PON-based broadband is winning with future divergence concerns.

PON infrastructure supports more than 600 million premises today. Its success comes from competitive cost points compared to point-to-point fiber access, efficient use of fiber assets, space and power advantages, and easy upgrades to 10G and beyond, over the same ODN (optical distribution network). 10G PON deployments ramped up in many countries in 2020, and this trend will continue.

The use of PON for nonresidential applications and customers is gaining traction with 10G PON product availability, opening-up new revenue streams on the same ODN, and attracting new vendors into the PON market. Many CSPs are evaluating 25G PON, and 50G PON is on the product development roadmap.

Convergence around PON, and its power beyond residential

CSPs, whether integrated, fixed only, and wholesalers, are focusing on PON infrastructure reuse for:

• Enterprise Services: 10G PON supports 1G, 2G, 4G, and 8G symmetrical services to enterprises and small businesses. 25G PON will support 10G symmetrical services.

• xHaul: PON is being used to support 4G mobile backhaul and 25G PON could meet the stringent xHaul requirements for 5G small cell deployments; a major cost concern. PON’s point-to-multipoint topology enables fiber asset efficiency, and this becomes vital when a CSP deploys significant volumes of small cells.

• Network slicing: next-gen PON, combined with Software Defined Access, enables network slicing. Network slicing allows CSPs to create virtual networks with different networking parameters, such as ultra-low latency for high-end gamers or for xHaul fronthaul. CSPs can move to Network-As-A-Service (NaaS) models, a key competitive advantage.

Divergence

The Clean Network initiative may impact the PON vendor ecosystem and ultimately, its users. Vendor choices will be limited for some CSPs under the Clean Network Initiative. The smaller vendors may be challenged to support large CSPs, as well as CSPs in regions where the smaller vendors have little, if no existing presence.

But the greater risk may be around innovation and costs. Significant progress has been made in many aspects of FTTH networking, equipment, and operations, such as intelligent ODN design tools, flexible fiber, PON components, and automated provisioning and monitoring. Several large vendors adopted vertical integration strategies, leading to even lower costs for ODN infrastructure builds and equipment. Lower costs have motivated CSPs to build FTTH networks in countries with relatively low residential ARPU, such as Belarus, Georgia, Latvia, Lithuania, Romania, and Russia in Eastern Europe, and Brunei, China, and Vietnam in Asia. Many residential consumers in Eastern Europe and South-Eastern Asia can choose among several FTTH operators, providing a wide range of competitive service offerings.

It is possible that vendors adversely affected by the Clean Network initiative will limit their involvement with international standards organizations, such as the IEEE, ITU-T, and Broadband Forum, thereby impacting the health of the ecosystem for all vendors. Ultimately, the financial costs of segregation may be passed along to broadband users, particularly where CSPs have limited choices for their PON equipment suppliers.

PON-based broadband has proven its pivotal role during COVID-19. This role will continue for residential and nonresidential users and applications.