Multi-gig PON 101: Q&A with Dell’Oro Group

Fierce’s Multi-gig PON 101 Q&A series digs deep into the high-speed future, aiming to help readers build in-depth knowledge about key technologies and the overall market landscape through progressive interviews with industry experts. This collection will delve into the forces driving operators toward multi-gig PON technology; how XGS-PON and other 10G technologies are helping deliver a new breed of ultra-fast broadband; and what’s coming down the pipe with 25G and beyond.

This week's interview features Jeff Heynen, VP of broadband access and home networking at market research firm Dell’Oro Group. The interview transcript has been lightly edited.

Fierce Telecom (FT): Why are operators interested in pursuing multi-gig PON? Is it consumer/usage driven or more of an opex story?

Jeff Heynen, Dell'Oro Group

Jeff Heynen (JH): Operators are beginning to deploy multi-gig PON across both their residential and enterprise footprints. The pandemic showed operators and subscribers just how critical broadband service is and so operators are making sure they have networks capable of reliably delivering the services and applications they know about as well as those that are inevitable in the future. From a competitive standpoint, multi-gig PON helps ensure they have an advantage over other operators who may be topping out at 1 gig today, but have a clear technology path towards their own multi-gig offerings.

Though the usage levels might not be driving the need for multi-gig accessibility today, average broadband consumption growth rates continue to increase, both on the upstream and downstream sides. So, having a multi-gig service in place ensures there will be no challenges when consumption does reach those levels.

FT: How can multi-gig PON technologies be applied in the network? Are they residential only, or can they be used for other things?

JH: Multi-gig PON is extremely versatile and allows operators to really take advantage of the fiber networks they have built out for residential, enterprise, and mobile transport networks. The primary application will be for residential broadband services, but we are also seeing some deployments of XGS-PON for 5G transport as well as enterprise services. The growing use of combo cards and optics also makes it much easier for operators to move forward with multi-gig PON because they now have a path all the way from 1G to 25G and potentially beyond using the same equipment and optical distribution network (ODN).

If an operator can continue to use the same ODN equipment and simply increase the bandwidth offered by changing the optics at the optical line terminal (OLT) and optical network terminal (ONT), then they are far more likely to expand their reliance on PON throughout their access networks.

FT: Who are the major players in the multi-gig PON vendor space?

JH: The major multi-gig equipment suppliers are Nokia, Adtran, Calix, Huawei, ZTE, Fiberhome and Dasan Zhone.

FT: What 10G technology is gaining the most traction out of XG-PON, XGS-PON and NG-PON2? How quickly is 10G uptake forecast to grow?

JH: XG-PON and 10G EPON were first out of the gate in China. However, XGS-PON is the technology that has more global appeal and will have a much larger geographic reach. We expect that XGS-PON equipment revenue will expand from $1.1B in 2021 to $4.3B in 2025.

RELATED: Spending on 10G PON equipment skyrocketed 500% in Q1 – Dell’Oro

FT: Cable operators already have a path to 10G through DOCSIS 4.0. How do they view multi-gig PON technology? Is it making them rethink their future network strategy at all?

JH: I believe cable operators do see multi-gig PON as a competitive threat – one they haven’t faced in a number of years. This is why they are currently upgrading their DOCSIS 3.1 networks with mid- and high-splits, so they can resolve one of the architectural limitations of DOCSIS, which is limited upstream bandwidth.

Those efforts buy them some time so they can also prepare their outside plant for DOCSIS 4.0, whether in the form of Extended Spectrum DOCSIS (ESD) or Full-Duplex DOCSIS (FDX.) Both technology options will maintain their competitiveness with telco multi-gig PON deployments. But it will come with more costs than they have borne with previous technology upgrades because of the need to move the outside plant to 1.8GHz. Because of that requirement, we have seen smaller cable operators begin to overbuild with fiber for their residential networks. This is also the case with a few larger operators like Altice and Virgin (U.K.) which had already made the strategic decision to gradually migrate to fiber over the course of many years.

Nevertheless, the largest cable operators will continue to move down the path towards DOCSIS 4.0 and will begin deployments in late 2024 and 2025, which will keep them competitive with fiber offerings for some time.

FT: There’s been some buzz lately about 25G PON. What’s your take on this? Is this technology ready for prime time?

JH: When it comes to large-scale residential deployments, the next step is 10G, primarily with XGS. I don’t believe there will be operators who will leapfrog 10G in their residential networks to 25G. That will not be the case in certain enterprise and 5G transport applications, where an operator might skip 10G altogether and go from 2.5G GPON or Ethernet to 25G multi-point connections.

I believe 25G is ready and will be used by operators for enterprise services and for 5G transport. At this point, I think it remains too expensive for residential networks – and probably overkill for all but the very heaviest of users. At some point, the costs will come down and make it feasible for residential deployments. Until then, we expect to see a growing list of operators using the technology across their 5G transport networks and to deliver enterprise connectivity.