About 80% of the PON equipment revenue generated in 2014 was taken up by Huawei Technologies Co., Ltd., ZTE Corporation, Alcatel-Lucent S.A., and Calix, Inc, reports Transparency Market Research (TMR) in a new study. These companies have consistently dominated the PON equipment scenario, thus creating a highly consolidated market.
TMR states that a lot of the player focus is also driven towards GPON equipment because the GPON structure presents several advantages over the EPON structure as well as multiprotocol transport support. EPON technology, however, still offers a more cost-effective solution for many regional players in emerging economies.
Asia Pacific is currently a hotbed of activities in networking and connectivity,” states a TMR analyst. “China and India especially are showing a very high demand for passive optical networks. India for instance is planning to introduce OFC connectivity between all its villages. The spread of dark fiber across the Indian network is set to generate significant opportunities for regional and global players alike.”
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China is currently going through a very high adoption rate of electronic devices, thereby creating high volumes of data being transmitted across networks. This high volume data traffic is actually causing users to switch from their currently wireless modes to wired – specifically optically wired – networks.
A key restraint on the proliferation of PONs globally is the high cost associated with the operators’ side components. GPON, the more developed technology set, comes at a very high initial cost, but can prove to be beneficial and less expensive over time. Fiber trenching also requires a high capital investment and takes up a large chunk of a service provider’s total investment.Although cost recovery is possible, it can currently occur at a very slow pace, which is making several players reconsider PON implementation.