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1 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
2 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Agenda
Market Challenges
End User Applications and Traffic Model
Broadband Access Technologies
FTTX Deployment: Economic Considerations
Case Studies
Operators’ Experience
Q&A
Survey
3 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Market ChallengesBroadband Services
Access networks must evolve to support these services
High Speed Internet(HSI) Business
Access
FutureServices
Gaming, PC video, and
music streaming
Service Sophistication
Net
wor
k Im
pact
Blended ServicesBroadcast TV, HDTV, VoD, VoIP, P2P, ITV
Best Effort High AvailabilityIncreased Bandwidth
Low LatencyHigh Stability
Real time services require:Continuous monitoringAdvanced diagnostics
Increased QoS
4 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
North America Consumer Internet, PB per yr
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2006 2007 2008 2009 2010 2011
PB
per
yr
Internet Video to TV
Internet Video to PC
VoIP
Video Communications
Gaming
P2P (60%-70% video)
Web, email, file transfer
Total Video (incl 60% of P2P) ~ 19800 PB
Market ChallengesUS IP Video Traffic Volume Growth Estimates
US IP video traffic is expected to grow to over 20K PB/yr, or ~ 60% of the total IP consumer traffic, by 2012:
Video traffic is the main driver behind the Internet traffic growth of ~ 50% per yr, trending down to ~30% by 2012*
Video-to-TV accessibility will grow from 6% to over 50% (users)
60-70% of P2P traffic will be video
•Source: Alcatel-Lucent, Cisco, CIBC World Markets Corp and IDC, Emerging Media Dynamics,2008.
North America represents ~ 32% of Worldwide traffic, and US ~90% of NA.
Video communications will become important in the longer term-range (2012-2015)
5 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Market ChallengesIPTV Subscriber Growth
HS InternetTier 2
High Def
Standard DefStandard Def
TV 1
HS InternetTier 1
TV 2DVR 1
DVR 2
Data
20Mbps
StillMoreData!!
HSITier 3
MoreData
Standard Def TV 3
100+Mbps
50Mbps
High Def
Exponential growth!
Bandwidth per subscriber
(with MPEG-4)
Traffic Model
7 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Traffic ModelBroadband Applications
0.0640.064Emergency Communications0.3842Conference Video0.3842Video Telephony0.0640.064Conference Audio0.0640.064Telephony
Inter-personal communication
2020Premium Internet Service - Tier 3520Premium Internet Service - Tier 225Premium Internet Service - Tier 1
0.3842Best Effort Internet ServiceInternet Access0.3842Multiplayer GamingGames
00.128Music On Demand, PodcastMusic00.128Radio on demand00.128Live Streaming AudioRadio08VOD - HDTV08Broadcast Video- HDTV (H.264)019Broadcast Video- HDTV (MPEG-2)TV/Video HD
0.3842Streaming Video02Broadcast Video- SDTV (H.264)02VoD - SDTV04Broadcast Video- SDTV (MPEG-2)TV/Video SD
Upstream Peak (Mbps)
DownstreamPeak (Mbps)
Application NameCategory
8 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Traffic ModelKey Parameters
VoIP Parameters
Codec & BW
No of lines/HH
VoIP take rate
Voice calls/BH
HSI Parameters
BW/HH
HSI take rate
Concurrency rate
Stat Muxing factor
Video Broadcast Parameters
IPTV Take rate
No of SD channels
No. of HD channels
SD video codec
HD video codec
No of STBs/HH
% of active STBs/HH
% of active STBs changing channels simultaneously
% of active STBs using PVR
Channel change burst rate
VoD Parameters
VoD Take rate
No. of VoD assets
% of SD content
% of HD content
SD VoD Codec
HD VoD codec
Concurrency rate
Local server hit rate
Popularity curve parameters
9 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
2006 2007 2008 2009
30
25
20
15
10
5
0
Mb/
s
SD= standard-definition TV
HD= high-definition TV
HSI= high-speed Internet access
Introduction of VDSL2 bonding with bonding capable CPE
ASDL2+ bonding with bonding capable CPE, or VDSL2
Traffic ModelBandwidth Needed for Triple Play
SD
HD
HSI
HD
OH
SD
HD
HSI
HD
OH
SD
HD
HD
HD
HSI
OH
SD
HSI
HD
OH
SD
Service mix may vary and include, e.g. VoIP or all-SD with faster Internet service
Second HD channel typically to support concurrent home PVR recording
Assumes quality of picture competitive with digital satellite/cable
BB Access Technologies
11 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Broadband Access Technologies
Wireline Cable (HFC)
ADSL2+, VDSL2
GPON, EPON
Point-to-Point and Active Ethernet
Wireless CDMA (1xEV-DO rev A)
GSM (GPRS/EDGE)
UMTS
HSPA
WiMax
LTE
12 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Cable ArchitectureHeadend
The Basic Coax Based
CATV Network
Headend
The Basic HFC Based
CATV Network
CM
DOCSIS
Optical Rx/Tx
IPTelephony
Server
HFC
InternetInternetInternet
CMTS
NCS
PSTNPSTNPSTN
MTAMTA
Amplifier
Splitter
Subscriber Tap
Fiber Node
CMTS = Cable Modem Termination SystemNCS = Network based Call Signaling Protocol
MTA = Multimedia Terminal AdapterCM = Cable Modem
13 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Bandwidth Capacity of Today’s Cable Plant (with 500 Homes/Fiber Node)
Current cable plant may not be able to support the downstream BW needs over 5 years Incremental steps are needed to meet the demand, e.g.: Analog channels reclaim
Switched digital video
Node splits
Bandwidth expansion
DOCSIS 3.0
MPEG-4
Downstream Channel Capacity and Need
0
20
40
60
80
100
120
140
160
Today Future
6MH
z R
F C
han
nel
s
HSIA channels DS
HD BroadcastChannels
SD BroadcastChannels
Analog Channels
VoD channels
Channel Capacity
6 MHz RF channels with 38.8 Mbps capacity
750 MHz system can carry 117 downstream channels
Average 500 homes/fiber node (NA)
14 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
DSL
CO-Based ADSL2+ or VDSL
Distance limitation
Outdoor cabinets ADSL2+
VDSL
Bonded DSL
CO DSLAM
Remote DSLAM
Small DSLAM
Remote DSLAM
MDU
MDU
CO or Street
Cabinet
MDU = Multi-Dwelling Units
15 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Evolution of DSL Speeds
ADSL
VDSL
HDSL
ISDN
xDSL
V.26V.27
V.29 V.33V.34 V.34
V.90voice-band modems
ADSL2
ADSL2+
VDSL2100 Mb/s
2006
0.001
0.010
0.100
1.000
10.000
1000.000
1965 1970 1975 1980 1985 1990 1995 2000 2010
year
do
wn
stre
am r
ate
[Mb
/s]
16 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
1 2 3 4 Loop Length (km)
VDSL2
ADSL2+
ADSL2
ADSL
SHDSL
RE-ADSL2
8
3
11
24
50Mbps
100Mbps
VDSL2
DSL Reach vs Bit Rate
FTTB VDSL2offering up to 100Mbps symmetrical
Cost effective alternative for Ethernet CAT5
FTTN VDSL2Up to 50Mpbs
Most cost-effective OSP solutionin overbuild (reuse copper plant)
17 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
00
10
20
30
40
50
60
70
80
90
100
km
Per
cen
tag
e o
f C
us
tom
ers
Rea
ched
Source - IEEE
1 2 3 4 5 6 7
Italy
U.K.
