DSL El Sayed

1 | September 28, 2008
Networks 2008
Mohamed El-Sayed
All Rights Reserved Alcatel-Lucent
Agenda
Market Challenges End User Applications and Traffic Model Broadband Access Technologies FTTX Deployment: Economic Considerations Case Studies Operators Experience Q&A Survey
Networks 2008
Mohamed El-Sayed
Market Challenges
Broadband Services
Future Services
Network Impact
Blended Services Broadcast TV, HDTV, VoD, VoIP, P2P, ITV Gaming, PC video, and music streaming Service Sophistication
High Speed Internet (HSI)
Business Access
Best Effort
High Availability Increased Bandwidth
Low Latency High Stability
Real time services require: Continuous monitoring Advanced diagnostics Increased QoS
Access networks must evolve to support these services

3 | September 28, 2008 Networks 2008 Mohamed El-Sayed All Rights Reserved Alcatel-Lucent
Market Challenges
US IP Video Traffic Volume Growth Estimates US IP video traffic is expected to grow to over 20K PB/yr, or ~ 60% of the total IP consumer traffic, by 2012:
Video traffic is the main driver behind the Internet traffic growth of ~ 50% per yr, trending down to ~30% by 2012* Video-to-TV accessibility will grow from 6% to over 50% (users) 60-70% of P2P traffic will be video
PB per yr
North America Consumer Internet, PB per yr

40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2006 2007 2008 2009 2010 2011 Total Video (incl 60% of P2P) ~ 19800 PB Internet Video to TV Internet Video to PC VoIP Video Communications Gaming P2P (60%-70% video) Web, email, file transfer
North America represents ~ 32% of Worldwide traffic, and US ~90% of NA. Video communications will become important in the longer term-range (2012-2015)
Source: Alcatel-Lucent, