The stars have aligned for FTTH equipment vendors and a big shift from GPON to XGS-PON is in full swing, according to Strategy Analytics Senior Analyst Dan Grossman.
The major driver of the FTTH boom is that the COVID-19 pandemic has led to an explosion in broadband activity and FTTH technology is key to meeting it, Grossman wrote in a blog post.
A rise in government funding will further fuel the trend, he said. And another driver is efforts by tier 1 and 2 carriers to replace aging, energy inefficient and difficult to main copper networks with FTTH infrastructure.
While he didn’t discuss numbers, Grossman suggests that the good times will last for these vendors. “[Deployments] will peak in 2024-26 and continue throughout the decade,” he wrote. “It seems that not a single business day passes without yet another announcement from some operator that it is beginning construction of an FTTH network in one of its communities.”
GPON to XGS-PON
Grossman wrote that the technology is evolving as it expands.
XGS-PON, which supports 10 Gbps symmetrical speeds, is seeing big increases, he says. He cited one vendor that had a 93% increase in XGS-PON ports and a 58% increase in ONTs. This approach to FTTH is hot because it has achieved cost parity with older GPON technology.
Finally, Grossman noted that the vendors are weathering supply chain issues well. There is no problem with the OLT and ONT interface and switching fabrics, which are mainly from Broadcom. Generic elements – such as capacitors, voltage regulator chips and mechanical items – are more vulnerable. But vendors are taking steps to work around the issue, Grossman said.
Grossman follows the main western FTTH vendors, which are Adtran, Calix, DZS and Nokia. “All report significant increases in sales year-over-year and some report quarter-over-quarter sales increases (the second quarter is typically slow in the telecom equipment business, so quarter-over-quarter declines are expected). I’m not going to go into the numbers in a short blog post, but overall, it was a blow-out quarter!”