Germany
India
U.S.
Sweden
Distance from CO to Subscriber
Subscriber Loops
18 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Averagereal
Conditions
DISTANCE ADSL ADSL2 ADSL2+VDSL2 PON/P2P
% subscriber from CO
(FTTN) (FTTU) (Europe) (NA)
Theoretical
Bandwidth 8 13 24 >50 >100
(Mbps)
0.5 km(1.7Kft) 8 10 18 32 >100
1 km (3.3Kft) 8 9 16 26 > 100 20% 10%
3 km (9.9 Kft) 7 7 9 - > 100 78% 38%
6 km (19.8Kft) 1 2 2 - > 100 97% 87%
Only a limited subscriber base can be served from the CO with DSL technology
Triple Play is Challenging CO-based Deployments
•Reference?
19 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
FTTN Considerations
Benefits
Provides target bandwidth with VDSL/VDSL2
Lowest CAPEX for evolution to next generation access, using existing copper assets
Street Cabinet DSLAM
Ethernet Switch(CO)
VDSL2
Need to determine optimal cabinet location and size
Challenges
Requires new IP/Ethernet DSLAMs
Civil work
Opex
Regulations for FTTN unclear
Upgradability
CO OSP
20 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
FTTN Deployment
*1 @ $300/site -- 10% change in cost/sub
Central Office / Co-Lo Access to unbundled loops High Density / Low Power
CO / CLECCO / CLECRegional CenterRegional Center
Remote Terminal Indoor or Outdoor
configurations Environmentally Hardened
for OSP ONU Host Applications
Fiber In the Loop via ONU Fiber deeper into the network Shorter Distances / Higher
Bandwidth Small / medium concentration
of Multi-service Subscribers
21 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
FTTN - Several Scenarios
CO Outside Plant (OSP) Homes
VDSL
VDSL
ADSL2+
splitter
ADSL2+
VDSL
GPON
+ DSLFTTN
FTTN
FTTN+ FTTH
splitterGPON
VDSL
FTTB
splitterGPON
VDSL
FTTC
+ FTTH
Cover short loops from the CO
Cover the rest with OSP deployment
Long loops
GPON for greenfield; VDSL for brownfield
GPON for greenfield;
VDSL for brownfield or when riser is an issue
Lower expected BW/sub
22 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Edge Routing
IP service termination Per-service QoS IPTV multicast routing Flexibility for DHCP and PPPoE for HSIA present mode of operation
Components of a Triple Play Services Delivery Architecture
SR
Aggregation
Ethernet aggregation Per-sub, per-service QoS Subscriber profile IGMP proxy Security Reliable Layer 2 forwarding model
Services and Servers
HSIA DHCP Policy Radius AAA
Home/Business RGs TR-069 Voice Data Video
Access
FTTN IGMP proxy/Multicast Security QoS VDSL2/ADSL2+
Internet
ESSVPLS/HVPLS
BRAS
IPTV
Internet
DHCP server
PPPoE
DHCP
IPTV
Phone
RG
SoftSwitch
SIP
IPTV
FTTN
SR – Service Router ESS – Ethernet Service Switch FTTN – Fiber-to-the-Node RG – Residential Gateway
23 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
FTTH
Passive Outside plantEthernet-only transport
In-band video Standardized form available today
Ethernet P2P – DF
100 Mbsper sub
IEEE 802.3ah EPON
EthernetSwitchOLT
Opt power splitter
t128.5 Mbps
per sub1 GbpsEthernet-only transport
In-band video Standardized form available today
tn
Ethernet Switch
100Fx
Active Outside plantEthernet-only transport
In-band video Standardized form available today
Ethernet P2P -AON
Active SwitchN x 1 Gbpsor 10 Gbps
100 Mbsper sub
Ethernet Switch
ITU G.984 GPON
Multi-serviceswitch OLT
t1 33.4-66.8 Mbps/sub
1.2 or 2.4 Gbps down,155 - 2488 Mbps up
Native protocol transport using GFP/SDH
In-band video Standardized form available todaytn 3.8-60.4 Mbps/sub
ITU G.984 BPON
ATM switch
Opt power splitter
t1 15.7-31.6 Mbps/sub1.2 G or 622 Mb/s down
Separate RF video overlayATM-only transport
Standardized form available todaytn 3.9-15.6 Mbps/sub
155/622Mb/s up
25.7 Mbps/sub
24 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Gigabit Passive Optical Networking (GPON)
Passive splitters used to share a single fiber among subscribers
Full downstream bandwidth is available dynamically to any endpoint, at any time
Upstream bandwidth is allocated to endpoints
No electronics in outside plant
Wavelength Splitter/Combiner
Optical Line Terminal (OLT) 1490nm l
1310nm l
Optical Network Terminals (ONTs)
SubscribersPros
Virtually unlimited bandwidth
Future proof investment
Standardized technologies
Optical components and fiber prices have been reduced substantially
Improvements in installation practices
Challenges
Investment in fiber for the last km
Choice of technology and topology
Regulations unclear (EU promoting open network model)
25 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Typical GPON Network Architecture
1,490 nm
1,310 nm
Central Office
Typically up to 20 km (28 dB)
Voice , data, and video
PassiveOutside Plant
2.5 Gb/s
1.2 Gb/s
splitters points
Single fiber infrastructure for all services(voice, data and video)
1,550 nm to support local CATV service If required
Application Servers
(voice, video, data
Edge Switch
OpticalLine Terminal
Single family homes
Multi-dwelling units
Small/medium enterprisesIP/MPLS
26 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
RF Overlay for Video with GPON
PROS
More than 4 Gigabytes of equivalent broadcast video on a separate wavelength No set-top boxes required for analog video
Instant compatibility with in-home coax and TV sets
Proven technology with economies of scale
CONS
No IP convergence
Limited differentiation from existing cable service
