Passive Optical Network Sales To Soar 1,260% By 2008: Report

Passive optical network (PON) use and sales will experience a phenomenal, four-digit growth spurt over the next three years, according to a new report from Infonetics Research.

The firm's new PON equipment market share report predicts that the PON subscriber base will soar an 1,260% from 1.5 million last year to over 20.5 million in 2008. The expansion of the customer base will be matched by sales, and Infonetics expects worldwide optical line termination (OLT) and optical network termination (ONT) PON port shipments to grow from 1.7 million to over 8 million and revenues to rise from $525 million to $1.9 billion in the same period.

Hitachi is the worldwide PON market leader, with a stronghold in Asia pacific, which accounts for 76% of PON revenues. North America currently accounts for 20% of revenues, but Infonetics says that will change radically by 2008, when the American market will command 40% of revenues, compared to 38% in Asia. Tellabs is the leading PON vendor in North America, while Motorola leads in Europe, the Mediterranean and Africa and Alcatel in the Caribbean and Latin America.

"PON is growing rapidly in Asia Pacific, especially Japan, where over 2 million subscribers are already using BPON and EPON," Infonetics Research principal analyst Michael Howard said in a statement. "In comparison, PON is just beginning to take off in North America, as Verizon gets into high gear, quickly passing the deployment rates of IOCs and local governments. Worldwide PON revenue will get an 84% jump start between 2004 and 2006, with a major chunk coming from NTT and Verizon."

While broadband PON (BPON) accounted for 81% of North American and 75% of Asia Pacific revenues, Infonetics notes it is losing traction to Ethernet PON (EPON) and gigabit PON (GPON), a variant that operates bandwidths of one gigabit per second and higher. Infonetics expects GPON to be the ultimate technology winner. BPON's share of worldwide PON OLT revenues will drop from 77% in 2004 to 41% in 2005 this year, while EPON will jump from 19% to 53% in the same period.