FTTx optics sales to exceed $1bn in 2015

01 Jul 2015

Market analyst Ovum forecasts that this year will be biggest yet for FTTx component sales.

According to a new forecast report by Ovum, FTTx optics will reach a new record level in 2015, following a record-breaking 2014. The report forecasts that FTTx optical components revenue will exceed $1bn this year, up almost 5% from $953m in 2014. Next year's sales will likely remain strong, with forecast revenue of $985m. Demand for PON equipment – both OLTs (Optical Line Termination) and ONTs (Optical Network Terminals) – is driving the FTTx optics market to record levels.

Julie Kunstler, principal analyst in Ovum’s intelligent networks and components team and author of the report, commented, “Numerous positive factors are driving the FTTx optics market to new levels, including FTTH network deployments by China Mobile and the continued network builds by China Telecom and China Unicom.”

Other positive trends contributing to the strong growth are FTTx network deployments by North American MSOs (Multiple System Operators), Google Fiber’s expansion plan, US telco deployment plans, European deployment plans, continued deployments in the Middle East, small deployments in South and Central America and Africa, and the movement toward FTTP or FTTH (which require more Passive Optical Network (PON) ONT optics).

Key forecast findings

• Total OLT transceivers are forecast to reach 6.5 million in 2015, an increase of 19% on 2014.
• Next-gen OLT transceivers are forecast to represent just over 12% of the total OLT transceiver market in 2020, with 10G EPON (Ethernet Passive Optical Network) OLTs representing the largest segment within next-gen PON.
• The total ONT transceiver/BOSA market is forecast to exceed 71 million in 2015, an increase of 18% from 2014.
• Next-gen ONT transceivers/BOSAs (Bi-directional Optical Sub-Assembly) are forecast to represent just over 9% of the total ONT transceiver/BOSA market in 2020 with 10/1 and 10/10 EPON ONTs representing the largest segment within next-gen PON.

Ovum’s PON optical components forecast does not include any large FTTx deployments in the heavily populated countries of India, Brazil, and Indonesia. “Large deployments in these countries would provide a significant uptick to the units forecast and consequently to revenues,” stated Kunstler, “as would faster deployments of next-gen PON because the ASPs (Application Service Providers) for next-gen PON optics are higher than those for non-next-gen.”

China crisis?

The largest potential downside to the forecast could come from a slowdown in FTTx deployments by the Chinese operators. China is the single largest consumer of PON optics in the world and any slowdown would negatively impact the forecast.

However, Ovum believes that China’s newest operator entrant into FTTx, China Mobile, is well positioned to deploy an FTTx network, bring existing mobile customers onto its new wireline broadband network, and offer additional services.

“This strong outlook benefits Japanese optical subcomponent vendors such as laser and lens manufacturers. Meanwhile, the wireline broadband FTTx market upswing is having a positive impact on component and equipment vendors,” concluded Kunstler.

About the Author

Matthew Peach is a contributing editor to optics.org.