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Summary

Adtran has developed a new approach to tunable optics, known as subscriber edge tunable (SET) for PON, giving NG-PON2 a chance to win early adopter customers seeking bandwidth flexibility and resiliency. By diminishing the gap between high-cost tunable optics and the low-cost expectations for PON equipment, Ovum expects to see Adtran NG-PON deployments with a few aggressive service providers in 2017.

Expect Adtran to ship NG-PON2 to Verizon and others soon

First, a look at the optics gap that Adtran is closing. Current NG-PON2 ONT optics prices are over $1,000, compared to XGS-PON optics prices of around $100 and GPON ONT optics prices of under $10. Although volume orders will bring down prices, the XG-PON2 cost is prohibitively high even for business and enterprise applications. If Adtran's SET approach can reduce NG-PON2 optics by 50-60%, then NG-PON2 is likely to be deployed, initially for mobile backhaul (MBH) and many enterprise applications.

Next, Adtran was selected by Verizon as one of two vendors to advance to final lab trials of NG-PON2. Consequently, initial deployments are likely by Verizon and other service providers in 2017. Verizon is seeking a long-term PON technology that supports growth, wavelength flexibility, and backwards compatibility with FiOS. In addition, FiOS is already supporting business services including MBH; NG-PON2 will be able to cost-effectively support growing bandwidth demand for multiple customer segments.

Verizon is not alone in its interest in NG-PON2. During Adtran's Connect event, Ovum had the opportunity to speak with several city, county, and regional operators in North America. Their plans were consistent: they want NG-PON2 as soon as the prices are a reasonable multiplier to XGS-PON. XGS-PON is a good solution, but NG-PON2 provides the ability to add wavelengths easily and to support high-ARPU applications while supporting 1G today and 10G residential in the near future.

While Adtran's NG-PON2 SET is still in the early test phase, Ovum believes that Adtran has already investigated manufacturing and scaling processes either internally or with optics partners. Bottom line: NG-PON2 will begin in 2017, and expect Adtran's name to be attached to many announcements from more than just Verizon.

Appendix

Further reading

Faster Payback Will Drive Next-Gen PON Market, TE0017-000059 (December 2015)

"Vodafone converges its fixed and mobile networks on TWDM PON," TE0006-001099 (July 2015)

"Energia signals that TWDM PON has moved to field-testing," TE0017-000047 (June 2015)

"TWDM PON, and fast FTTx network monetization, is on the horizon," TE0006-000953 (October 2014)

Author

Julie Kunstler, Principal Analyst, Components and Intelligent Networks

julie.kunstler@ovum.com

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