Home > Market Research > Broadband & Fixed > FTTP: The New Standard And How It's Changing Already!

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Market Study
Published: August 2007
Pages: For full details, please email keithw@cmsinfo.com
Tables: For full details, please email keithw@cmsinfo.com
From: GBP 1997.50   Buy Now!
Research from: Information Gatekeepers Inc.
Sector: Broadband & Fixed

This report will consider the issues of the background competitive landscape ? especially now that the RBOCs have swallowed up the two largest IXCs (and CLECs).

On May 29, 2003, the three largest RBOCs (BellSouth, AT&T, and Verizon) announced that they had adopted a common set of technical specifications for the delivery of fiber-to-the-premises (FTTP). Since then, FTTP has become the "gold standard" in local access. Verizon is installing FTTP BPONs at a rate of 3,000,000 per year. It appears other major telcos are ready to jump on this bandwagon, and many smaller telcos are installing similar access architectures across the country. AT&T is installing FTTN (and some FTTP) at the rate of about 2,000,000 per year with a speed-up promised.

In the midst of all this success, we are about to see some major changes! The architecture is going to change; the players are going to change (more will be joining); and the rate of installation will increase! Why do we face change in this very successful program? What is the new architecture, and why is it being selected? What are the other major RBOCs going to do? This report will address these questions.

We have now been producing annual reports on FTTP since before the program was actually originated. This is the most comprehensive of those reports, and it has the most useful direct forecast information ever presented on FTTP. This latest incarnation of our efforts to keep our clients completely up-to-date on FTTP will focus on the following:

-The substantial progress to date for FTTP
-The changes we see coming for FTTP from new organizational structures
-Changes we see coming for the architecture

Our forecasts for the future, including for RBOCs not now involved

The RBOCs, all three (now that the AT&T/BellSouth merger has been consummated) to greater or lesser extents, are now in the process of rolling out FTTP. Verizon has a monumental effort underway, and the other two are in various stages (lab tests, minor deployments, or preparing massive rollouts) of deployment. The RBOCs have actually moved into the video business in a massive way. As forecast in our 2005 and 2006 reports, two of the RBOCs are in the residential TV delivery business. Several relatively new technologies have been deployed in their entries into that business, and the RBOCs will use just about every imaginable combination of those technologies to achieve their objectives. This report covers all details of these activities.

In other times, the announcement of the FTTP RFP (and the subsequent RFP for GPONs) would likely be viewed by most with a big yawn ? just another technical standardization. However, in today’s times, this was the biggest news in the telecommunications world ? perhaps the biggest in years. The initial announcement was followed by a joint RFP issued in June 2003 to selected vendors for the FTTP equipment. Responses and vendor selections were made in the third quarter of 2003, with initial deployments to beginning in 2004. As we will detail, this schedule was not completely met, but the RBOCs (at least Verizon) were close. Then in late 2005, the RBOCs issued a RPF for GPON approaches to FTTP. In mid-2006, Verizon announced awards under that RFP.

These three RBOCs serve 123,000,000 of the 180,000,000 access lines (68%) in the U.S., which is the main reason for the excitement. They also control the largest interexchange carriers and the largest cellular phone companies. These three companies are the powerhouses of the telecom world. In a recent year, their capital expenditures were 76% of the total by major telephone companies, and over 46% of all capital spent that year by all telecommunications carriers! Clearly, these three companies have the financial power to rule the equipment markets.

The equipment vendors have looked at the potential size of a project to bring fiber near the customers of these three companies, and they visualize a return to the go-go days of the late 1990s telecom market. At around $1,000 capital cost per installed fiber line, it is easy to see how a program that involves over 100,000,000 lines could easily drive a return to profitability for many equipment vendors.

This report will consider the issues of the background competitive landscape ? especially now that the RBOCs have swallowed up the two largest IXCs (and CLECs):

-The details of the RBOC PON and the GPONs
-The current deployment plans of the RBOCs and our forecast for changes;
-An analysis of the economic impact (capital and on the overall network) of the current plans, as well as of our forecasted deployments
-Extensive forecasts of FTTP and associated equipment are provided, particularly GPONs vs. BPONs
-Forecasts for the relative use of FTTP, FTTN, and FTTC.

Details of the various RBOC access architectures, and how video fits into these architectures; details of the various options for deploying video ? FTTX, broadcast video, and IPTV;

Vendors of the equipment and software covered in detail

About the New Appendix

In April of 2007, we released out latest Report on FTTP, titled “FTTP ? The New Standard and How It Is Changing ? Already! AT&T, Verizon and Qwest Plans ? 2007.” While this is a very detailed report (over 140 pages and 75 Figures) there is always something else needed. In response to some of our customers, we have, thus, developed this Appendix to add many more charts and a great deal of statistical information not in the original report.

The emphasis in this Appendix will be on quantifying the parts of the FTTP effort. We will start with some information on customers (both served and houses passed); move to equipment requirements (BPONs and GPONs, central office end and field end); and finish with estimates of the fiber cable needed. In all cases, the material in this Appendix is completely consistent with the original report. All new forecasts are directly and concretely tied to the forecasts in the original work. In most cases, we will provide quantities based on our forecast and on the currently stated plans of the RBOCs, which are a great deal different.

