FTTH News

Verizon (NYSE: VZ) is enhancing how users in its Pittsburgh and Tampa Bay area markets interact with their FiOS TV experience with a new version of its FiOS TV Interactive Media Guide (IMG).

IMG allows users to pull together content from broadcast TV, the Internet and users’ own personal media into one media-management system. Since the IMG was initially introduced in 2007, the IMB has become a tool that includes applications for social networking, Internet video, media streaming, account management and multi-screen/mobile viewing.

Based on customer feedback Verizon received in product development labs, field trials and social media forums, Verizon created over 25 new upgrades to FiOS TV IMG that customers in both the Pittsburgh area and the ILEC’s six-county Florida service area can now access.

Customers can access the IMG’s new features–including new DVR enhancements (DVR chaptering and Multi-hub DVR), personalization features (parental control and guide customization), and improved search capabilities–via FiOS TV remote control or through Verizon’s FiOS Mobile application. The FiOS mobile application enables users to use their smart phone (iPhone, iPod Touch, iPad or Android) into a remote control.

At a time when Verizon has scaled back its FiOS rollout plans, the service provider’s move to create an enhanced IMG is a sign it’s focusing adding more value to its FTTH-based product beyond just offering a faster bandwidth pipe.

QCOL, a western Pennsylvania-based Internet services and triple-play provider, will deploy MXK from FTTx network access systems provider Zhone Technologies Inc. (NASDAQ:ZHNE) as its primary Gigabit Passive Optical Network (GPON) access platform for a new fiber-to-the-home (FTTH) network it is building to deliver triple-play services to customers.

Zhone’s MXK system will equip QCOL to deliver affordable, reliable, high-speed Internet access, VoIP, and video services to more than 2,000 subscribers across Fayette County, Penn.; Garrett County, Md., and Preston County, W.V., beginning August 2011.

The system capabilities of Zhone’s MXK platform enable up to one gigabit (1GB) capacity in the home and the ability to support the extreme bandwidth demands generated by multiple high-definition television (HDTV) screens, high-definition digital video recorder (HD-DVR) content, and video streaming within the home. Its scalability and flexibility help future-proof the network for more advanced service rollout, while reducing recurring operating expenses (OPEX) and any adverse customer impact from rollout of these next-generation services, says a company representative.

“The residential and business customers we serve are demanding increasing amounts of bandwidth. We sought a solution to address not only current but future bandwidth requirements,” explains Brian Frazee and Doug Friend, owners of QCOL. “We selected Zhone for the impressive density offered by 8-port GPON cards, along with the MXK’s superior scale, effective network management capabilities, and system flexibility to support multiples services in the same chassis. We were extremely intrigued by the cost savings anticipated for us and our customers.”

With QCOL delivering radio-frequency (RF) video over fiber and the MXK’s ability to support the same via either Passive Optical Network (PON) or point-to-point Active Ethernet, the MXK was a fit for this project. QCOL is also deploying Zhone’s zNID Optical Network Terminals (ONTs) for the end points.

Cincinnati Bell (NYSE: CBB) may not be the size of its larger former Bell System compatriots AT&T (NYSE: T) and Verizon (NYSE: VZ), but it is innovating with new products like Fiber to the Home, IPTV and now energy services to offset inevitable declines in its traditional PSTN voice business.

On the FTTH side, Cincinnati Bell has been taking a careful growth approach, passing around 80,000 homes in Cincinnati and Northern Kentucky. Not content to rest on its laurels, the service provider plans to pass an additional 70,000 homes by bringing fiber into specific neighborhoods.

Of course, Cincinnati Bell is being realistic about its FTTH deployment. To augment its Fioptics TV service, the service provider will introduce its own IPTV service over its copper lines sometime later this month.

Ted Torbeck, president and general manager of Cincinnati Bell Communications, told Cincinnati.com that delivering IPTV over its copper lines is all about scale. By leveraging its existing copper network to deliver IPTV, it will be able to reach three times as many homes today than it can deliver over fiber.

Scaling the reach of a FTTH network, even for smaller ILECs like Cincinnati Bell, still requires a large investment. “We’ve invested $140 million so far and we still have only about 12-15 percent of the market covered,” Torbeck said.

But Cincinnati Bell is not stopping with FTTH and IPTV services. In June, the ILEC made a surprising turn when it announced it would begin offering residential customers electric service via a partnership with Viriden Energy.

