G-PON Technology and Markets

SUMMARY

This report reflects the analysis of the newly adopted ITU G-PON standard. The market reacted very positive to this standard acceptance, and G-PON is a welcome newcomer into a group of PON technologies.

G-PON came to the picture after the FSAN group had established initial standards (A/B-PON), and its timing reflects the importance of further improvements of FTTP technology:

• G-PON extended speed of transmission to 2.4 Mb/s
• G-PON can be enhanced with FEC and protection schemes
• G-PON is able to transmit IP, SONET, voice and video

With this in mind, we developed the report, which, as far as we know, is the first such document dedicated fully to G-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 G-PON as a technology that has many features standard to all PONs as well as a number of distinguished properties. The important parts of the G-PON standard are the GIANT MAC protocol, including GEM. Due to high rate of transmission, G-PON is especially effective for multi-channel TV support, including HDTV.

We also attempted to compare G-PON with other PON standards, particular E-PON, which is not a trivial task. We provided a 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 G-PON equipment and providers revenue markets as derivative of the total PON market. Our estimate proves that the G-PON market, though still very young, shows all symptoms of the strength, and in many cases G-PON is in the winning situation.

Research Methodology

Considerable research was done using the Internet. Information from various Web sites was studied and analyzed. Evaluation of publicly available marketing and technical publications was conducted. Telephone conversations and interviews were held with industry analysts, technical experts and executives. In addition to these interviews and primary research, secondary sources were used to develop a more complete mosaic of the market landscape, including industry and trade publications, conferences and seminars.

The overriding objective throughout the work has been to provide valid and relevant information. This has led to a continual review and update of the information content.

Target Audience

This report is important to a wide population of researches, technical and sales staff involved in the developing of the PON services and products. It is recommended for both service providers and vendors that are working with related technologies. The report also helps to understand issues associated with relationship between PON and other technologies.

TABLE OF CONTENTS

1.0 Introduction 7

• 1.1 General 7
• 1.2 PON Appearance 7
• 1.3 G-PON 8
• 1.4 Scope 8
• 1.5 Research Methodology 9
• 1.6 Target Audience 9

2.0 PON Without G-PON 11

• 2.1 PON Development 11
  • 2.1.1 Why PON? 11
  • 2.1.2 The PON Proposition 12
  • 2.1.3 Principles 12
  • 2.1.4 Standards 14
  • 2.1.5 PON Classification 16
• 2.2 PON Technologies 18
  • 2.2.1 A-PON 18
    • 2.2.1.1 General 18
    • 2.2.1.2 Frame Structure 19
  • 2.2.2 B-PON 20
    • 2.2.2.1 General 20
    • 2.2.2.2 Wavelength Allocation 21
    • 2.2.2.3 Rate 21
    • 2.2.2.4 Services 21
    • 2.2.2.5 Split Ratio 22
  • 2.2.3 E-PON 22
    • 2.2.3.1 Formats of Transmission 22
    • 2.2.3.2 Downstream and Upstream Separation 23
    • 2.2.3.3 Frequencies 23
    • 2.2.3.4 Topology 24
    • 2.2.3.5 Downstream Transmission 24
    • 2.2.3.6 Upstream Transmission 25
    • 2.2.3.7 Rates 25
    • 2.2.3.8 Multi-Point Control Protocol (MPCP) 25

3.0 G-PON Technology 27

• 3.1 General 27
• 3.2 Rates 27
• 3.3 Operating wavelength 27
  • 3.3.1 Downstream Direction 27
  • 3.3.2 Upstream Direction 28
• 3.4 Distance Range 28
• 3.5 New Features 28
  • 3.5.1 Forward Error Correction 29
  • 3.5.2 Services 29
  • 3.5.3 Compatibility 30
  • 3.5.4 G-PON Physical Medium Dependent Layer (GPM) 30
  • 3.5.5 G-PON Transmission Convergence Layer (GTC) 30
  • 3.5.5.1 Encryption 31
• 3.6 Channel Structure 31
• 3.7 G-PON Elements 32
  • 3.7.1 Optical Line Termination 32
  • 3.7.1.1 PON Core Shell 33
  • 3.7.1.2 Cross-connect Shell 33
  • 3.7.1.3 Service Shell 33
  • 3.7.2 Optical Network Unit (ONU) 34
  • 3.7.3 Optical Distribution Network (ODN) 34
• 3.8 GPON Operation 34
  • 3.8.1 QoS 36
  • 3.8.2 The MAC Algorithm 36

4.0 G-PON Place 38

• 4.1 General 38
• 4.2 E-PON Challenges 38
  • 4.2.1 Prioritization 38
  • 4.2.2 Parameters 39
  • 4.2.3 Formats 40
• 4.3 Considerations: G-PON and E-PON 40

5.0 G-PON Market 43

• 5.1 PON Market 43
  • 5.1.2 PON Commercialized 43
  • 5.1.3 Forecast 46
  • 5.1.3.1 General 46
  • 5.1.3.2 Market Forecast 46
  • 5.1.3.2.1 Model Assumptions 46
  • 5.1.3.2.2 Market Estimate 46
  • 5.1.3.2.2.1 Structure 46
  • 5.1.3.2.2.2 Equipment 47
  • 5.1.3.2.2.2.1 Estimate 47
  • 5.1.3.2.2.3 Providers Revenue 47
• 5.2 G-PON Market 47
  • 5.2.1 Equipment 47
  • 5.2.2 Providers Revenue 49

6.0 Samples: G-PON Projects 52

7.0 Vendors 54

• DenseLight 54
• Flexlight 56
• NeoPhotonics 57
• OFS 58
• Oplink 59
• Optical Solutions 59
• Optical Zonu 60
• Terawave 61
• Vitesse 62

8.0 Conclusions 64

• Figure 1: PON Reference Model 13
• Figure 2: PON Details 14
• Figure 3: PON Standardization Process 16
• Figure 4: PON Inside 18
• Figure 5; A-PON Illustration 19
• Figure 6: B-PON Enhancements (Downstream) 21
• Figure 7: E-PON Channel 23
• Figure 8: Downstream Transmission 24
• Figure 9: Upstream Transmission 25
• Figure 10: G-PON Illustration 32
• Figure 11: OLT Functional Block Diagram 33
• Figure 12: ONU Functional Block Diagram 34
• Figure 13: PON Technologies Distribution (2005) 44
• Figure 14: PON Technologies - 2010 View 45
• Figure 15: Penetration Dependence 45
• Figure 16: G-PON Equipment Sales - Estimate ($M) 48
• Figure 17: G-PON Market by Region 49
• Figure 18: G-PON Providers Market Estimate - U.S. Residential Segment ($M) 49
• Figure 19: G-PON U.S. Service Providers Revenue Estimate (Business Segment, in Million $US) 50
• Figure 20: G-PON Service Providers Revenue Estimate (Asia, $M) 51
• Figure 21: G-PON Service Providers Revenue Estimate (Europe, $M) 51
• Table 1: G-PON Rates of Transmission 27
• Table 2: G-PON PMD Layer Parameters 28
• Table 3: Major PON Providers 44
• Table 4: PON Service Scenarios 46
• Table 5: G-PON Equipment Market Components Distribution (2006) 49