FTTH deployments to grow over 32pc in '09

NEW YORK, USA: Despite the global economic slump, the number of households with fiber-optic network connections will grow by more than 32 percent worldwide in 2009.

The rate of FTTH connections will continue to grow at rates close to 30 percent a year through 2013, when the number of fiber-connected households will reach nearly 130 million globally, according to a major new report from Heavy Reading, the market research division of Light Reading.

'FTTH Review & Five-Year Forecast: The Road to Next-Gen PON', provides a comprehensive global view of the ongoing transition to fiber to the home (FTTH). The report analyzes the prospects for existing and new technology, focusing in particular on the likely lifetime of existing PON technologies and the prospects for their replacement or augmentation by next-gen PON technologies.

Graham Finnie, chief analyst, with Heavy Reading and author of the report, said: "FTTH deployments continued to make strong progress in 2008 and early 2009, despite the economic downturn, and prospects for continued growth through 2010 look good. Last year, more than nine million homes were added to the FTTH total, and in 2009 we expect that total to increase by almost nine million again, to reach 47 million homes worldwide at the end of the year."

Progress in FTTH rollouts varies widely, creating the scenario for a significant deployment gap between regions and countries, Finnie notes. "Some countries, notably China, are making a big leap forward, while others, such as France, have seen disappointing delays to ambitious rollout plans," he says.

"These variations will also occur at the national level, creating some dilemmas for regulators and politicians. Already, a ten-year gap in fiber development has opened up between fiber-heavy countries such as Japan and European nations, including Germany and the U.K. -- and this gap could widen."

Key findings of FTTH Review & Five-Year Forecast: The Road to Next-Gen PON include the following:

The number of households connected directly to fiber will grow from about 36 million at the end of 2008 to 129 million at the end of 2013. This would represent roughly 7.8 percent of all households worldwide -- a compound annual growth rate of about 29 percent.

Asia will continue to account for a large majority of FTTH deployments over the next five years. The number of fiber-connected households in Asia will grow to almost 85 million by the end of 2013. About 23 million will be in the Americas, with the majority in the U.S.; while about 24 million homes will be connected across Europe, the Middle East, and Africa (EMEA), with very wide variations within this territory.

Most vendors report only modest impact on FTTH buildouts from the economic downturn so far. However, views are mixed: Some suppliers report business down by as much as 40 percent year-over-year, while others report little or no impact.

The effect of the economy has been fragmentary, with buildouts by major telcos such as Verizon unaffected, but it is having a clear impact on Tier 2 US telcos and incumbents in some other countries, as well as competitive telcos elsewhere. Municipal fiber deployments seem largely unaffected, and there are hopes of an upsurge in activity resulting from government stimulus programs.

Cable MSOs could become important providers of FTTH in the next few years. Cable operators are examining a variety of approaches, and one in particular -- RFoG -- will likely lead to widespread cable-deployed FTTH in the next five years. This development, however, is still at an early stage.

Because GEPON is now the technology of choice in Japan and several other leading Asian countries, it will continue to dominate global FTTH deployment over the next few years. However the future of FTTH will be strongly influenced by developments in China -- which will become by far the largest FTTH nation by the end of 2011 -- and it remains unclear whether the major Chinese telcos intend to switch from GEPON to GPON.

GPON will dominate in the US, since it is being used by both the major ILECs and many independent telcos. GPON is now by far the most widely deployed FTTH technology in the U.S., partly because it is primarily used by telcos that want to provide triple-play services and often are using the RF capability that is part of the GPON standard.