Since launching the service late last month, Cincinnati Bell reported it has signed up 1,400 customers for the service. Going forward, the service provider plans to introduce energy service plans for businesses in addition to offering natural gas services.

While it will take time to assess how successful Cincinnati Bell’s bets on IPTV, FTTH and energy will be, these moves represent the service provider’s need to differentiate against the growing cable threat and ongoing wireless voice service substitution.

Bulgarian ISP EVO Ltd. will use GPON fiber to the home (FTTH) equipment to offer its customers a range of new services, according to the Europe-based systems house. The new services include IPTV.

Nokia Siemens Networks will supply in-home customer premises equipment and optical line termination units for EVO’s upgrade. The supplier of the companion optical line terminals in the central office has not been announced.

“Our goal is to improve the individual experience and satisfaction of our subscribers by providing new high-quality services, and increasing network capacity,” said Rosen Velikov, CEO of EVO Ltd. “Nokia Siemens Networks’ solution will translate into a more cost-efficient network expansion and also guarantee extremely reliable and high-quality data services to our subscribers.”

“Bulgarian citizens demand increased broadband access and new, convergent services. EVO.bg is playing an important role in bridging the broadband gap and setting high service quality parameters for us to meet,” said Dietmar Appeltauer, head of central-east Europe sales for Nokia Siemens Networks. “We are confident that EVO.bg users can benefit from a much improved experience.”

Brazil’s National Broadband Plan (Plano Nacional de Banda Larga, PNBL) took another step forward as four of the country's largest service providers have confirmed their involvement in the initiative.

Telemar Norte Leste (Oi), Telefonica Brazil (including Telesp), Algar Telecom (formerly CTBC) and Sercomtel revealed they will participate.

Under the new plan, these four service providers are required to begin delivering 1 Mbps minimal speeds for BRL35 (US$22) a month.

Broadband services would be delivered over a 23,000 km fiber network that will be run by former state monopoly telco Telebras to deliver broadband services 40 million households by 2014.

China Telecom has selected Alcatel-Lucent (Euronext and NYSE: ALU) to supply PON equipment for its “Broadband China, Fibre Cities” project. The project aims to supply more than 26 million people in unserved and under-served areas of China with new broadband services.

The "Broadband China, Fibre Cities's project will see the deployment of a mix of PON technologies connecting homes, office buildings and remote “nodes.” The nodes will then support fiber-to-the-node (FTTN) delivery of broadband services, wherein the final distribution of broadband signals will use existing copper wires. Alcatel-Lucent will supply its Intelligent Services Access Manager (ISAM) product family, which includes a mix of GPON, EPON, and DSL technologies.

Wei Leping, Chairman of China Telecom Science & Technology Committee, said, “China Telecom launched ‘Broadband China, Fibre Cities’ strategy at the beginning of 2011, which aims to realize optical network coverage in all the cities in three years. By 2015, China Telecom will achieve an FTTH coverage of 100 million households and 30 million FTTH subscribers. Leveraging Alcatel-Lucent Shanghai Bell's leading broadband access portfolio and Alcatel-Lucent's enriched deployment experience for other operators worldwide, we are able to provide the urban users the experience of web surfing at the speed of light."

Rajeev Singh-Molares, President of Alcatel-Lucent’s activities in the Asia-Pacific Region, said: "This project represents another major milestone in the rapid modernization of China's telecom landscape, and highlights the deepening relationship between Alcatel-Lucent and China Telecom, one of the world's largest and most dynamic service providers."

Following the deployment, China Telecom will be able to offer subscribers a range of consumer and business services including IPTV, video on demand, voice over IP (VoIP), and more at speeds of up to 50 Mbps, all with guaranteed quality of service (QoS) levels. This project is part of China Telecom’s plan to extend its FTTH coverage to 100 million users by the end of China's 12th Five-Year Plan (2011-2015).

It is not surprising that China’s PON CPE (customer premises equipment) vendors are doing well in this highly cost-sensitive market. Building, testing, and qualifying FTTx CPE requires skilled labor, lots of it. In addition, China leads the world in consumption of FTTx equipment, providing the PON CPE vendors a strong home market.

However, China’s FTTx CPE vendors are not simply finding cost savings at the margin. A number of them are leading innovations, creating PON ONU/ONT (optical network unit/optical network terminal) devices that cost around 40% less than today’s equipment.

