SAN JOSE, CAÂ — Rising demand for bandwidth-intensive triple-play content has strained legacy communications networks and caused infrastructure bottlenecks. A new report from Global Industry Analysts says service providers addressing these bottlenecks by upgrading their access networks to PON will drive global demand for PON equipment to $7.62 billion by 2015.
North America and Asia will continue to be the most favorable markets for PON equipment during the next five years, the report says. Large-scale deployments in China, as well as increasing GPON deployments across the world, are allowing providers to offer new services such as broadband TV.
Service providers are increasingly turning to PON as the next-gen residential broadband access technology, predominantly in areas where DSL penetration has reached maturity and providers are seeking to increase average revenue per user. Although GPON technology is gaining momentum in North America and Europe, the predominance of EPON in China restricts growth prospects for GPON in Asian markets. In coming years, revenue growth for GPON equipment will be challenged as the industry’s focus shifts to more advanced 10GEPON and WDM-PON technologies.
In spite of double-digit revenue increases for global GPON manufacturers during Q1 2009, the growth rate for the overall PON market eroded due to declines in EPON and BPON revenues. PON revenue forecasts are slightly down as key service providers become more cautious about upgrading their networks until they regain confidence about subscriber uptake of high-broadband services. On the other hand, service providers such as NTT, Verizon, Hanaro and KT, which had already allocated resources to fiber rollouts and upgrades, will continue with their plans, hoping to gain a strategic advantage.
Demand for PON equipment in Asian markets such as Korea and Japan are encouraged by government regulations; in the United States, significant demand for PON equipment will come largely from local telecom operators. The global PON equipment industry is expected to grow strongly in all regional markets, with developing markets of Asia-Pacific poised to score the highest gains. In terms of equipment categories, strong opportunities for growth are in the fiber-to-the-home PON equipment sector.
