Author Stephen Hardy
Editorial Director and Associate Publisher
Worldwide demand for PON gear should enable sales of FTTx optics to follow last year’s record-breaking performance with even better results in 2015, market research firm Ovum asserts in its newly released “OC FTTx Forecast Spreadsheet: 2014-20.” Revenues for such optics, which include optical transceivers as well as bi-directional optical sub-assemblies (BOSAs), should surpass $1 billion this year, Ovum predicts.
Sales in 2016 might dip slightly but remain strong, Ovum believes. The company currently forecasts FTTx optics revenues for next year at $985 million.
“Numerous positive factors are driving the FTTx optics market to new levels, including FTTH network deployments by China Mobile and the continued network builds by China Telecom and China Unicom,” says Julie Kunstler, principal analyst in Ovum’s intelligent networks and components team and the report’s author.
Outside of China, Ovum points to strong growth from FTTx network deployments by cable operators, Google Fiber’s expansion, and broad US telco deployment plans as revenue drivers in North America. Ovum also expects to see continued deployments in Europe and the Middle East, as well as small deployments in South and Central America and Africa. Overall, Kunstler notes in the report a general movement across the board from copper-based access infrastructures toward FTTP and FTTH.
This is of course good news for manufacturers of transceivers and BOSAs for PON equipment. For example, Ovum expects total optical line terminal (OLT) optical module deployments will reach 6.5 million in 2015, an increase of 19% versus 2014. On the optical network termination (ONT) side, transceiver/BOSA shipments should to exceed 71 million in 2015, an increase of 18% from 2014, Ovum says.
While interest appears to be growing in next-generation 10G and WDM PON technology, optics for such equipment will remain a fairly small slice of the market, Ovum believes. Next-gen OLT transceivers, for example, will represent just over 12% of the total OLT transceiver market in 2020, with 10G EPON OLTs the largest segment. Similarly, next-gen ONT transceivers and BOSAs will take up just over 9% of the total market in 2020, with 10/1 and 10/10 EPON ONTs the largest application segment.
Despite the overall good news, Ovum’s Kunstler notes that there are some opportunities that remain largely untapped. For example, the forecast doesn’t assume any major deployments in such heavily populated countries as India, Brazil, and Indonesia. “Large deployments in these countries would provide a significant uptick to the units forecast and consequently to revenues,” Kunstler notes, “as would faster deployments of next-gen PON because the ASPs for next-gen PON optics are higher than those for non-next-gen.”