Overlay network for video transport must be deployed
OLT
OutdoorONTs
Voice
BusinessONTs
Multi-dwellingONTs
Class 5voice
splitters
20 km
2.5 Gb/s
1.25 Gb/s
IPTVInternet
IP/MPLS
VPLS
ManagementSystem
VoiceGW
EDFARF
Video
WDMESS
OLT
OutdoorONTs
Voice
BusinessONTs
Multi-dwellingONTs
Class 5voice
splitters
20 km
2.5 Gb/s
1.25 Gb/s
IPTVInternet
IP/MPLS
VPLS
ManagementSystem
VoiceGW
EDFARF
Video
WDMESS
27 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Optical Patch Panel
Outside Plant Splitter Cabinet
Distribution Cable
Drop CableFeeder Cable
Fiber Splice Closures
Optical Taps
Optional Video Amplifier
Optical Line Terminal
Optional Video Coupler for RF overlay
Optical Network
Terminals
Typical GPON Components
Central Office Passive Outside Plant (OSP) Subscriber Premise
28 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
GPON: Bandwidth Allocation
GPON LT
GPON OLT
Central Office Primary Fiber Flexibility Point Drop
1.25G Sustained + 1.25G excess BWbandwidth flexibility
up to 1Gbps
GPON LTGPON LT
1:32-64 split
Residential Triple Play • 2HDTV+1SDTV 20Mbps for each 64 subs
• Represent 1.25Gbps Sustained Bandwidth
• Remains 1.25Gbps Excess Bandwidth
• Dynamic Bandwidth Allocation: Excess can be allocated instantaneously to anyone
User Bandwidth flexibility ++100 Mbps
Residential Triple Play • 2HDTV+1SDTV 20Mbps for each 64 subs
• Represent 1.25Gbps Sustained Bandwidth
• Remains 1.25Gbps Excess Bandwidth
• Dynamic Bandwidth Allocation: Excess can be allocated instantaneously to anyone
User Bandwidth flexibility ++100 Mbps
100MBps Fixed BW
1:24 split
2.5G Fixed Allocate BW
29 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
GPON: Different Scenarios for Network & Subscriber Growth
GPON LT
GPON OLT
Grow
th
Central Office Primary FFP Drop
1 fiber 8 fibers
8 fibers
GPON LTGPON LT ducts
8 fibers
8 fibers
1 fiberImproved
penetration
1 fiber
New areabuild out
8 fibers
•FFP = Fiber Flexibility Point
30 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
PON Evolution Options
PON Evolution towards 40G…
2.5 GPON
TDM: 10G PON
CWDM:4 x 2.5 GPON
4 x 10G PON
•1
•10
•100
•0 •1 •2 •3 •4 •5
•Downstream Wavelengths
•Total PON downstream Bandwidth (Gbps)
...with TDM and WDM
Backwards
Compatible
More capacity to
existing ONTsONTs
Reuse splitters
or ONT filtersOSP
High DensityMore
TransceiversDensity
Maintained
or increased
Better link
budgetReach
DL & UL
increase
DL
increaseCapacity
TDM:10GCWDM: 4
31 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Point-to-Point and Active Ethernet
Best of Both Worlds Passive OSP
CO scalability & Consol. (20+ km)
Fiber Cost & Management (P-to-MP)
Cost-effective Fiber Feeder Few fibers in feeder section
Smaller duct sizes, Less RoW,…
CO consolidation
Efficient Outside Plant Small street/pole cabinet
No remote powering
Less maintenance, truck rolls,…
Best of Both Worlds Passive OSP
CO scalability & Consol. (20+ km)
Fiber Cost & Management (P-to-MP)
Cost-effective Fiber Feeder Few fibers in feeder section
Smaller duct sizes, Less RoW,…
CO consolidation
Efficient Outside Plant Small street/pole cabinet
No remote powering
Less maintenance, truck rolls,…
Point-to-
Point
ActiveEthernet
Ethernetswitch
Central Office Access Loop Home/MDU
IP
IP
Ethernet switchEthernetswitch
Splicing
CPE
CPE
32 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
PON vs Optical Ethernet
CPE
CO CPE
CPE
CPE
CO CPE
CPE
SW
CPE
CO CPE
CPE
Dedicated linksDedicated linksShared medium
Medium CAPEXLow CAPEXHigh CAPEX
Maximum upgradabilityMedium upgradabilityPoor upgradability
Low OPEXHigh OPEXLow OPEX
Cheap interfaces (standard
Ethernet)
Cheap interfaces (standard
Ethernet)
Expensive PON interface (optics
and electrical)
More fiber
2N transceivers
Less fiber
2N+2 transceivers
Less fibre
N+1 transceivers
PassiveActivePassive
Point-to-Point EthernetActive Ethernet
Optical EthernetPON
33 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Broadband Access Technologies
Base Station
PDSN
Base Station
PCF
Cache
Server
DHCP
NMS DHCP Server
Local Cache Server
Internet
AAA
•CDMA 2000 EVDO Rev A
Base Station
SGSN
Base Station
BSC/RNC
Cache
Server
DHCP
MS DNS DHCP
Internet
GGSN
HLR VLR
BSC = Base Station Controller (GSM)
RNC = Radio Network Controller (UMTS)
GSM/UMTS
PCF = Packet Control Function
PDSN = Packet Data Server Node
34 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Evolution of 3GPP Radio Rates Peak Network Data Rates
1
10
100
1000
10000
100000
GPRS EDGE WCDMA HSPA HSPA+ LTE
Technology
kb
its
/se
c
UL
DL
Actual user rate will be substantially less, depending on many factors:
Fixed vs mobile
No. of simultaneous users
Distance from BTS
Channel conditions
Fixed wireless can prove in in certain cases vz wireline
Services definition (especially BW) different from wireline
35 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Home Networking
Several Wiring Situations
Coax
Twisted pair
Wireless
Several choices of Layer 1 Technologies
MoCA (Multimedia over Coax)
HPNA (HomePNATM – Home Phoneline Networking Alliance)
HomePlug (networking over in home power wiring)
Unlicensed Wireless
NID
Garage Bed Rm #1 Bed Rm #2 Bed Rm #3
Bed Rm #4Study Family Room
X
Voice
IPTV+Data
NID
Garage Bed Rm #1 Bed Rm #2 Bed Rm #3
Bed Rm #4Study Family Room
X
Voice
IPTV+Data
36 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Home Networking Technologies
