E-PON Technology and Markets

SUMMARY

This report reflects the analysis of the newly adopted IEEE 802.3ah standard for Ethernet Passive Optical Networks. The market reacted very positive to this standard acceptance, and E-PON is a welcome newcomer into a group of PON technologies.

E-PON came to the picture after establishing the FSAN group of standards, and its timing reflects the importance of the Ethernet technology:

Ethernet became an official data standard "Ethernet everywhere" concept is being implemented, and proliferation of the technology extends from desktops to core networks E-PON keeps all major features of Ethernet It is particular advantageous to use in the Internet environment.

With this in mind, we developed the report, which, as far as we know, is the first such document dedicated fully to E-PON. It consists of the two major parts -- the technology and the markets. In the technology part, we provided a comprehensive picture on the current status of PON technologies. We emphasize the wide spectrum of issues, and showed E-PON as a technology that has many features standard to all PONs as well as a number of distinguished properties. The heart of the E-PON standard is the Multi-Point Control Protocol, which was developed specifically for this technology. With its help, the E-PON OLT orchestrates all network operations, and provides the required network algorithms.

We also attempted to compare E-PON with previous standards, which is not a trivial task. We provided comparative analysis of technologies, but left to the providers to decide in each particular case what exactly is advantageous for them.

In the marketing part, we estimated the E-PON equipment and providers' revenue markets as derivative of the total PON market. Our estimate proves that the E-PON market, though still very young, shows all symptoms of the strength, and in many cases E-PON will push B-PON and G-PON aside.

TABLE OF CONTENTS

1.0 Introduction 5

• 1.1 General 5
• 1.2 PON Appearance 5
• 1.3 E-PON 6
• 1.4 Scope 6
• 1.5 Research Methodology 7
• 1.6 Target Audience 7

2.0 PON Before E-PON 9

• 2.1 PON Development 9
  • 2.1.1 Why PON? 9
  • 2.1.2 The PON Proposition 10
  • 2.1.3 Principles 10
  • 2.1.4 Standards 12
  • 2.1.5 PON Classification 14
• 2.2 Pre-E-PON Technologies 16
  • 2.2.1 A-PON 16
    • 2.2.1.1 General 16
    • 2.2.1.2 Frame Structure 17
  • 2.2.2 B-PON 18
    • 2.2.2.1 General 18
    • 2.2.2.2 Wavelength Allocation 19
    • 2.2.2.3 Rate 19
    • 2.2.2.4 Services 19
    • 2.2.2.5 Split Ratio 20
  • 2.2.3 G-PON 20
    • 2.2.3.1 General 20
• 2.3 PON Elements 22
  • 2.3.1 Optical Line Termination (OLT) 22
    • 2.3.1.1 PON Core Shell 23
    • 2.3.1.2 Cross-connect Shell 23
    • 2.3.1.3 Service Shell 23
  • 2.3.2 Optical Network Unit (ONU) 23
  • 2.3.3 Optical Distribution Network (ODN) 24

3.0 Road to E-PON 25

• 3.1 Reasons 25
• 3.2 Format 25

4.0 E-PON Standard 28

• 4.1 Formats of Transmission 28
  • 4.1.2 Downstream and Upstream Separation 29
  • 4.1.3 Frequencies 29
  • 4.1.4 Topology 29
  • 4.1.5 Downstream Transmission 29
  • 4.1.6 Upstream Transmission 30
  • 4.1.7 Framing 31
• 4.2 Rates 32
  • 4.2.1 Point-to-Point (P2P) Transmission 32
  • 4.2.2 Point-to-Multipoint (P2MP) Transmission 32
  • 4.2.3 Physical Layer 33
• 4.3 Multi-Point Control Protocol (MPCP) 34
  • 4.3.1 General 34
  • 4.3.2 Modes 35
    • 4.3.2.1 Auto-Discovery 35
    • 4.3.2.1 Bandwidth Assignment Mode 36
• 4.4 Topology Emulation Sub-layer 37
• 4.5 OAM 37
• 4.6 Forward Error Correction (FEC) 39
• 4.7 Security 39
  • 4.7.1 General 39
  • 4.7.2 Solution 39
• 4.8 Quality of Service (QoS) and E-PON 40
• 4.9 E-PON vs. FSAN Technologies 41
  • 4.9.1 General 41
  • 4.9.2 E-PON Challenges 41
  • 4.9.3 Parameters 42
  • 4.9.4 Formats 43
  • 4.9.5 Comparison 43

5.0 E-PON Market 46

• 5.1 PON Market 46
  • 5.1.2 PON Commercialized 46
  • 5.1.3 Forecast 49
    • 5.1.3.1 General 49
    • 5.1.3.2 Market Forecast 49
      • 5.1.3.2.1 Model Assumptions 49
      • 5.1.3.2.2 Market Estimate 49
        • 5.1.3.2.2.1 Structure 49
        • 5.1.3.2.2.2 Equipment 49
          • 5.1.3.2.2.2.1 Estimate 50
      • 5.1.3.2.2.3 Providers Revenue 50
• 5.2 E-PON Market 50
  • 5.2.1 Equipment 50
  • 5.2.2 Providers Revenue 52

6.0 Vendors 55

• AFL 55
• Allied Telesyn 56
• Alloptic 56
• Ericsson 57
• Fujkura 59
• Hitachi 61
• Nayna 62
• Optical Zonu 63
• Passave 64
• Salira 64
• Sumitomo Electric 65
• Teknovus 67
• UTStarcom 67
• Vitesse 68
• Wave7 Optics 69

7.0 Conclusions 71

List of Figures

• Figure 1: PON Reference Model 12
• Figure 2: PON Details 13
• Figure 3: PON Standardization Process 15
• Figure 4: PON Inside 17
• Figure 5; A-PON Illustration 18
• Figure 6: B-PON Enhancements (Downstream) 20
• Figure 7: G-PON Illustration 23
• Figure 8: OLT Functional Block Diagram 23
• Figure 9: ONU Functional Block Diagram 25
• Figure 10: Ethernet Channel Simplified 27
• Figure 11: Ethernet Frame - Basic Structure 28
• Figure 12: E-PON Channel 29
• Figure 13: Illustration - Downstream Transmission 30
• Figure 14: Illustration - Upstream Transmission 31
• Figure 15: Downstream Frame 32
• Figure 16: Upstream Frame 33
• Figure 17: E-PON OAM Process Standardization 39
• Figure 18: PON Technologies Distribution (2005) 48
• Figure 19: PON Technologies -- 2010 View 49
• Figure 20: Penetration Dependence 49
• Figure 21: E-PON Equipment Sales - Estimate ($M) 52
• Figure 22: E-PON Market by Region 53
• Figure 23: E-PON Providers Market Estimate - U.S. Residential Segment ($M) 53
• Figure 24: E-PON U.S. Service Providers Revenue Estimate (Business Segment, in Million $US) 54
• Figure 25: E-PON Service Providers Revenue Estimate (Asia, $M) 55
• Figure 26: E-PON Service Providers Revenue Estimate (Europe, $M) 55

List of Tables

• Table 1: G-PON Signal Rates 23
• Table 2: EFM Physical Layer 36
• Table 3: Major PON Providers 49
• Table 4: PON Service Scenarios 51
• Table 5: E-PON Equipment Market Components Distribution (2005) 54