We have added 19 new graphs and over 20 pages of material to a report that already has about 140 pages and 70+ charts. This new material deals quantitatively with the needed central office equipment and the needed fiber to implement the FTTP plans. We have also elaborated on our forecasts for added FTTx customers of each of the RBOCs. All of the data is provided for the existing plans of the RBOCs and for our forecasts of what they will actually do. As readers will see, these are very different things!

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Table of Contents

Table of Contents
Table of Figures
The Lightwave Network Series of Reports
Introduction
This Report
Background
Market Competitive Analysis
Pre-Merger Competition
RBOCs vs. the CLECs (IXCs)
The RBOC Counterattack – Long Distance
Post Merger Competition
RBOC Purchase of IXCs
RBOCs vs. Cable Companies
Cable Companies vs. Satellite Companies
RBOCs’ FTTP Plan – The Lightwave Is Back!
FTTP as the Light Sword of the RBOCs
Comments on Triennial Review Results
Original Schedule
Differences of the RBOCs
The Need for Capacity
How Much Bandwidth Is Enough?
Basis for Estimating Needs
Access Architecture
Various Approaches for Fiber-based Access Architecture
Fiber to the “X”
xDSL Versions
Design Details for Current Plans
Fiber to the Neighborhood (FTTN)
AT & T‘s Fiber to the Node (FTTN)
BellSouth’s Fiber to the Curb (FTTC)
The RFP – PONs Will Set Us Free
What Are PONs?
The PON Design
Status of PON
Advantage and Disadvantages of PON
Types of PONs
BPON
EPON
GPON
The PON in the First RFP
GPONs
Architectures to Meet the Needs
Approaches to Video Delivery
Broadcast
IPTV
IPTV Architecture
IPTV Global Architecture
Super Hub Office
Video Hub Office
Serving Offices
IPTV Distribution and Access Architecture
IPTV Channel Selection
RBOC Plans
Verizon Plan
Verizon - Physical Description
Verizon Vendors
Verizon - Size of Rollout
Verizon – Services
AT&T Plan
AT&T – Physical Description
AT&T Vendors
AT&T – Size of Rollout
AT&T – Lightspeed Services
Video
Internet
Voice
AT&T U-verse Video Services
High-Speed Access U-verse Services
BellSouth Plan
BellSouth – Physical Description
Pre-Merger
Post-Merger
Qwest Plan
FTTP
Other Architectures
Future Plans
Comparing the Plans of the RBOCs
Operations Savings Estimates
Summary of Announced Plans
Verizon
AT&T
Bell South
Qwest
Summary information on the Announced Plans
Announced Plans – Quantitative Analysis
Announced Plans – Size
Announced Plans – Costs
Forecast for FTTP
Forecasts for Deployment
AT&T
Verizon
BellSouth
Qwest
Deployment Forecast Summary
AT&T
Verizon
BellSouth
Qwest
Forecast size of Deployments
Technology Forecast
Forecast Technologies by Type
Forecast PONs – GPON vs. BPONs
Forecast Costs
Vendors of the Light Sword
Requirements for a Successful Vendor
Possible Consortiums
Selected Vendors
Vendors of GPONS
Vendors Listing
Summary of Vendors
Detailed Listing of Vendors

ACTERNA
Adtran
Advanced Fibre Communications Inc. (AFCI) (Now Tellabs)
Alcatel
Alloptic Inc
Amino Technologies plc
AOC Technologies
Avanex Corporation
Broadlight
Calix
Cisco
Corrigent
Entrisphere, Inc.
Ericsson
Fiberxon
Finisar Corporation
FlexLight Networks
Fujitsu
Genone3 Technologies, Inc.
Hitachi Cable
HUMAX USA Inc.
iamba Networks
JDS Uniphase
Kreatel Communications AB
LightComm Technology
Lucent/Alcatel
Marconi
Microsoft
Motorola
NeoPhotonics
Nortel
OFS
O-Net Communications Ltd
Oplink Communications, Inc.
Optiviva Inc.
Optical Solutions
Osaki Electric Co., Ltd.
Paceon (Mitsubishi)
Passav
Quantum Bridge Communications
Salira Optical Network Systems
Scientific-Atlanta
Siemens
Tandberg, Ltd.
Tellabs
Terawave
Tut Systems
Vinci Systems, Inc.
Wave7 Optics
Worldwide Packets, Inc
Zhone Technologies

Appendix (Added August 30, 2007)
Introduction
Deployment and Customers
Deployment
Customers
Equipment Requirements
PONs
Equipment Requirements – PONS- Plan
BPONS - Plan
GPONS - Plan
Total PONs – Plan
Equipment Requirements – PONS- Forecast
BPONs - Forecast
GPONs - Forecast
Total PONs - Forecast
Fiber Needed
Fibers – Current RBOC Plans
Fibers – IGI Forecast RBOC Plans
Fibers Required – Summary and Comparison of Plans vs. Forecast