MoCA
29 channels, 25 Mhz steps, 800-1500Mhz (860-950Mhz common)
LAN throughput of 100-135Mbps could be typical (can get as low as 50Mb/s)
In the upper reaches of CATV spectrum (above 860MHz)
Coexists with analog and digital channels on CATV
HPNA
Works over Coax or twisted pair to provide a LAN of 128-320Mb/s
Will not coexist with upstream of CATV
HomePlug
Leverages existing AC wiring to create a 200Mb/s LAN (150 Mbps usable throughput)
Doesn’t impact anything on coax or twisted pair
Good for instances where coax isn’t readily available (Europe)
Inherent problems with noise immunity
Unlicensed Wireless (e.g. 802.11n)
Not a contender for whole house video because of reliability and spotty coverage
2450
950
860
54
950
–2
450 Mh
z8
60
–9
50
M
hz
54-8
60 M
hz
Mhz
SatelliteDownstream
OpenSpectrum
CableDownstream
CableUpstream
5 –
42
Mh
z
2450
950
860
54
950
–2
450 Mh
z8
60
–9
50
M
hz
54-8
60 M
hz
Mhz
SatelliteDownstream
OpenSpectrum
CableDownstream
CableUpstream
5 –
42
Mh
z
•MoCA Spectrum
FTTX Deployment: Economic Considerations
38 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Fiber to the Most Economical Point
Provide DSL and FTTH solutions for triple play
Deep fiber placement of ADSL2+ and VDSL2 using fiber-to-the-node (FTTN)
Deeper fiber placement using fiber-to-the-home (FTTH)
High-density placement using FTTB for multi-dwelling units (MDUs)
An optimized access solution for every deployment strategy
CO
FTTN
FTTP
MDU
CO – Central Office
MDU – Multiple Dwelling Unit
FTTN – Fiber to the Node
FTTP – Fiber to the Premises
39 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
FTTN/FTTH: Network Cost Components
Fiber Flexibility Pointwith Splitters
Central Office with GbEEthernet Aggregation
Fiber Feeder
Copper or Fiber (point-to-point) Distribution
Copper or FiberDrop
CLE / CPE(ONT / ONU)
Fiber Feeder
IP DSLAM or Ethernet Switch
Ethernet Switchor DSLAMFiber Feeder
FTTN (active Ethernet or DSL)
PON
FTTB-MDU
Fiber Drop
FiberDistribution
TapFiber Drop
CO Electronics(e.g., PON OLT, DSLAMs, Ethernet switches)
Customer Located Equipment (e.g., PON ONTs, DSL modems, Ethernet media converters, residential GWs
Outside Plant (OSP)(e.g., FTTN systems, cabinets, splitters, drop boxes, splice closures, fiber taps, power supplies & batteries, power cables, power distribution)
OSP Labor(e.g., trenching, pulling, splicing, boring)
CO Labor(e.g., patching, inserting, testing)
Customer Premise Labor(e.g., wiring, connecting, testing, answering questions, PC set up)CLE / CPE
(NID or media converter)
Drop Cabling Wiring (e.g., fiber, CAT5/5E, copper).
NT or DSL Modem
40 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
FTTN vs FTTH : Typical Capex Breakdown
Typically 70% of Greenfield construction costs are in distribution cable, drop,
customer located equipment, and installation of these
F3 Distribution(Optional)
21.8%
Central Office0.3%
OSP Distribution17.0%
CLE/CPE28.6%
F1 Fiber Feeder1.6%
F2 Fiber Feeder2.6%
Drop28.1%
Distribution of FTTN Costs Distribution of FTTN Costs
F3 Distribution(Optional)
23.9%
Drop30.9%
F2 Fiber Feeder1.7%
F1 Fiber Feeder1.1%
CLE/CPE26.3%
OSP Distribution7.2%
Central Office8.8%
41 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
The main FTTH barriers are civil work & indoor cablingCivil work is 50-80% of the total cost. Indoor cabling is 150-300 Euro/sub
FTTN vs FTTH: High Level Capex Comparison
CAPEX (Index)
Ref = 1
FTTN VDSL
FTTHsingle homes
FTTH apart-ments
FTTB
ADSLCO
0
5
10
15
20
Civil works
Cabinet install
Access HW
CPE
Fiber
Home/MDU cabling
CAPEX comparison FTTH/B (Paris Case )
- 15%
- 15%
42 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
GPON – 2 levels of split – 64 usersGPON – 2 levels of split – 64 users Point-to-point – 64 usersPoint-to-point – 64 users
GPON = 2,5 less fiber connections per user
with HW (Patch Panel, Splitters) & labor (splice, test): GPON savings $$ per connected user
1:4
1:4
1
16
1
16
patch panel
patch panel
1:16
patch panel patch
panel
1:1 1:1
1:1
1:1
64 = 991616111 64 = 256646464
Cable to switch
Cable toswitch
FTTH : GPON vs Pt-to-Pt Ethernet
GPON = 3 to 4 times less fiber.km
CAPEX impact: Fiber ODF, space at PoP & Fiber cost ; OPEX impact: Right of ways & Fiber mgmt
1MDU16HH
CO
CO
43 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
GPON: Greenfield vs Overbuild
$0
$200
$400
$600
$800
$1,000
$1,200
Greenfield Overbuild
Outside Plant ConstructionExample based on the Cost of PON Facilities per Subscriber
Cost of Facilities Labor
Cost of FacilitiesMaterial
Primary cost of network construction is labor
On a cost-per-bit connected, system electronics is fairly comparable(same speed = same memory, same processing, same lasers)
Difference: 20-30%
44 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Cabling buildings with Fiber is a challenging task
Dwelling Type
Other
Single Family House: Detached
Single Family House: Semi-detached
Building (< 10)
Building (> 10)
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SP IT GER GR AU FR DK LUX PT NL BE UK IRL
0%
Importance of private owners and real estate companies for Fiber
Cabling methods progressing fast and well
• Indoor• Outdoor / façade• Infrastructure re-use
(power, gas, sewer,)
BUT some critical issues
- Landowner ascent
- Building protection
- Multi-operators?
