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The Future of FTTH in China – Part II

This is part II in a continuing series. Part I can be found here.

Technology Selection – GE-PON vs. G-PON

Chinese carriers will be forced to select between two competing standards for Passive Optical Networks (PON) for Fiber to the Home (FTTH) Deployments.

There are two competing PON specifications – GE-PON, the IEEE 802.3ah Ethernet in the First Mile specification, and G-PON, the ITU G.984 specification. A blow by blow comparison is beyond the scope of this article. Below is a table from Broadlight, a supplier of G-PON silicon to Tellabs and Hitachi, and the leading commercial vendor of G-PON silicon.


Those interested in the detailed technical differences can find good information through these links. Take the source/sponsor into account as each vendor has their own agenda:

GE-PON, sometimes referred to as E-PON, has its roots in the Ethernet protocol, something it’s supporters never fail to highlight. The all-conquering nature of the Ethernet beast is a powerful marketing message-carriers are pretty good at resisting such nonsense even if the mainstream technical media is not.

The majority of GE-PON deployment has been performed by NTT (NTT), who also helped define several addendums to the IEEE spec to support network management, bandwidth-on-demand bursting, optical gain improvement through forward error correction, and encryption. These addendums are not part of the IEEE specification, allowing carriers to pick and choose the features they desire for their network.

G-PON has it’s roots in B-PON, which is the ATM-centric FTTH technology currently used by Verizon’s (VZ) FiOS service as well as scattered municipal deployments. B-PON equipment is provided primarily by Quantum Bridge (acquired by Motorola (MOT)), AFC (acquired by Tellabs (TLAB)), Hitachi (HIT), and Optical Solutions (acquired by Calix). These companies, in addition to Alcatel (ALA), are the most likely solution set of successful G-PON suppliers.

While the G-PON specification is complete, G-PON hardware is far less mature than GE-PON. The G-PON protocol is more feature rich and elaborate than GE-PON as many of the addendum features of GE-PON are standard in the G-PON specification. The resulting complexity of the ITU spec has delayed the availability of compliant hardware and made successful interoperability trials impossible to date. Over time these issues will be worked out, primarily by FSAN, a federation of carriers and suppliers that lends a sense of urgency to the sometimes plodding ITU standards pace.

The relative advancement of both protocols can be clearly seen in a keyword snapshot from Google Trends.

gpon epon Google Trends

State of Deployment in Asia

Forecasting the technology choice between GE-PON and G-PON is a challenge as each vendor issues press releases and engages in positioning to make it appear their chosen technology will prevail. Flexlight, in particular, has been aggressive in announcing Chinese G-PON customers. Google ‘ GPON China –FlexLight’ and the amount of market noise both within China and outside China attenuates.

Let’s first look at what we do know about Asian FTTH deployments.

Japan, led by NTT, is solidly GE-PON. By March 2006 NTT expects to have over 6 million GE-PON subscribers and over 30 million by 2011. The pace of installation and scale of the effort are breathtaking.

Japanese Broadband Subscribers

We were first to highlight in November ‘05 that new installations of FTTH now outpace DSL installs, and the gap has since opened. Mitsubishi Electric is now shipping over 100k ONU’s a month.

Japanese Broadband Subscribers - Delta

Korea Telecom (KTC) and Hanaro Telecom (HANAD) are both likely to go with GE-PON, having announced partnerships with Corecess, a Korean equipment manufacturer. In addition, ETRI, an extremely influential and capable Korean government sponsored research facility has thrown their support behind GE-PON. ETRI was responsible for the widespread success of ATM and DSL in Korea. However, little FTTH deployment has taken place in Korea at this time.

The leadership of GE-PON in Korea is particularly notable given the strong historical preference Korea has for ATM technology, and the fact that B-PON and G-PON are very ATM like in their predictable performance.

Chunghwa Telecom (CHT), the dominant carrier in Taiwan, has selected GE-PON.

In short, the technological leaders outside of China are solidly in the GE-PON camp. It is difficult to forecast a scenario that reverses this trend. This brings us to what is happening in China.

Continue reading part III

Companies Mentioned
KT Corp (NYSE KTC [ADR]) (Korea Telecom)
Broadlight – Private
Chunghwa Telecom (NYSE CHT [ADR])
Hanaro Telecom (NASDAQ HANAD [ADR])
Verizon Communications (VZ)
Motorola Inc (MOT)
Tellabs Inc (TLAB)
Hitachi Ltd (NYSE HIT [ADR])
Optical Solutions (acquired by Calix) – Private
Alcatel (NYSE ALA [ADR])
Broadlight – Private
Flexlight – Private

Nippon Telegraph and Telephone Corp (NYSE NTT [ADR])