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Fiber Access NetworksFiber Access Networksandand

The GPON StandardThe GPON Standard

David ClearyVP, Advanced TechnologyCalixdavid.cleary@calix.com

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Meeting Overview

AgendaThe Need for Fiber AccessThe Choices of Access NetworksThe GPON StandardThe Market Opportunities for GPON

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Meeting Overview

AgendaThe Need for Fiber AccessThe Choices of Access NetworksThe GPON StandardThe Market Opportunities for GPON

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The Need for Fiber Access

It’s all about Bandwidth!!!Video will drive Bandwidth for the foreseeable futureBandwidth usage doubles every 18 to 24 monthsMPEG4 offers some relief (18 to 24 months?)

How Much Bandwidth is enough?Probably more than you think.

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The Need for Fiber Access

What is special about Fiber Access?Fiber is fundamentally different from copperWe are at the limit for bandwidth over copper Double the bandwidth and halve the reach

We are decades away from any limitations on fiber We are at 2.4 Gbps today Fiber can support over 100 Terabits per second without reducing

the reach

Eventually, every operator will deploy fiber...It’s just a matter of time

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Meeting Overview

AgendaThe Need for Fiber AccessThe Choices of Access NetworksThe GPON StandardThe Market Opportunities for GPON

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The Choices for Fiber AccessThere are 2 choices for Fiber Access:

Point to PointPoint to Multi-point

Point to Point is sometimes called Active EthernetPoint to Multi-point is called PON (passive optical network)

PassiveSplitters

ONT#192ONT #1ONT #1ONT #1ONT #1

...

PONOLT

ActiveEthernetSwitch

ONU#192ONT #1ONT #1ONT #1ONU #1 ...

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The Choices for Fiber Access

PassiveSplitters

ONT#192ONT #1ONT #1ONT #1ONT #1

...

PONOLT

ActiveEthernetSwitch

ONU#192ONT #1ONT #1ONT #1ONU #1 ...

PON is analogous to wireless telephony (cellular)Active Ethernet is analogous to wireline telephony

Both CapEx and OpEx cost savings favor PON

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Meeting Overview

AgendaThe Need for Fiber AccessThe Choices of Access NetworksThe GPON StandardThe Market Opportunities for GPON

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The Challenge

Low VolumeSmall Customer poolHigh customer influence

Edge/Core NetworkEquipment

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The Challenge

High VolumeEnormous Customer poolLow customer influence

ConsumerEquipment

Edge/Core NetworkEquipment

Low VolumeSmall Customer poolHigh customer influence

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The Challenge

ConsumerEquipment

High VolumeSmall Customer poolHigh Customers influence is desired

Edge/Core NetworkEquipment

Access NetworkEquipment

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Developing the Standard

The first step to writing a standard is to choose the Standards BodyThe 2 primary players for networking standards are:

IEEE (Institute of Electrical and Electronics Engineers)ITU (International Telecommunications Union)

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The IEEE

IEEE well known Protocols802.3 Ethernet802.11 WiFi802.16 WiMAX

IEEE Membership is diverseSystem vendors, chip vendors, optics vendors, industry cunsultants and academia

IEEE VotingEach member gets one voteNo limit to the number of votes from a given company

“Personality” of IEEE standards reflect interests of VendorsOften leads to low-cost solutionOften only hits 80% of marketOften doesn’t produce migration strategy

IEEE standards don’t necessarily reflect Operator Preferences

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The ITUITU well known Protocols

SDHV 5.2ISDNVoIP protocols H.248 and H.323

ITU MembershipMembership controlled by ITU Member-CountriesMembership open to Operators, Institutions, and Vendors

ITU VotingVoting is through consentEach company get one voteCompanies can object (but can’t stall process)

“Personality” of ITU standards reflect interests of OperatorsAddresses the operator requirementsAddresses the operator constraintsAddresses the service provider’s operational modelsNot focused solely on low costDuration of Standardization Process relatively short

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The ITU and FSANIn the late 1990’s a “Clandestine” group of operators was formed:

Objective: “Global Domination of the Fiber Access Market”The group called itself FSAN

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The FSAN Committee

FSAN stands for Full Service Access NetworkLoosely affiliated with the ITUDevelops all PON standards prior to submission to the ITUFSAN membership consists of both operators and vendorsBut operators make all final decisionsMembership of vendors is tightly controlled by FSAN Operators