- Access chambers
- Floor connect. box
45 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Micro-trenching
Traditional Cable Laying
Installation Complete
4 cables sitting on top of each other, each with 100 fibers. Each cable is about 10 cm high
Significant optimization advance for ‘last mile’ Optical Fiber networks
High cost reduction
Faster city planning approval
Less city surveyor overhead
Significantly less disruption
Significantly less man-hours labor
46 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Summary
FTTN-VDSL2:
Technology of choice in overbuild distribution provided loop lengths can be managed
Ideal in multi-dwelling overbuild situations where CAT5 does not exist or cannot reach
In overbuild : up to 50% cheaper than all other alternatives
• Key advantage versus FTTN/B Active Ethernet
• This advantage is negated in Greenfield situations (new facilities)
FTTU-GPON: Technology of choice in Greenfield distribution of 100Mb/s to single family residences
Advantages because of line rate, passive OSP, no-power, low-cost multiplexing deep into distribution network
Has financial edge in greenfield SFR applications due to speed and distribution gain
2.5Gb/s doubles capacity of 1.25Gb/s solution (EPON)
Splitting 2.5Gb/s in distribution is 32 times more efficient than dedicating single fibers to each user (P2P is no option)
Active Ethernet:
• Falls in-between
• Too expensive compared with FTTN-DSL in overbuild
• Less performing than GPON for greenfield
Case Studies
48 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Outline
FTTH architectures compared— Point-to-Point (P2P), Active Ethernet (AE), and Gigabit Passive Optical Network (GPON)
Input assumptions
Modeling Parameters
GPON vs P2P
Reference urban network
Capex/Opex modeling results
Sensitivity Analysis (Tornado, MonteCarlo)
GPON vs AE
Two cases: Re-use DSL OSP and deploy new OSP cabinets
Capex/Opex modeling results
Sensitivity Analysis (Tornado, MonteCarlo)
Summary and Comments
49 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Introduction
A detailed economic analysis of FTTH across a range of different scenarios and parameters assuming Triple Play services (Voice, Data, Video)
Three scenarios: multi-dwelling units (MDU), Single Family Residences (SFR) and Enterprise
Task based operations model
Point-to-
Point
ActiveEthernet
GPON
Ethernetswitch
Central Office Access loop Home
IP
IP
Ethernet switchEthernetswitch
PON OLT Optical splitter
IP
Splicing
ONT
CPE
CPE
50 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Traffic Assumptions
It is assumed that all FTTH technologies support current and short-to-mid term growth for
residential subscriber applications
High-level bandwidth requirements per subscriber used in the model
* Assumes max of 2 TV sets per home
Standard GPON at a 2.5Gbps line rate and a split ratio of 1:64 provides about 35 Mbps
(committed) per user
Active Ethernet switches are also configured to provide this bandwidth
384 Kbps2 MbpsGaming
64 Kbps64 KbpsVoIP
2.448 Mbps32.6 MbpsTotal
210 MbpsHigh-speed Internet Access
020 Mbps2 HDTV or 2 VoD (MPEG-4)*
Upstream BWDownstream BWService Type
51 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Customer Type: Single Family Residential Multi-Dwelling Unit Enterprise
Applications IP-TV Voice, HSI PTP, Business
Housing Density No of buildings/sq. km Loop length to CO/POP
Construction Greenfield Brownfield
Transport Facilities Fiber owned Leased
Outside Plant Aerial Buried Conduit
Drop Cat5/DSL Fiber
Splitting Levels One Two
Scenario Variables Technologies
GPON/EPON
-------------------
Pt-Pt Ethernet
-----------------
Active Ethernet
Fiber Cables: Feeder Distribution Drop
Civil Work (Feeder, Distribution): Structures/trenches Splicing, Installation
OSP costs Cabinet, Splitters Fiber Management Point Patch Panel
Power and Space Power node (Active) AC Floor space costs
Equipment CO (shelf, packs, SFP) ODF ONT CPE
Activation Truck roll to OSP Customer service visit Service activation in CO
Other Operation Costs Searching for POP Provisioning activities Maintenance activities etc
Cost Elements
FTTH: Key Modeling Dimensions/Parameters
52 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Example Study: Key Parameters
105 km2, 1.12 M HHP, 72K buildings
HHP=100% , Take Rate Varies (10-100%)
P2P : 80 Active PoP
GPON : 8 CO (Active), 200 Passive PoP
Civil Works = fiber cables, In-building
BW/sub ~ 35Mbps
P2P GPON (2-Tier)ODF1
Fiber
Trunk
ODF1
Splitters
Fiber
BH
ODF1ODF2
80 x P2P PoP
200 x FFP8 x GPON CO
Fiber Distribution
CPE ONT
Urban MDU Case: Reference Network Architecture
•Core
•Core
OLT
Ethernet Switch
16Fibres 4 Fibers
~ 16HH
1:4splice
53 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Distribution
Drop
P2P PoP
GPON FFP
(splitter)
Feeder
SecondaryFeeder
General OSP Modeling Assumptions
Assumes PoP and FFP located on
circumference of circle from CO
Assumes within each PoP and FFP
serving area—homes are also on a
circle
Actual number of FFPs/PoPs
depends on availability of real-
estate, street-layouts, density
etc; model is generic to study
effect of different parameters
Assumes existing civil structures
(e.g., sewers, ducts) are used
Focus on the differences
between the technologies; civil
works costs assumed to be the
same
PON Geographical Model
54 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
GPON-Tier 1 GPON-Tier 2 P2P
Urban MDU: Capex/sub
GPON 1-Tier saving = 11-15%
GPON 2-Tier saving = 14-20%
Take Rate (TR)
Cap
ex/s
ub
(euro
)
P2P
2-Tier GPON
1-Tier GPON
55 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
200
400
600
800
1000
1200
OSP Manpower Floor Space Buildingconnection cost
Fiber cost ODF related Active NE CPE (incl.installation)
Spares
Urban MDU: Capex/sub Breakdown (20% TR)
Key CAPEX differences are in OSP manpower, fiber cost, ODF, CPE
•Cap
ex/s
ub
(euro
)
P2P
2-Tier
GPON
1-Tier GPON
56 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Capex Breakdown at 20% Take Rate
ODF1
CPE
Ethernet
Switch ODF2Metro
Office
POP 4%MDU
splice
Fiber Distribution : 27%
9%MDU wiring:
38%
7%0.5%4%
Feeder: 0.5%
CPEMDU wiring: 48%
1:4
14%
1:16
splice
Fiber Distribution:37%
GPON
OLT ODF1ODF2 ODF1ODF2
CO
splittersplitter
2%
2%4.8%0.48%0.2%
Feeder: 1% FFP 0.3 %
P2P
GPON
0.2%0.02%
180
72K
72K
2008* Blue indicates # of units
57 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25%
ODF2 : Cost of patch panel per user {15}
Xconnect ODF/Active NE {8}
Cost to equip a POP office {15000}
P2P: CPE erosion per year {5%}
Passive POP: Cost per sq-m {2000}
Splitter: 1:16 {288}
Cost to test a fiber {8}
GPON: CPE erosion per year {5%}
Cost of splicing a fiber to patch panel {13}
ODF1 : Cost of patch panel per user {15}
Splitter: 1:4 {100}
Sewer-civil works cost per m {23}
P2P: CPE cost {60}
Active POP: Cost per sq-m {4000}
GPON: switch cost per sub {36}
P2P: switch cost per sub {90}
GPON: CPE price {140}
Fiber cost per m {0.02}
Urban MDU: Sensitivity Analysis— Capex/sub (GPON - P2P), 20% TR
0.01
210
45
2000
54
30
35
150
8
7
3 %
8
4
432
3000
8%
7500
4
0.03
70
135
6000
18
90
12
50
23
20
8 %
23
12
144
1000
3%
22500
12Capex Saving (GPON-P2P)/P2P
58 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
20
40
60
80
100
120
140
9%
10
%
11
%
12
%
13
%
14
%
15
%
16
%
17
%
18
%
19
%
20
%
21
%
22
%
23
%
24
%
25
%
26
%
27
%
28
%
29
%
Urban MDU: Monte Carlo (1000 iterations) — Capex/sub (GPON - P2P), 20% TR
Capex Saving (GPON-P2P)/P2P
His
togr
am F
requen
cy
59 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Opex Model Components
Unplanned Maintenance: Repair activity based on equipment quantities and typical FIT data
Operation Tasks included: Testing, Fault isolation, Equipment Repair (Truck roll)
Planned Maintenance: Calculated based on equipment quantity, maintenance interval and effort, equipment clustering and
location density
Fiber maintenance based on total length of cables and typical yearly per meter cost
Operation Tasks included: Battery replacement, Fan Filter replacement, Drive time and paperwork to document preventative maintenance, Fiber inspection/cleaning and debris removal
Centralized NOC Staffing: Surveillance staff estimated based on total number of active devices.
