies to plug any coverage gaps.

Then there’s the marketing kudos of offering gigabit services. In any market, there are always the early adopters who want the shiny new toy. Having a gigabit service available in the portfolio positions the operator as a leader and differentiates from the competition. Introducing a new top-tier service also tends to have a pull-through effect on customers in lower tiers.

Finally, there are business services. Residential fiber deployments pass businesses, 90% of which are small and medium enterprises with the same bandwidth needs as residential customers. Converging business and residential services on the same infrastructure makes a lot of sense for operations, bringing efficiencies and costs savings. If the bandwidth is available, adding mobile backhaul or slicing the infrastructure so that it can be leased to third parties are other lucrative opportunities.

Choices, choices

It’s never been easier to get to a gig. Several technology options exist that can deliver gigabit services, and they’re not just limited to FTTH. While our focus here is on the end-goal of full fiber, don’t be afraid to complete coverage gaps with other technologies.

But in terms of FTTH, GPON is still the most common fixed access technology in the world today. Many operators use it to provide residential services of 1 Gbps as well as business services, mobile backhaul, and aggregation of remote FTTx micro-nodes. However, with bandwidth constrained to 2.5 Gbps downstream and 1.25 Gbps upstream, there’s an obvious limit to how many gigabit customers can be served concurrently, especially business customers with high quality of service (QoS) demands.

So the serious money is on moving to next-generation PON as quickly as possible. In fact, analysts already forecast that next-gen PON will make up the majority of deployments by 2022.

A year or two ago, we may still have been debating which flavor next-gen PON you should choose: XG-PON, XGS-PON, 10G EPON, or TWDM-PON. 10G EPON is only really getting attention in China due to the large EPON installed base. TWDM-PON (such as NG-PON2) remains very much on the radar, but it is still not at a price point that will make it suitable for massive deployments. In the meantime, XGS-PON has beaten XG-PON to become the clear next-gen favorite for the following reasons:

  1. Symmetry. XGS-PON delivers symmetrical 10G, which is crucial for opening the doors to high-ARPU business services, premium-tier residential, and mobile transport opportunities. These are all viable near-term business opportunities with a next-generation PON network.
  2. Compatibility. The upgrade path from GPON to XGS-PON and eventually to TWDM-PON is straightforward, with no changes needed in the outside plant. GPON, XGS-PON, and TWDM-PON use different wavelengths so they can coexist on the same fiber. “Combo” PON modules that support both GPON and XGS-PON are becoming available for operators to upgrade customers from GPON to XGS-PON without any changes to optical line terminals (OLTs) or service outages. These combo solutions are ideal for mass deployments. For more tactical upgrades for selected customers, operators can use a traditional approach with separate PONs for GPON and XGS-PON together with an external coexistence element. This gives more flexibility and a lower initial investment.
  3. Cost-efficiency. XGS-PON uses simple, non-tunable optics that are cost-efficient.

Combined, these qualities make XGS-PON a clear winner in the effectiveness stakes. The opportunities for premium-tier services and convergence lead to immediate cost savings, increased revenues and, hence, a faster return on investment.

Figure 1. XGS-PON is the PON technology of choice (Source: IHS, 2019).Figure 1. XGS-PON is the PON technology of choice (Source: IHS, 2019).

The next next-generation

With one eye on the future, it’s always reassuring to know that the near-term investment has a long life ahead of it. So beyond 10G, what are the technologies competing to be the next next-generation PON and how do they fit with today’s choices?

The winner or winners will undoubtedly be the ones that meet the same imperatives that XGS-PON meets today, namely cost-efficiency and compelling business opportunities.

The frontrunner is 25G PON, reflected in the fact that standardization is already underway within the IEEE. This is likely to be a very cost-efficient way of going beyond 10G. That’s because the optical technology behind 25G PON is currently used to connect data centers, so there’s a mature ecosystem of components rapidly increasing in availability, hence prices are coming down. Like GPON and XGS-PON, 25G PON is a simple TDM technology, meaning the upgrade path will be straightforward. As for the business opportunities, 25G capacity already has a number of medium-term use cases:

  • Aggregation of gigabit residential services on a high-density PON with enough headroom to pass any speed test.
  • Business services to high-density areas or to provide true 10G services.
  • 5G mobile transport with its higher cell density and increased bandwidth, and higher QoS for critical mobile communications applications such as autonomous vehicles.

Another option being studied is 20G, created by bonding two 10G wavelengths, one from GPON and one from XGS-PON. Of course, it’s more complex and costly to bond wavelengths – twice as many optics, for a start – and the use of a GPON wavelength makes coexistence a challenge. Two TWDM-PON wavelengths could also be bonded to give 20G, but double the amount of tunable optics in an optical network unit (ONU) makes it too costly for massive deployments.

Point-to-point WDM has also been touted. It provides a dedicated 10G or 25G wavelength per user -- but is unlikely ever to be cost-efficient for massive deployments. It might, however, carve out a niche for low-penetration, high-bitrate services like mobile transport.

Finally, some are pinning their hopes on 50G PON. Delivering 50 Gbps in an access network presents unique technical challenges that will require more expensive solutions. But, honestly, bandwidth projections don’t currently stretch to a need for 50G. That said, we know human nature: more is always better and every increase in bandwidth quickly becomes absorbed and then becomes the norm. However, the other test aside from cost-effectiveness is the use case: there are few applications envisaged today that would need 50G capacity – 25G will do just nicely, thanks very much.

50G is definitely an avenue worth exploring but we’re unlikely to see a mature enough ecosystem until 2025, which may be too late for many operators. So, much like XG-PON, which delivered 10G capacity way before anyone needed it and was then overtaken by better technology (XGS-PON), 50G may suffer the same fate of too much too soon. Time will tell.

A gigabit future

What it really all comes down to is the fact that there’s no one way to get to a gig. While the destination is the same – a utopia where every home in every corner of the planet has a fixed fiber connection – different operators will use different technologies to get there, deployed at different speeds according to need and cost. That’s what makes it so fascinating to be in the gigabit game right now.

Ana Pesovic is marketing director, Fixed Networks, at Nokia. She has more than 20 years of experience in fiber access technologies.

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