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NTT

KT

SingTel

Telstra

BellSouth

Bell Canada

AT&T

VerizonQwest

ChunghwaBezeq

FT

BT

DTAG

TI

Eirecom

KPN

Telia

Malta

Telefonica

SwissCom

FSAN Operators represent a world-wide membership

TelusKuwait MOC

Sprint

The FSAN Operators

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FSAN OAN-WG membersFSAN OAN-WG members OperatorsAT&TBell CanadaBellSouthBritish TelecomDeutsche Telekom France TelecomKorea TelecomKuwait MOCNTTQWESTSprintTelecom ItaliaTelstraTelusVerizon

VendorsAdtran LucentAlcatel MitsubishiAlphion MotorolaBroadLight NECCalix NortelConexant Novera OpticsECI Telecom OFN / OkiEntrisphere LG ElectronicsFlexLight Optical Zonu Freescale SamsungFujitsu SiemensHitachi TellabsHuawei TerawaveIamba Vitesse Infineon ZTE

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Meeting Overview

AgendaThe Need for Fiber AccessThe Choices of Access NetworksThe GPON StandardThe Market Opportunities for GPON

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The Market Opportunities for GPON

There are Numerous Market Opportunities for GPONLower OpExGreater Service OfferingFuture-proof investment

The real question is When and Where does it make economic sense to deploy GPON

The quickest application appears to be the Developer Market and ‘Smart FTTH’ Communities

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Total U.S. Homes Served by FTTH

322,700

1,335,000

1,011,000

671,000

213,000146,500

78,00064,70038,00022,50010,3505,500

0

500,000

1,000,000

1,500,000Se

p-01M

ar-02

Sep-02

Mar

-03Se

p-03M

ar-04

Sep-04

Mar

-05Se

p-05M

ar-06

Sep-06

Mar

-07

Source: 2007 RVA

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138,500

78,000

453,000

376,000

241,000188,700

5,500 10,350 22,50038,000

64,700

174,000

0

100,000

200,000

300,000

400,000

500,000

600,000

Source: 2007 RVA

Homes Served by FTTH by Non-Verizon Service Providers

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436,000

882,000

0 200000 400000 600000 800000 1000000 1200000

RBOCs

All Other ServiceProviders

Breakdown of Homes Served:RBOC versus Non-RBOC FTTH

Source: 2007 RVA

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0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2004 2005 2006 2007 2008 2009

BPONGPONEPON/GePonActive/P2P

FTTH Homes Marketed By Architecture

Note: 2006 Forecast (2007 Forecast not yet available)

Source: 2006 RVA

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Competing for Developers

New home developments have become the fastest growth Fiber-to-the-Home market

Master planned communitiesMulti-tenant buildingsResort communities

New service providers (developer integrators) are competing in this market against incumbents

Innovative and fast moving companiesStrong IP and project management experienceStrong ties to the developer and builder community

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Overview of the Developer Market

FTTH is now highly desired by Developers

FTTH communities are most prevalent in:West Coast (California, Las Vegas)Southeast (Florida, etc.)

U.S. integrators expanding intoCaribbeanLatin America

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U.S. Developer FTTP Market Size

1.5 million new homes per year are built in U.S. Source: U.S. Department of Commerce

50% are managed by Associations Source: U.S. Housing Census.

Half of these communities will deploy FTTP

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Who is the Competition?

Over 50 companies are now acting as developer integrators in the United States and the Caribbean

Many have formed partnerships with specific developers for all their projectsMany companies specialize in security or ISPsVery low overhead organizationsIn most cases these integrators out source one or more of their services

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Why Developers Choose Integrators

Developers want recurring revenue streams

Incumbents are perceived as unwilling to share revenue with developer

Incumbent telcos are seen as inflexible

Incumbents are perceived as not delivering newer service offerings

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What is Required to Compete?

Minimal requirementsFiber-to-the-Premise architectureDiverse video channel selection (IPTV or RF) News, movies, sports, etc

Voice (TDM or VOIP)High speed internet 10 Mb+

Additional offeringsHome networking and supportSecurity systemsVideo on demandCommunity/member web siteVideo doorman and camera integration

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Closing remarks

ICT Infrastructures are best delivered with GPON and FTTH technologies

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The Power of SimplicityThe Power of Simplicity