Operation Tasks included: 24X7 fault Monitoring, remote diagnostics, trouble ticket creation
Customer Care: Estimate based on failure incidence (calculated for unplanned maintenance) and # of customer
impacted/incident.
Operation Tasks included: customer care call handling
Differences in Customer Provisioning and Disconnect Scenarios: Cost of connecting/disconnecting a customer based on equipment locations and utilization
Disconnect cost based on churn rate that are hinged on the number of providers in sharing scenarios
Operation Tasks included: CPE installation, in-building fiber connection, POP/FFP connections, Testing, Inventory updates
60 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
50
100
150
200
250
300
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
GPON-Tier 1 GPON-Tier 2 P2P
Urban MDU: Opex/sub/ year
GPON has significant Opex/sub savings compared to P2P
GPON 2-Tier saving = 50-56%
GPON 1-Tier saving = 41-48 %
Opex
/sub
(euro
)
Take Rate
P2P
2-Tier GPON
1-Tier GPON
61 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
20
40
60
80
100
120
RoW Fibermaintenance
(planned,unplanned)
PoP floorspace
Powerconsumption
AC Activemaintenance
Othermaintenance
Customercare
Urban MDU: Opex/sub/year Breakdown (at 20% Take Rate)
Key difference between GPON and P2P are RoW charges (sewer ducts, per cable, building), floor space (active + passive), power and customer care
Opex
/sub
(euro
)
Note: Services operations costs not included
P2P
2-Tier GPON
1-Tier GPON
62 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
€ 887
€ 176 € 168
€ 996
€ 205
€ 388 € 388€ 388
€ 76 € 56
€ 568
€ 150
€ 288
0
500
1000
1500
2000
2500
SFR-GPON MDU-GPON 1-Tier MDU-GPON 2-Tier SFR-P2P MDU-P2P
OSP Manpower Floor Space Building connection cost Fiber cost ODF related Active NE CPE (incl. install)
Urban MDU vs SFR: Capex/sub
OSP manpower + fiber cost per sub lower for MDU
•Cap
ex/s
ub
(euro
)
63 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
GPON-Tier 1 P2P
Suburban SFR Study: Capex/sub
Assumptions: 20,000 HHP/ CO or PoP; Area = 10 km2, 10 FFP
GPON > P2P ~ 20-23%
GPON 1-Tier cheaper than P2P for an average sub-urban SFR case
Loop lengths are longer compared to MDU case benefiting GPON
•Cap
ex/s
ub
(euro
)
Take Rate
P2P
GPON
64 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
500
1000
1500
2000
2500
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
GPON-Tier 1 P2P
Suburban Study: Opex/sub•O
pex
/sub
(euro
)
Take Rate
Assumptions: 20,000 HHP/ CO or PoP; Area = 10 km2, 10 FFP
GPON savings compared to P2P~ 42-45%
P2P
GPON
65 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
GPON vs AE Study: Urban MDU
Scenario/Assumptions: The operator has deployed DSLAMs to provide ADSL/VDSL broadband access to
some end users
A number of fiber loops can be provisioned to provide FTTH access to users. Which technology is more economical to deploy Ethernet or GPON?
For Ethernet deployment:
o Ethernet card can be installed in existing (DSLAM) street cabinets
o Civil work for distribution network only (cabinet to sub) is included
o New fiber from cabinet to CO using existing civil work – only new fiber installation
o 4500 cabinets to cover an urban area
o Two Cases
Case 1: Reuse existing DSLAM shelf to install AE cards
Case 2: New OSP cabinets for AE – no DSL
For GPON deployment:
o Splitters installed in some of the street cabinets and OLT in the COs; 200 FFPs for GPON
o Civil work and fiber installation in the feeder and distribution network assumes mostly greenfield buried installation
66 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
500
1000
1500
2000
2500
3000
3500
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
GPON vs AE Case 1: Reuse Existing DSLAM Shelves - Capex/sub
Active Ethernet
2-Tier GPON
1-Tier GPON
For TR <50%, Active Ethernet Capex/sub is lower than 2-Tier GPON (~5%); 1-Tier GPON (~10%)
For high TR (>70%), GPON and AE have similar Capex/sub (better utilization of GPON OLT ports & splitters)
•Cap
ex/s
ub
(euro
)
Take Rate
67 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
200
400
600
800
1000
1200
OSP Manpower Building PoP Buildingconnection cost
Fiber cost ODF related Active NE CPE (incl.installation)
Spares
GPON vs AE Case 1: CAPEX Breakdown, 20% TR
AE
2-Tier GPON
1-Tier GPON
Active Ethernet saves on total fiber because of aggregation in the OSP cabinet
zero for AE
•Cap
ex/s
ub
(euro
)
68 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
20
40
60
80
100
120
140
160
180
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Active Ethernet
2-Tier GPON
1-Tier GPON
GPON vs AE Case 1: Opex/sub•O
pex
/sub
(euro
)
FTTH Take Rate
GPON 2-Tier saving = 5-58%
GPON 1-Tier saving only for TR > 20% (up to 50 % savings at 100%TR)
69 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
10
20
30
40
50
60
70
80
RoW (fiber) Fibermaintenance
(planned,unplanned)
Cabinethousing(RoW)
Powerconsumption
AC Activemaintenance
Othermaintenance
Customercare
•opex
/sub
(euro
)GPON vs AE Case 1: Opex/sub Breakdown –20% TR
Active Ethernet
2-Tier GPON
1-Tier GPON
For low TR (<20%) Active Ethernet and GPON 2-Tier are close
70 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
500
1000
1500
2000
2500
3000
3500
4000
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
GPON vs AE Case 2: New OSP Locations for FTTH – no DSL – Capex/sub•C
apex
/sub
(euro
)
Active Ethernet
2-Tier GPON
1-Tier GPON
Take Rate
GPON 2-Tier saving = 5-8%
GPON 1-Tier saving = 1-5 %
Additional capex to build OSP locations Capex includes new civil works cost
71 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
200
400
600
800
1000
1200
OSP Manpower Construction ofOSP cabinet
Buildingconnection cost
Fiber cost ODF related Active NE CPE (incl.installation)
Spares
GPON vs AE Case 2: Capex Breakdown –20% TR
P2P2-Tier GPON
1-Tier GPON
•Cap
ex/s
ub
(euro
)
Significant Expense for AE
AE still saves on total fiber because of aggregation in the OSP cabinet
72 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
50
100
150
200
250
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
GPON vs AE Case 2: Opex/sub•O
pex
/sub
(euro
)
Active Ethernet
2-Tier GPON
1-Tier GPONGPON 2-Tier saving = 37-58%
GPON 1-Tier saving = 25-50 %
Take Rate
Lower OPEX/sub favors GPON
73 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
GPON vs AE Case 2: Opex/sub Breakdown, 20% TR•o
pex
/sub
(euro
)
0
10
20
30
40
50
60
70
80
RoW (fiber) Fibermaintenance
(planned,unplanned)
Cabinethousing(RoW)
Powerconsumption
AC Activemaintenance
Othermaintenance
Customercare
Active Ethernet
2-Tier GPON
1-Tier GPON
Active Ethernet has higher Opex due to large # of active OSP elements (4500 cabinets for AE, 200 FFP for PON)
More points of failure, risk of vandalism
74 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Impact of Fiber Sharing - Assumptions
If the Primary Operator (operator laying the infrastructure) is GPON-based: provides the other operators (competitors leasing fiber) with fiber access at either the last mile drop, FFP or CO.
