LightTrends

 

Access optics market poised for recovery

LightCounting releases updated report titled “Next-Generation Access Optics”

 

Global FTTx and wireless markets will consume almost 100 million optical devices in 2017, worth some $1.3 billion in revenue to components makers. This is a 22% decline from the last year, which was expected. The decline in demand for optics is related to completion of LTE upgrades in many countries and a pause in FTTH deployments in China. LightCounting expects this market to recover in 2018 and grow steadily in the next 5 years, as shown in figure below. Chinese service providers are expected to accelerate FTTH deployments in 2018 in order to meet the government target of 200 million new ONU ports to be installed over 2016-2018. Sales of 10G PON and optics for 5G wireless infrastructure will lead the market growth in 2019-2022.

Figure: Sales of optical components for access networks, 2012-2022


In the FTTx segment, GPON has the largest annual shipment volume today, but will decline over the forecast period, as the biggest deployments are ending now. 10G-PON has already displaced GPON for current and future deployments of OLTs in China and we expect other countries and operators will follow suit, with a few notable exceptions. [Verizon will begin deploying NG-PON2 next year, albeit for business customers only.]  As 10G-PON optics cost considerably more than GPON, this product shift will boost component sales, even as the total volumes will decline gradually.

The wireless market story is similar, with peak deployment behind us already. Unit shipments will decline, as in FTTx, while sales will benefit from a shift from 10G to 25G (grey and WDM) optics which will be needed for 5G fronthaul. Smaller volumes of 50G (again both grey and WDM varieties) will add disproportionately to revenues given their high prices compared to slower speed devices.

The 2017 edition of this report contains a variety of new content that was not included in the 2016 version.  Some of the more notable additions are:

  • 5G network deployment timing and network requirements have been clarified as the 3GPP has progressed work significantly over the past year
  • The new eCPRI standard for 5G fronthaul, published in August 2017, is discussed in the report and we have more clarity on its impact on fronthaul bandwidth requirements
  • Optics used in cable TV networks are discussed, since the adoption of fiber deep architectures is increasing demand for optical transceivers in this market segment. 
  • A tutorial on cable TV networks has been added, as Appendix C, complementing the ones on FTTx and mobile fronthaul that first appeared in previous editions of the report (Appendices A and B respectively)

In the forecast and forecast spreadsheet, the most notable changes are:

  • 25G WDM and 50G WDM transceivers have been added to the mobile fronthaul forecast, based on a clearer understanding of 5G fronthaul requirements and the role that WDM transport will play in addressing them
  • A 50 Gbps category has been added to the mobile backhaul forecast, reflecting new information on China Mobile’s 5G transport network architecture

LightCounting’s “Next-Generation Access Optics” report is an update of its 2016 report of the same name. Written by LightCounting Principal Analyst John Lively, this report gives LightCounting’s outlook on future optical access networks, including architectures, service provider deployment strategies and trends, component requirements, and the products needed. Leading vendors of access components are profiled, and historical transceiver shipment trends are explained. Acronyms, and pictorial guides to mobile fronthaul, FTTx, and cable TV networks are included as well. A detailed Excel spreadsheet accompanies the report, providing a five-year forecast of fronthaul, backhaul, and FTTx optics shipments, prices, and revenues, broken down by speeds, reaches, and colors.
 
More information on the report is available at: http://www.lightcounting.com/Access.cfm.



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LightCounting is a leading optical communications market research company, offering semiannual market updates, forecasts, and state-of-the-industry reports based on its analysis of primary research with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s first choice source for the accurate, detailed, and relevant information necessary for doing business in today’s highly competitive environment. For more information, visit: www.LightCounting.com or follow us on Twitter at @LightCounting.