Passive Optical Fiber To Grow 310 Percent By 2008

The race by worldwide telecommunications carriers to roll out passive optical network (PON) fiber is creating a boom in the market with shipments jumping 310 percent from $525 million in 2004 to $2.2 billion in 2008, according to a report from Infonetics Research.

While the rollout of PON in Asia continues to be the strongest, U.S. carriers are picking up speed rapidly. Japan's NTT is leading the market currently and in the U.S. both Verizon Communications is using PON in its fiber deployment.

"The biggest player in the world right now is NTT," said Michael Howard, Infonetics principal analyst, in an interview. "Asia got 92 percent of passive optical network sales last year."

There are several different versions of fiber being deployed and Howard noted that Verizon is installing Fiber to the Premises (FTTP) directly into homes and SBC is installing Fiber to the Node (FTTN). SBC is not using PON in its deployment, he noted. "It's going to take Verizon a lot longer for FTTP," Howard said. "It's much quicker for SBC to roll out fiber to the node."

FTTP stretches directly into homes while FTTN reaches near homes, typically serving 400 to 600 homes, which are connected over existing copper lines. Verizon is faced with a more difficult task and expects its fiber to reach 3 million homes this year while SBC's easier-to-install FTTN, is expected to serve 18 million homes in 2007, Howard said.In his study, Howard breaks PON down into different varieties, and he focuses largely on the older business passive optical network (BPON) and Ethernet passive optical network (EPON.)"

He noted that the Ethernet version is being rolled out so rapidly in Japan that it will take over the old base this year. Further out, Howard expects most of the world's PON subscribers to switch to Gigabit Ethernet versions. "North America accounts for just 6 percent of total PON subscribers now, but will grow to 23 percent by 2008," Howard said in a statement. "Asia took in 76 percent of worldwide PON revenue in 2004, followed by North America with 20 percent. We project that in 2008, Asia Pacific will make up 39 percent of worldwide PON revenue, North America 43 percent."