For e.g., if the Primary Operator deploys 2-Tier GPON in an MDU, w/ a splitter in the basement of the building and shares at the building, the other Operator (if GPON) installs a new splitter at the basement to connect to the customer
If the Primary Operator is P2P-based: always shares at the POP (a distinct fiber to each customer terminates only at the POP)
The other operators deploy their own equipment (ODF, splitter, Active NE etc.) at the site where sharing occurs and connect to the customer’s fiber.
It is assumed that the 3rd party operator pays leasing costs for fiber/space/co-location etc., but these tariffs are not modeled here.
The goal of the model is to compute “additional fiber capacity” needed to be deployed by the Primary Operator, and up to 4 PON/4 P2P
75 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Impact of Sharing Fiber Infrastructure
GPON LT 1
Operator A1x64 Splitter
Fiber Flexibility Point
PON 1
PON 1
Point to Point Ethernet
Operator A
Operator B
Operator C
PON operator A
Operator B1:64 Splitter
PON operator B
P2P operator C
Sharing at CO/POP
Sharing Drop Cable
How much additional fiber should Primary Operator deploy?
What is the impact on GPON vs. P2P economics?
Sharing at FFP
Operator A Splitter
Operator B Splitter
GPON LT 1
MDU
Share in-building wiring
76 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
2000
4000
6000
8000
10000
12000
4% 8% 13% 17% 21% 25% 29% 33% 38% 42%
G-2T-No Share G-2T-FFP G-2T-CO P2P
Sharing Case 1 (Urban MDU)Primary Operator Shares w/ 3 Other PON Operators
Assumptions: Market shares– Primary Operator (42%), PON Op 2 (33%), PON Op 3 (17%), PON Op 4 (8%)
Cost advantage of GPON over P2P is maintained even when Primary Operator over provisions network for other GPON operators
Above result holds independent of where sharing occurs in the network
•CAPE
X/su
b in
Eur
os
Primary Operator Take Rate
P2P
2-Tier GPON (No sharing, Sharing at FFP, Sharing at CO
almost overlap)
77 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
100
200
300
400
500
600
OSPManpower
PoP FloorSpace
Fiber cost ODF related Active NE CPE (incl.installation)
Spares RoW Powerconsumption
Sharing Case 1: Breakdown of Capex Components (20% TR)
Cost advantage of GPON is maintained when sharing w/ other GPON operators, due to “incremental” changes in OSP manpower, fiber and ODF costs
•CA
PEX
/sub
in E
uro
s GPONNo sharing
GPON-FFP sharingGPON-CO sharing
P2P
78 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
3% 6% 9% 12% 15% 18% 21% 24% 26% 29%
G-2T-No Share G-2T-FFP G-2T-CO P2P
Sharing at CO, GPON < P2P by 3%
Sharing at FFP, GPON < P2P by 12-15%
Hence, ideal situation for GPON operator is to share fiber at the FFP
Sharing Case 2 (Urban MDU) CapexPrimary Operator Shares w/ 4 Other P2P Operators
•Cap
ex/s
ub
(euro
)
Primary Operator Take Rate
No sharing
Sharing at FFP
Sharing at CO
P2P
79 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
0
100
200
300
400
500
600
OSPManpower
PoP FloorSpace
Fiber cost ODF related Active NE CPE (incl.installation)
Spares RoW Powerconsumption
Sharing Case 2: Capex Impact of Sharing w/ 4 Other P2P Operators
Additional OSP fiber, RoW and manpower costs diminishes advantage of GPON compared to P2P when sharing at the CO
•Cap
ex/s
ub
(euro
) GPONNo sharing
GPON-FFP sharingGPON-CO sharing
P2P
80 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
SummaryGreenfield & Overbuild FTTH deployment:
GPON provides lower Capex and Opex/sub compared to P2P across all take-rates.
