Fiber-to-the-Home Deployments to Grow More Than 32% This Year, Heavy Reading Finds

NEW YORK, July 23 /PRNewswire/ – Despite the global economic slump, the number of households with fiber-optic network connections will grow by more than 32% worldwide in 2009 and will continue to grow at rates close to 30% a year through 2013, when the number of fiber-connected households will reach nearly 130 million globally, according to a major new report from Heavy Reading (www.heavyreading.com), the market research division of Light Reading (www.lightreading.com).

FTTH Review & Five-Year Forecast: The Road to Next-Gen PON provides a comprehensive global view of the ongoing transition to fiber to the home (FTTH). The report analyzes the prospects for existing and new technology, focusing in particular on the likely lifetime of existing PON technologies and the prospects for their replacement or augmentation by next-gen PON technologies. It offers an overview of important FTTH projects and developments over the past year in all geographies, including North America, Asia/Pacific, and Europe, as well as detailed discussion of major countries in each region and snapshots of many smaller countries.

The cornerstone of the 85-page report is an in-depth 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. The report also presents a detailed 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 offers in related areas, plans for future development, and strengths and weaknesses.

For the full list of technology suppliers analyzed in this report, please see:

http://img.lightreading.com/heavyreading/pdf/hr20090723_vendors.pdf.

“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 rollouts 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 rollout plans,” he says. “These variations will also occur at the national level, creating some dilemmas for regulators and politicians. Already, a ten-year gap in fiber development has opened up between fiber-heavy countries such as Japan and European nations, including Germany and the U.K. — 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 percent of all households worldwide — a compound annual growth rate of about 29 percent.

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 U.S.; while about 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 buildouts from the economic downturn so far. However, views are mixed: Some suppliers report business down by as much as 40 percent year-over-year, while others report little or no impact. The effect of the economy has been fragmentary, with buildouts 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 MSOs could become important providers of FTTH in the next few years. Cable operators are examining a variety of approaches, and one in particular — RFoG — will likely lead to widespread cable-deployed FTTH in the next five years. 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 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 U.S., 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 U.S., 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.

FTTH Review & Five-Year Forecast: The Road to Next-Gen PON is essential reading for a wide range of industry participants, including the following:

• FTTH technology suppliers: How will demand for FTTH progress in coming months and years? How will the global economic downturn affect FTTH deployments? Which regions are going to see the most FTTH buildout activity, and which network operators will be leading the way? Which technology choices are deployers most likely to make? Are your products and marketing messages in line with customer plans and expectations? Are there significant gaps in your product line coverage that need to be addressed to meet future demand for FTTH solutions?
  

• Other equipment suppliers: How will demand for your products be affected by FTTH deployment plans? Which technologies are emerging as the most likely winners for tomorrow’s access networks? Is your company in position to take advantage of those anticipated changes?
  

• Network operators: How do your plans for FTTH deployment compare with those of your competitors? Does your access strategy deliver the best cost-control option for your network, or are there other alternatives that will deliver greater efficiency? How do your projected costs for FTTH deployment match up with the rest of the industry? What is the competitive threat posed by FTTH from other operators?
  

• Investors: Which technologies are emerging as the winning solutions for FTTH, and which companies are the leading providers of those solutions? How will FTTH affect profitability for the telecom service sector in the coming months and years?
  

FTTH Review & Five-Year Forecast: The Road to Next-Gen PON 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.

For more information, or to request a free executive summary, contact:

    Dave Williams
    Sales Director, Heavy Reading
    858-485-8870
    dave.williams@heavyreading.com

    Press/analyst contact:
    Dennis Mendyk
    Managing Director, Heavy Reading
    201-587-2154
    mendyk@heavyreading.com

About Heavy Reading

Heavy Reading is an independent market research organization offering quantitative analysis of telecom technology to service providers, vendors, and investors. Its mandate is to provide the comprehensive competitive analysis needed today for the deployment of profitable networks based on next-generation hardware and software.

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SOURCE Heavy Reading