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Infonetics Research: GPON sales up 77% in 2Q08, driven by Verizon’s FiOS buildout

Market research firm Infonetics Research reports that the worldwide PON equipment market grew 17% to $486 million in 2Q08, thanks primarily to Verizon, whose FiOS buildout prompted a huge increase in BPON ONT and GPON OLT shipments. The PON equipment market is driven by service provider investments in broadband access networks to deliver bandwidth-intensive services such as IPTV bundled with voice and high-speed Internet services.

Verizon’s purchase of GPON OLTs from Alcatel Lucent and Motorola led the GPON equipment segment to surge 77% sequentially in 2Q08, according to the report, PON and FTTH Equipment and Subscribers.

"Though GPON growth is expected to be healthy across the board, some major vendors are dropping out of the race to focus their efforts and R&D resources on next generation PON technologies like WDM-PON and 10G EPON. The GPON vendor landscape was due for some contraction, and with vendors like Nokia Siemens and Tellabs abandoning GPON for WDM-PON, the big winners in the GPON market look to be Alcatel Lucent, Huawei, Motorola, ZTE, and Ericsson," said Jeff Heynen, directing analyst for broadband networks at Infonetics Research.

Heynen added that Infonetics adjusted its PON revenue forecasts down based on conversations with service providers who are postponing fiber upgrades until they are confident subscriber uptake of ultra-broadband services will justify the expense associated with extending fiber to buildings and residences. Today’s global economic climate solidifies their rationale for holding off on new investments. However, there are many service providers who had already committed budget to fiber upgrades, such as Verizon, NTT, KT, and Hanaro, who see fiber as a strategic advantage and who continue to aggressively roll out new fiber.

Other highlights from the report:

-  Mitsubishi continues to lead the overall worldwide PON equipment market, although competitors continue to chip away at its lead, with Tellabs and Alcatel Lucent now neck and neck for second position
-  In 2Q08, Alcatel-Lucent retains 1st place in worldwide GPON revenue, and Motorola posts a 451% sequential jump in revenue, propelling it to 2nd position, ahead of Huawei for the first time
-  PacketFront and Cisco are running neck and neck in the worldwide Ethernet FTTH equipment market, with PacketFront ahead by far for CPE and Cisco ahead by far for switches
-  Between 1Q08 and 2Q08, worldwide BPON manufacturer revenue increased 25% and ports climbed 52%
-  Worldwide BPON, EPON, and GPON subscribers are forecast to top 46 million in 2011
-  The expense of WDM-PON systems is expected to be too high for most carriers in the early phases of the market, leading carriers to use WDM-PON for DSLAM backhaul applications, as opposed to FTTH deployments, until WDM-PON prices come down

Infonetics’ report tracks PON equipment revenue and ports, including BPON, EPON, GPON, WDM-PON, and OLTs and ONTs with FTTH vs. FTTB splits; Ethernet FTTH equipment (CPE vs. service provider); and total FTTH equipment (CPE vs. non-CPE). The report also tracks PON, POTS, Ethernet, and DSL ports; and PON, PON FTTH, and Ethernet FTTH subscribers.

Companies tracked include Alcatel-Lucent, Allied Telesis, Alloptic, Calix, Ciena (World Wide Packets), Cisco, Corecess, ECI, Ericsson, FiberHome, Fujitsu, Furukawa Electric, Hitachi, Huawei, Mitsubishi, Motorola, NEC, Nokia Siemens Networks, Novera Optics, Occam Networks, PacketFront, Sagem, Samsung, Sumitomo, Telco Systems, Tellabs, UTStarcom, ZTE, and others.

 [November 3, 2008]


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