Service Provider Technology
By Stephanie Gibbons 21 Feb 2019
10G PON is ramping up, leading to declining ASPs at the component and equipment levels. NeoPhotonics's sale of its access product line to APAT Optoelectronics Components (APAT) represents a win-win: NeoPhotonics can exit the low-margin PON market and focus on higher speeds, while APAT, based in China, can strengthen its PON technology and product portfolio.
Although China's consumption of PON equipment is down slightly from the record-high levels of 2015, China has still consumed more than 80% of total OLT shipments this year. China is also dominating consumption of next-gen PON equipment, using 10G PON to support 1G bandwidth offerings and smart city initiatives. Large 10G EPON contracts have been issued by both China Telecom and China Unicom.
Optical component vendors face constantly declining ASPs, but in the access market, especially when dominated by China's consumption, the price pressures are severe. Ovum's OC FTTx Forecast Spreadsheet: 2015–21 includes annual ASP declines of 10% and greater for next-gen OLT optical components, but this may be too low if China continues to dominate consumption.
NeoPhotonics's sale of its access business – its lower speed business – allows it to focus on higher speed products. These higher speed products include those that support the growing data center market. The higher speed datacom optical module ASPs are at multiples compared to lower speed PON optics, even though their volumes are significantly lower. On a rolling four-quarter basis ending 3Q16, China consumed 7.2 million OLTs and more than 85 million ONTs/ONUs. Even slightly lower ASPs at the optical module level would lead to significant savings at the equipment level, with possible savings passed on to telcos.
Neophotonics's sale of its access business will enable it to focus more on its higher speed product lines while providing APAT, based in Shenzhen, with more resources to support China's continued appetite for FTTx PON.
Market Share Report: 3Q16 FTTx, DSL, and CMTS, TE0006-001317 (December 2016)
Market Share Spreadsheet: 3Q16 FTTx, DSL + G.fast, and CMTS (Revenues), TE0006-001313 (December 2016)
Market Share Spreadsheet: 3Q16 FTTx, DSL + G.fast, and CMTS (Units), TE0006-001312 (December 2016)
"In Ovum FTTx OC forecast, next-gen PON will offset China's maturing network builds," TE0017-000071 (September 2016)
OC FTTx Forecast Spreadsheet: 2015–21, TE0017-000070 (August 2016)
"Broadband access equipment market to remain strong in 2016," TE0006-001191 (February 2016)
Broadband Access Equipment Forecast (PON, xDSL, CMTS): 2015–21, TE0006-001186 (February 2016)
Faster Payback Will Drive Next-Gen PON Market, TE0017-000059 (December 2015)
Julie Kunstler, Principal Analyst, Intelligent Networks and Components
Service Provider Technology
By Daryl Schoolar 07 May 2019
The first standards-based 5G networks have gone live with commercial service offerings. The reviews, however, have been less than flattering. A web search of reviews shows such common themes as patchy coverage, speeds are fast but not 10 times faster than LTE, the device has a hard time holding onto the 5G signal, and few devices are available.
Service Provider Technology, Enterprise Decision Maker
By Chantel Cary 21 Sep 2018
Telecoms technology vendor ZTEsoft has rebranded as Whale Cloud following investment from Alibaba Group. Leveraging Alibaba's cloud and AI capabilities, Whale Cloud has launched d-BEP, a cloud-native BSS product.
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