Significant Day 1 OSP investment and higher Right-of-Way (RoW) Opex for P2P
Average savings: Capex ~ 20% (MDU/SFR); Opex = 55-60% (MDU), 40-45% (SFR)
2-Tier GPON cheaper than 1-Tier (for MDU) by 0-10% (function of take rate)
Hybrid Deployment (using DSLAM cabinets):
Overall, GPON and AE Capex are similar, but GPON provides significant OPEX savings
Small Capex savings for AE vs. GPON (0-5%) in areas with existing DSLAM cabinets. However GPON offers Opex savings of 5-58%
In areas with no DSLAMs, GPON Capex savings of 5-8%. However, GPON Opex savings are 37-58%
Key sensitivity analysis parameters impacting GPON Capex savings:
Fiber cost/meter; GPON CPE cost; Ethernet switch cost; remote Ethernet switch housing cost; andGPON OLT cost
Increased GPON deployment by major carriers should further lower GPON costs
Key sensitivity analysis parameters impacting GPON Opex savings:
Right-of-Way; Cost of energy and Fiber maintenance costs
Energy costs are projected to increase in the future; further increasing GPON savings
81 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Other Comments
Fiber sharing:
Cost advantage of GPON over P2P is maintained even when Primary Operator over-provisions the network for other GPON or P2P operators
Sharing at FFP is less costly for the primary GPON operator than sharing at the CO
Another study shows that there may be some special situations where P2P Capex is similar to GPON Capex for non-large scale deployments (outside scope of this paper)
For a very small # of HHPs (<3K) or small serving area/CO (<1km2) like an island;
however such deployments tend to be very small
Newer, more cost-effect fiber deployment technologies such as micro-trenching will help reduce overall FTTH deployment costs, but will not make P2P cheaper than GPON
82 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
GPON vs EPON Study - Assumptions
25% TR
20% TR
20% TR
Objective: Compare GPON vs EPON Capex/Opex
investments (e.g. China)
5 year (2007-2011) deployment
period in an Asian metro area
Customer types:
− Single Family Residential (FTTH)
− Multi-dwelling Units (FTTC+VDSL2)
− Enterprises
Each type modeled independently
Services bandwidth:
− Grows from 10 Mbps to 50 Mbps
Cost items modeled:
− Active NE (CO switch, CPE)
− Passive elements (splitter, ODF, fiber)
− OPEX (space, power)
Figure: Subs and growth forecast
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Network Modeling Assumptions for SFR, MDU and Enterprise
SFR: FTTH
Enterprise: FTTBusiness
Fiber Flexibility Pointwith Splitters
Fiber Feeder
CLE ONT
MDU: FTTBasement
Fiber DropDistribution Fiber
TapFiber Drop
Business ONT
Tap
Tap
MDU ONU +12 p VDSL2
Central Office
ODFOLT
Notes:
− OSP: Feeder fiber material cost only; Distribution and civil works cost same for EPON and GPON
− CO: ODF connects to OLT, GPON ,and EPON
~ 2km~ 1km
200 fibers/cable
~1000 max subs/ FFP
EPON: 1:32; GPON: 1:64
EPON: 1:32; GPON: 1:64
EPON: 1:4; GPON: 1:8
Cost OLT: GPON/EPON = 2
Cost ONT: GPON/EPON=1.3
Cost 12 VDSL2 ONU: GPON/EPON=1.03
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Single Family Residential (SFR) : PV of GPON Cost Savings
BW (Mbps):10 20 30 40 50
Breakeven in mid 2010
PV of savings ~ 13.2 Mil RMB
Present
Value
(RMB)
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SFR : Breakdown of Cost Difference (EPON-GPON)
GPON:
− OLT breakeven in 2009, splitter savings in 2009
− Significant savings in OLT, fiber, splitters in 2011
Cost
(RMB)
86 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Single Family Residential (SFR) : Sensitivity Analysis
Sensitivity Analysis of GPON savings
over EPON (+- 20%)
17.0% ¥13,175,709
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BW (Mbps):10 20 30 40 50
Multi-Dwelling Unit (MDU) : PV of GPON Cost Savings
Breakeven in early 2009
PV of savings ~ 80.8 Mil RMBPresent
Value
(RMB)
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MDU: Breakdown of Cost Difference (EPON-GPON)
GPON:
− OLT breakeven in 2009, fiber savings start in 2009
− Significant savings in OLT, fiber, splitters in 2010 and 2011Cost
(RMB)
89 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved © Alcatel-Lucent
Multi-dwelling Unit (MDU): Sensitivity Analysis
Sensitivity Analysis of GPON savings
over EPON (+- 20%)
18.4% ¥80,875,553
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EPON vs GPON Study – Summary
EPON provides a lower start-up cost, but requires significant investment in future years
All cases show that GPON has lower Present Value than EPON and is more future proof against BW and subscriber growth. Savings = 17% (SFR), 19% (MDU) and 30% (Enterprise)
Sensitivity analysis indicates the key parameters impacting investment are
− Subscriber Bandwidth: If BW stays below 20 Mbps, EPON becomes more economic than GPON
GPON ONT and ONU costs are expected to go down relative to EPON >> higher PV
Operators’ Experience
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Top BB countries end ‘07 (>2 M BB subs)
Broadband subscribers (% Households)
FTTx home passed (% HH)
5Mio BB Subs
Tbd
Source: Alcatel-Lucent
FTTN VDSL / FTTA
FTTBuilding / FTTA
FTTHome / FTTA
40% 60% 80% 100%
AustraliaSpain UK
Netherlands
TaiwanUSA
CanadaDenmark
Italy
Germany
France
Sweden
South Korea
Switzerland
Japan
Belgium
Hong Kong
20%
0%
20%
40%
60%
80%
0%
China
TurkeyPoland
ArgentinaMexico BrazilRussiaIndia
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FTTX Strategy for Major Operators
Source: public announcements
CountriesAustraliaBelgiumChina
DenmarkFrance
GermanyHong Kong
IcelandIreland
ItalyJapanKorea
New ZealandNorway
SingaporeSpain
SwedenSwitzerland
The NetherlandsUK
USA and Canada
Cable
CableCable
Incumbent Alternative Munis/util.
Cable
Cable
Cable
PON
FTTN
P2P/AE
N/A or TBD
Public announcements in top BB countries
II
FTTAmplifier
Cable
Cable
Cable
Cable
Cable
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Verizon
Competition with MSOs, subscribers retention
Started with BPON but now deploying GPON with RF Overlay
Home networking based on MoCA but plans to use HPNA
Complete bundled offer of network and services
Recently eliminated all analog TV and is now offering 100 HD channels and 50/30 Mbps Internet service
Penetration rate is now 20%; planning to go up to 40%
10,4M connected Households mid-’08, 23M planned end 2010
Cost per HHP: $782 (website article and consistent with Verizon FIOS briefing)
Cost per HH-connected: $718
Cost per sub (at 50% TR) = $782 x 2 + $718 = $2282 (consistent with expectation of $2000-$2500)
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AT&T
Deploying ADSL2+, VDSL, GPON
Triple Play service
GPON in greenfield locations
Now has 21.8M million primary residential lines
Planning to pass 18 million homes by 2008
1M will be FTTP
Rest is FTTN – mix of ADSL2+/VDSL/bonding with $4-5 billion in capex investment
Fiber is deployed within a few thousand feet of the home, readying the neighborhood for FTTH at some point
Estimated expense of $360 per home passed; $150 per home connected
Cost per sub (at 50% TR) = $360 x 2 + $150 = $872
Plans call for deployment completion in 2-4 years
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Other Worldwide FTTH Activities
NA
AT&T: FTTN, GPON
VZ: GPON
Bell Canada – FTTN >> GPON
Qwest: BPON – looking at FTTH options
Numerous municipalities deploying P2P Ethernet, GPON
LAM
Telefonica in Argentina in lab trials Telmex
EMA
Telefonica has announced lab trials
GPON in Nordics
KPN: VDSL/AE >> GPON
Kuwait MOC deploying GPON
Free deployed AE in Paris
APAC
China – field trials
Japan – Volume deployment of EPON; NTT testing GPON
Taiwan – EPON; testing GPON
India – Bharti & BSNL decided on GPON
Australia – GPON evaluation
Singapore – In field trials