Great Success of FTTx Applications Represented by PON in the Past Decade
The last ten years saw fiber to the x (FTTx) technology, whose most typical application is passive optical network (PON), become enormously successful in fixed broadband access scenarios. A recent report from the research firm Omdia showed that compared with 10 years ago, global FTTx users had increased 10-fold to more than 830 million by the end of 2021, accounting for 62.86% of all the fixed broadband (FBB) users worldwide. Omdia data also indicated that gigabit passive optical network (GPON) shipments had reached 60 million OLT ports by Q1 2022, making GPON a common choice for operators building access networks because it enables operators to deliver 100 Mbps speeds on a mass scale.
The Era of 10G PON Has Arrived
The development of PON applications and technologies is pushing bandwidth demand to gigabit speeds. As its standard and industry chain mature, 10G PON has emerged as the best technology choice for operators deploying gigabit networks to meet the requirements of a new broadband era.
Research shows a doubling of network bandwidth can lead to 0.3% growth in gross domestic product (GDP). Considering the important role of network modernization in promoting economic development, many countries have launched their national broadband initiatives in recent years. Having previously built the world's largest fiber to the home (FTTH) network, China launched a dual-gigabit plan in 2018 to provide gigabit broadband through both 5G and fixed networks. It plans to build 100 gigabit cities and sign up to 30 million gigabit users by 2023. In South Korea, gigabit services were activated as early as 2014. By 2018, gigabit users already accounted for half of the user base of some operators in South Korea. The European Union's gigabit initiative calls for gigabit access to be made widely available in places like schools, enterprises and public institutions by 2025. Based on the EU initiative, some European countries have launched their own gigabit plans.
The explosive growth of Internet applications in recent years has led to users' increasingly higher requirements for service awareness and experience. At the same time, the emergence of bandwidth-intensive services like high-speed Internet access, cloud computing, the Internet of things (IoT), high-definition (HD) video, and HD monitoring also demands higher bandwidth.
Big video services represented by 4K, 8K, virtual reality (VR) and augmented reality (AR) currently account for the vast majority of ultra-broadband applications. Broadcasts of the PyeongChang 2018 Winter Olympics, Tokyo 2020 Summer Olympics and Beijing 2022 Winter Olympics already began to use 8K technology. According to a report from the Broadband Development Alliance, VR service requires at least the bandwidth of 100–300 Mbps, while 8K VR necessitates a bandwidth of 500 Mbps at a minimum.
As one of the main forms of home entertainment, gaming is presenting drastically higher demand for bandwidth. With its market expanding, gaming is also witnessing drastic improvements in quality. Currently, a 3A game can reach 65 GB in size. While it takes 178 minutes to download such a game with 50 Mbps bandwidth, only nine minutes are needed if gigabit bandwidth is in place. The burgeoning cloud gaming service also imposes high requirements for networks. A 1080p 60 frames per second (FPS) cloud game requires at least 200 Mbps bandwidth. Games are also gradually becoming part of social media, which further increases the demand for bandwidth.
The Covid-19 pandemic spurred the rapid development of long-distance services, making home office and online education integral parts of everyday life. By 2027, the global online education market will grow at a compound annual growth rate (CAGR) of 8.2%. The CAGR of fully digital workplaces will even reach 21.5%. According to the Broadband Development Alliance's analysis, cloud office and enterprise cloud services require a bandwidth of 100-200 Mbps. These developments indicate that high bandwidth will be a long-term requirement for home networks.
Enterprise applications are another driving force for 10G PON deployment. By 2025, 85% of enterprise applications are expected to be deployed on the cloud, which will bring about a huge increase in bandwidth demand. The 10G PON all-optical access network can deliver a symmetric bandwidth of 100 Mbps to 10 Gbps and provide low network delay and zero packet loss required by enterprise cloudification. The network can also implement redundancy protection. When a link fault occurs, communications can be switched over to a functioning link, thereby ensuring high reliability of cloudified dedicated line service.
The introduction of each generation of network technology is an opportunity to reshape the market landscape. In addition to driving economic growth and meeting the bandwidth demand of future services, 10G PON can also help operators boost competitiveness and get a head start in market competition.
—Improving user experience and consolidating market share: 10G PON ensures user bandwidth can be upgraded from 50–100 Mbps to 500–1000 Mbps. Gigabit bandwidth meets the peak bandwidth requirements of multi-device and multi-service operation to deliver the ultimate network experience to users. Gigabit networks are also the foundation of value-added services (VASs) like smart home, gaming, cloud office, and cloud storage. VASs boost user loyalty and average revenue per user (ARPU) by further satisfying diverse user needs and bettering user experience.
—Signing up new users and increasing market share: The history of communications has shown that the emergence of a killer service can lead to explosive growth in bandwidth demand. High ARPU users are usually the first to try such services and to do so, they have to select network operators who offer the services. By rapidly deploying gigabit networks to provide users with popular bandwidth-hungry services, operators vastly increase their revenue. 10G PON deployment can also improve the price/performance ratio of broadband packages and hence attract more users.
The Next 3–5 Years Will Witness Large-Scale Deployment of 10G PON
Generally, a technology begins commercialization 2–3 years after the finalization of its standard and starts large-scale commercial deployment after a further 2–3 years. Both 10-gigabit-capable passive optical network (XG-PON) and 10-gigabit-capable symmetric passive optical network (XGS-PON) technologies have entered the massive deployment stage. Because the 10G PON industry chain, which covers equipment, optical modules and chips, has matured, 10G PON deployment is actually accelerating globally. Some countries like China have already reaped benefits from broadband initiatives and are using the successes to drive the deployment of 10G PON. 10G PON construction in China, which makes up a large chunk of the global broadband market, will further bring down 10G PON costs and serve as a good example for other regions. Globally, the next 3–5 years will be the window for large-scale deployment of 10G PON.
50G PON is the Choice of Next-Generation PON After 10G PON
High bandwidth is becoming a basic requirement of networks, and the application of PON technology is expanding from home broadband to industry sectors such as telemedicine, smart manufacturing, and mining communication. As a result, networks not only should provide more bandwidth, but also need to reach higher standards in terms of latency, packet loss, jitter, quality of service (QoS) and user experience. The International Telecommunication Union - Telecommunication Standardization Sector (ITU-T) considered the requirements of multiple application scenarios, and on that basis, drafted the requirements for next-generation PON. It decided to focus on 50G PON, whose single-wavelength rate is 50 Gbps, in its exploration of next-generation PON technologies. In 2016, the ITU-T started to formulate the single-wavelength 50G PON standard. In February 2018, the ITU-T selected 50G PON instead of 25G PON as the next-generation PON technology after 10G PON. In the second half of 2021, the ITU-T published the first version of the 50G PON standard. The time before 50G PON is put into commercial use is the window for massive 10G PON rollout. With the already highly mature 10G PON industry chain, operators should seize the opportunity presented by the window to deploy 10G PON and come out on top in the market reshuffle, because 10G PON can be migrated to 50G PON and coexist with 50G PON in the same ODN.