GPON and EPON Revenues Grow

Market research firm Dell’Oro Group announced yesterday that total PON equipment revenues from sales of optical line terminals (OLTs) and optical networking terminals (ONTs) hit an all-time high in the third quarter. 

Revenues grew 8 percent over 2Q 2009 and 6 percent over the 3Q 2008 period, according to the firm’s calculations.

“GPON revenue growth was strongest, driven by the increasing deployments outside of North America,” Tam Dell’Oro, president of the group, said in a statement. EPON revenue grew as well, but more slowly.

Part of this differential is simple math. “GPON has only been ramping up since last year,” Steve Nozik, Dell’Oro’s principal analyst for broadband access research said.  “It’s coming from a smaller base.”

GPON growth was in the mid-teens; whereas the EPON growth was in the low-single digits, he said.

One factor impacting EPON this year was declining sales—after two strong years—in Japan. Driving EPON growth, however, has been fiber-to-the-building projects in China that now need opto-electronics.

“EPON’s really been going gangbusters with China starting this year,” Nozik said.

The largest deployment of GPON is in the U.S., with Verizon; the second largest is in the United Arab Emirates (UAE).

EPON gained traction in Asia early. For instance, FTTx silicon and software developer Teknovus announced a chipset compatible with China Telecom’s EPON specs in Nov. 2006. Nozik said EPON’s success has helped drive costs down.

“A single user EPON ONT in Korea and Japan are maybe in the $80-$90 range,” Nozik said. “A GPON ONT is probably a couple of hundred dollars right now.”

In terms of overall revenue, EPON is stronger, with 60 percent of the market vs. 40 percent for GPON, he said.

—Jonathan Tombes