2020 proved to be a watershed year in the broadband industry. Beyond the already growing demand for streaming applications, the current pandemic caused a shift in usage patterns as both consumers and enterprises quickly shifted to remote applications for all facets of daily living. Although the initial surge of bandwidth has settled down back into a new normal, it became clear to network operators that the need for reliable and sustained higher bandwidth has become an imperative for consumers.
Network operators around the globe have been transitioning from a copper to fiber network for the nearly 20 years in support of growing bandwidth demand. Although GPON has been the preferred FTTH technology with shipments supporting more than 700 million subscribers globally through the end of 2020, deployment strategies have quickly shifted in favor of 10G PON networks.
Enter 10G PON
In just the past year, demand for 10G PON systems has surged, with shipments increasing nearly 50 percent (from 2.3 million OLT ports to 3.4 million OLT ports) from the previous year. As shown, annual GPON OLT shipments are in decline, as operators in many markets shift their spending towards 10G PON.
XGS-PON is the favored technology by most operators, as it is designed to operate over the existing GPON ODN (including fibers, splitters and cabinets) in order to protect past investments. With the introduction of coexistence elements and the combo/universal blades, supporting both GPON and XGS-PON simultaneously, operators can upgrade on a per-customer (per-ONT) basis as service triggers arise. This upgrade scenario offers operators the opportunity to prolong the equipment lifecycle and position the network for any migration scenario to support any business need and any service type.
If we use history as our guide, we note that GPON standards were finalized in 2003, but it took nearly a decade for volume shipments to occur. However, it should be noted that there were few applications (i.e Netflix did not start streaming services until late 2007, by 2010 it has more streaming subscribers than DVD), that required more bandwidth than could be provided by copper-based services. XG-PON was approved in 2009 and began deployments in China during 2014. XGS-PON was approved in 2016, with early deployments beginning in 2018, but now just beginning to see volumes accelerate. In short – an average of 5 years from standards approval to initial deployment and 8 years to volume deployment.
10G PON provides operators the ability to offer more speeds and services – particularly symmetric service offerings. This opens the door for an expanding addressable market in support of business/enterprise as well as providing reliable connectivity for such critical applications as remote education and remote health, and support for remote work scenarios. Additionally, 10G symmetrical fiber networks can be used for mobile backhaul/fronthaul as well as the aggregation of remote access node traffic in support of accelerating 5G mobile service deployments.
Perhaps, its most important feature is the fact that 10G is the first technology that provides operators the ability to deploy a converged architecture – a unified network for both business and residential services – offers a number of advantages. This includes the ability to simplify network technology and deliver unified domains between Access, Transport, Edge and Core. Furthermore, it enables an operator to converge all services -- such as residential, mobile, business and more -- onto one network. This converged network ultimately spreads network infrastructure costs across all customers, from cost-sensitive home and SOHO subscribers to SLA driven corporations and enterprises.
Work has been in progress on the next generation of PON systems for the past few years. This includes the 2020 approval of the IEEE 802.3ca 25G/50G EPON standard which supports one or two wavelengths of 25G. It also allows for co-existence of GPON with 25G PON or XGS with 25G PON by leveraging the same base technology. The ITU, however has chosen to focus on a single channel 50G solution rather than 25G. The ITU G.hsp.50Gpmd will support 50G/50G (expected to be in next version), 50G/25G and 50G/12.5G (downstream/upstream) configuration. In addition, it will leverage the existing ODN and will offer coexistence with GPON and XGS PON.
Why 50G over 25G?
Although 25G seems like a reasonable next step - considering the timeframe from standards approval through initial deployments and given the growing range of high bandwidth applications - there is strong belief that the step to 25G will simply not be enough of a change to warrant a shift in network deployments or the investment cycle; especially when 10G PON will be able to support the majority of applications through at least the middle of this decade.
At the end of 2020, the 25GS-PON MSA was formed to promote and accelerate the development of 25 Gigabit Symmetric Passive Optical Network technology. The 25GS-PON MSA has released its own specification that has based its optical specification on the EEE 802.3ca EPON standard with a Transmission Convergence (TC) layer that is an extension of XGS-PON. The MSA Group believes this interim step is necessary to “close the gap” between 10G and 50G PON. Trials are expected during 2021, with deployments starting in 2022.
The 25G PON solution does allow operators to utilize this solution to offer true 10G symmetrical services, as well as support x-Haul transport for 5G’s increased cell density and capacity requirements. And while high-performance applications such as cloud computing, big data applications, artificial intelligence and machine learning certainly would leverage the extra bandwidth – it does remain unclear whether PON would be preferred over a point-to-point solution.
Furthermore, there are other considerations. First, is that the industry, particularly the Telecommunications industry prefers to work with standards. Even though many of the participants in the MSA will continue to support the ongoing standards work of the ITU 50G specification, this splintering affects everyone, particularly with respect to optical component development (of which has been limited on 25G) and the cost reductions that come with volume deployments.
But herein really lies the truth. 10G PON is just getting started. We’ve had nearly 20 years of GPON that will remain a suitable technology for a large proportion of the population. The incremental next step for most operators will likely be from GPON to 10G PON – enabling 4x the bandwidth. Considering that the average broadband speeds for most consumers remains well below 1Gbps – there remains significant growth opportunity. 10G PON – delivered via combo OLT cards – will certainly provide sufficient bandwidth for the majority of users for the next 5-7 years.
The next logical upgrade cycle will be the introduction of 10G/50G PON combo cards, but this is not expected until the middle of this decade. While 25G makes sense in some limited use cases, the key word here is “limited”. There is currently very limited demand for 25G and most of those applications can be cost effectively served by point to point solutions.
In all 3 Global Service Provider Surveys on 10G PON Deployment Strategies conducted by Broadband trends over the past 3 years - the ability to deploy a converged architecture supporting multiple applications and segments has been the #1 driver for greater than 60 percent of operators deploying higher speed PON networks. This was followed by support for multi-gigabit (2-5Gbps) residential services. These drivers have remained unchanged.
While predicting the future is difficult, we know that new applications and services will continue to drive the need for higher bandwidth. We also know that we are currently at the very beginning of the 10G upgrade cycle – which should last for the next 5-8 years. Given these facts, the logical next step will be 50G. And with continued R&D, 50G will reach a reasonable cost per bit long before the market is ready for its deployment.