Table of Figures

Figure 1, Market Matrix – Pre-Mergers
Figure 2, RBOCs vs. CLECs (IXCs)
Figure 3, RBOCs in Long Distance
Figure 4, Revised Competitive Structure Due to IXC Purchases
Figure 5, RBOCs Subsume IXCs and CLECs
Figure 6, RBOCs vs. Cable Companies
Figure 7, High Speed Forecast
Figure 8, Verizon H-S Access Lines - By Quarter
Figure 9, Adoption Rates of PCs and High-Speed Access
Figure 10, Cable Companies vs. Satellite Companies
Figure 11, Summary of Competitive Position
Figure 12, Five Reasons for ‘Why FTTP Now?’
Figure 13, FTTP Schedule
Figure 14, Bandwidth Needs - Current Compression Technology
Figure 15, Usage Forecast Calculation Details
Figure 16, Fiber to the 'X' Varieties
Figure 17, Chart of Various xDSL Technologies
Figure 18, Fiber to the Neighborhood
Figure 19, Fiber to the Node
Figure 20, Fiber to the Curb
Figure 21, PON Basic Arrangement
Figure 22, RFP PON – Central Office Portion
Figure 23, RFP PON – Outside Plant Portion
Figure 24, RFP PON Service Assignments
Figure 25, BPON/GPON Comparison
Figure 26, Typical GPON
Figure 27, Bandwidth Needs vs. Capabilities
Figure 28, Broadcast TV on BPONs
Figure 29, Broadcast TV
Figure 30, IPTV General Architecture
Figure 31, IPTV Global Architecture
Figure 32, IPTV Access Architecture
Figure 33, FTTP Architecture for IPTV
Figure 34, IPTV Hub Office Architecture
Figure 35, IPTV Channel Selection
Figure 36, Map of Verizon FTTP Exchanges
Figure 37, Verizon FIOS Offices
Figure 38, Verizon Services
Figure 39, AT & T U-verse Video Services
Figure 40, North Texas U-verse Service Offering
Figure 41, AT&T U-verse High-speed Access Services
Figure 42, Announced Plans Summary Chart
Figure 43, Announced Plans – Annual HPs
Figure 44, Announced Plans - HPs Cumulative Passed vs. Served
Figure 45, Announced Plan - Comparison to H-S Accesses
Figure 46, Severed Customer Cost Assumptions
Figure 47, Cost per Unserved (but passed) House
Figure 48, Assumed Cost for FTTN and FTTC
Figure 49, Announced Plan - Costs by Segments
Figure 50, Cumulative Costs - Announced Plans
Figure 51, Segment Costs Including Video
Figure 52, Announced Plan - Capital Costs and Budget Impact
Figure 53, Forecast Homes Passed Cumulative - All Technologies
Figure 54, Forecast Homes Passed Annually - By Company - All Technologies
Figure 55, FTTX vs. H-S Accesses vs. US Households
Figure 56, Technology Type Cumulative - Forecast
Figure 57, Forecast Technologies - Homes Passed - Annual
Figure 58, Forecast Homes Passed - PONs vs. Other Technologies
Figure 59, Total PONS Forecast - RBOCs – Cumulative
Figure 60, Moving from BPONs to GPONs
Figure 61, Forecast BPONs vs. GPONs by Year
Figure 62, Verizon PON Forecast
Figure 63, AT&T PON Forecast
Figure 64, Severed Customer Cost Assumptions
Figure 65, Cost per Unserved (but passed) House
Figure 66, Assumed Cost for FTTN and FTTC
Figure 67, Forecast FTTP Costs by Plant Segment
Figure 68, Forecast Plan Costs by Architecture
Figure 69, Video Costs as Related to Total Plan
Figure 70, Forecast Cumulative Cost and Annual Budget Impact
Figure 71, Requirements for Successful RFP Vendor
Figure 72, Possible Consortiums
Figure 73, Originally Selected Vendors
Figure 74, Newly Selected Vendors
Figure 75, GPON Selected Vendors
Figure 76, Summary of Vendors

Appendix (Added August 30, 2007)
Figure 1, Current Plans - Homes Passed -Cumulative
Figure 2, IGI Forecast for Homes Passed
Figure 3, Penetration Rates Forecast Vs. Plan
Figure 4, Forecast - Homes Served - Annual Additions
Figure 5, Forecast Homes Served – Cumulative
Figure 6, Forecast Homes Passed to Served
Figure 7, Forecast of Penetration Rates
Figure 8, Currently Planned PONs
Figure 9, Forecast for PON Implementation
Figure 10, Forecast Access Networks By Architecture
Figure 11, Chart of Equipment Requirements - BPONS – Plan
Figure 12, Chart of Equipment Requirements - GPONs – Plan
Figure 13, Chart of Equipment Requirements – all PONs – Plan
Figure 14, Chart of Equipment Requirements - BPONs – Forecast
Figure 15, Chart of Equipment Requirements - GPONs – Forecast
Figure 16, Chart of Equipment Requirements – All PONs - Forecast
Figure 17, Fibers Needed Current Plans
Figure 18, Forecast Fiber Used By Technology
Figure 19, Comparison of Plan vs. Forecast for Fiber Strand Requirements

For full details, please email keithw@cmsinfo.com

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