Economic Slowdown Hits GPON Market

A drop in new home construction and delays in FTTH deployment will hinder GPON revenues, but the market will continue to grow, says Light Reading Insider

A slowdown in new housing construction and delays in deployment of fiber to the home (FTTH) will adversely affect Gigabit passive optical networking (GPON) product revenues over the next 12 to 18 months, although worldwide demand for GPON products will continue to grow, according to the latest report from Light Reading Insider, a paid research service of TechWeb's Light Reading.

GPON: Still Waiting for Lift-Off explores and analyzes the GPON equipment sector, including a five-year global market forecast. It provides an overview of recent GPON developments in markets around the world, indicating likely major areas of opportunity. It reviews the impact on the GPON market of current economic and regulatory conditions -- in particular the continuing uncertainty over the business case for all forms of FTTH -- and assesses progress toward interoperability and development of the next generation of PON technologies. The report includes a competitive analysis of GPON offerings from 15 different suppliers.

"GPON has emerged as probably the most important of the current technologies for FTTH and FTTB," says Danny Dicks, research analyst for Light Reading Insider and author of the report. "GPON is likely to keep its technology leadership position through at least 2011, at which point next-generation PON technologies will emerge."

The current economic slowdown is having an immediate effect on GPON revenues, and a prolonged slump could have significant implications for GPON suppliers, Dicks advises. "GPON will be the dominant PON technology worldwide, although we expect active and point-to-point Ethernet to continue to be chosen for some FTTH and many FTTC deployments over the next five years," he says.

Other key findings of GPON: Still Waiting for Lift-Off include:

-- The GPON equipment market will be smaller -- both now and in the future

-- than predicted in 2007, but will still be worth $2 billion per year by 2011.

-- GPON is likely to displace EPON as the technology of choice in Asian markets, and will become the dominant FTTH technology worldwide over the next two to three years.

-- Potential replacement technologies are still several years away, which means the GPON window of opportunity is still open.

GPON: Still Waiting for Lift-Off is available as part of an annual single-user subscription (12 monthly issues) to Light Reading Insider, priced at $1,595. Individual reports are available for $900 (single-user license).