These innovations could bring PON CPE costs to within 1.5x the cost of comparable DSL equipment. When applied to 10G PON, this price reduction may serve as the catalyst for adoption.

We focus here on Cambridge Industries Group (known as Cambridge or CIG) and Superxon (Chengdu) Technology Ltd., two privately held PON CPE vendors in China that have developed cutting-edge technologies for significant savings.

Cambridge was founded in 2005 and is a significant independent supplier of GPON ONTs. Dr. Gerald Wong, chairman and CEO, reported in October 2010 that its revenues had grown at a CAGR of more than 125% over the past three years. Wong brought both start-up (Photonic Bridges) and large-company (Lucent) experience to Cambridge.

Cambridge is a leader in the charge to bring BOSAs (bidirectional optical subassemblies) on board for PON equipment. Cambridge publicly discussed BOSAs back in 2009 and now holds a trademark for BOB-BOSA on Board. BOSA-on-board ONT designs enable significant cost savings, around 40% when compared to traditional optical module–based designs.

This saving is significant in GPON, where PON ONTs are still at least twice the cost of DSL/VDSL/ADSL CPE.

Bringing BOSA-on-board ONT equipment to market presents challenges, requiring calibration and testing of each ONT device, as well as testing and qualification by system vendors and service providers.

We are confident that Cambridge is overcoming these challenges. Cambridge claims that its GPON ONTs are interoperable with “practically every” GPON OLT in the industry. It has more than 500 employees and can apply its manpower to BOSA-on-board ONT device calibration and testing. In early June 2011, Cambridge announced its new manufacturing facility, more than doubling its former capacity.

Ovum’s upcoming brief on BOSAs will discuss the movement to BOSAs in the PON market along with implications for the ecosystem.

Superxon’s founders and employees include some formerly associated with Fiberxon. Fiberxon was acquired by MRV and then merged with Luminent to become Source Photonics. One of Fiberxon’s and Source Photonics’ former key executives was Jacky Lu, who is now CEO and president of UTStarcom. Given this relationship, we believe UTStarcom was an early customer.

Superxon is supplying PON equipment to the major system vendors in China. Based on conversations with component vendors, we believe that Superxon is gaining market share. Its competitive strategy includes BOSA designs for 10G PON equipment.

The major impediment to 10G PON is the cost of the optics and therefore the high cost of equipment. Savings achieved through BOSA-based 10G PON equipment might be sufficient to support the business case for 10G PON.

Superxon’s competitive product positioning also includes EoC – Ethernet over Coax. Products include cable line terminals and cable network units. This positions Superxon to capture market share when China’s cable industry adopts PON for triple-play services – despite delays, we do expect this to happen within the next few years.

Perhaps Superxon’s management team saw the importance of both patent holdings and ISO certifications during the acquisition process for Fiberxon. The company’s news site is dominated by announcements concerning patent filings and patent grants. Superxon has already been granted 29 patents, an impressive amount for a company that was founded in late 2007. In addition, its website mentions three ISO certifications.

China’s PON CPE vendors are developing cutting-edge technologies leading to significant cost savings. This competitive advantage serves Cambridge and Superxon well in China’s fast-growing PON market. It also works well outside of China, where OEMs and service providers alike understand the business case implications of PON CPE equipment that approaches the cost of DSL CPE equipment.

Telefonica Brazil is moving forward with plans to expand its Fiber to the Home (FTTH) coverage to about 1 million homes this year with an emphasis on the Sao Paulo region.

Already, Telefonica Brazil has wired up 400,000 homes with FTTH, 20,000 of which are currently using the service, but would like to increase the subscriber base to 70,000 users by the end of this year. Ultimately, the provider wants an installed base of 1 million subscribers by 2015.

The FTTH expansion will be funded by a $126 million investment plan from its parent Telefonica (NYSE: TEF). In addition Telefonica, a TeleGeography report citing unconfirmed sources revealed that Telesp has signed an 'untied' loan agreement with the Japan Bank for International Cooperation (JBIC).

This latest FTTH drive follows an earlier announced plan by Telefonica to increase capex spending by 52 percent in Brazil over the next three years and combine its wireline and wireless holdings into one unit.

Telefonica Brazil's bet on FTTH comes at a time when broadband subscribership continues to rise. According a report issued by Associacao Brasileira de Telecomunicacoes (Telebrasil), Brazil's wireline broadband rose 20.5 percent to 14 million subscribers since 2010.