Ovum: PON Grows to Include Wireless Backhaul and Smart Grid

  • PON
  • Smart Grid
  • Wireless Backhaul
LONDON - A sea change is taking place in the passive optical networking (PON) industry, according to analyst firm Ovum, which sees the industry's focus shifting from speed to new applications and network diagnostics and management. Once used exclusively for fiber to the premises, PON now enables wireless backhaul and smart power grids as well.

Because PON is becoming universal for many services running on multiple types of networks, its technical requirements are expanding. According to Ovum, PON component vendors must add functionality such as synchronization for wireless networks and UART (universal asynchronous receiver/transmitter) for managing power grids. Meanwhile, the baseline functionality for PON is still expanding, along with pressures to continually lower costs.


These new applications are significant enough to repay the cost of learning new markets, designing and producing new components, and broadening marketing, sales and support teams. Ovum estimates that sales of mobile backhaul equipment will grow from $5.8 billion to more than $7.5 billion between 2010 and 2016, with components representing $0.7 billion in 2016. In addition, PON-based backhaul is a good fit with the trend towards small cells.

The smart power grid market opportunity is also very large. If smart power grids covered all households in China, approximately 380 million premises would need a PON optical network terminal. At an estimated $5 per chip, this one PON component segment represents a $1.9 billion opportunity just in China.

Multiservice Home Gateways
Service providers are seeking integrated home gateways that will lower costs while supporting connectivity for the digital home. For an integrated PON home gateway to support a smart energy home alongside home-based femtocells, PON traffic management capabilities will need to address quad-play and machine-to-machine communications and handle a variety of different quality-of-service requirements.

At the central office, to meet service providers' needs for network diagnostics and optical layer management, vendors are designing optical time domain reflectometry solutions that can fit into PON OLT optical modules. Though this concept is not new, according to Ovum, true commercial solutions are very new. Service providers are also trying to lower the power consumption of the active equipment in central offices even though PON already saves power by using passive components in the field.

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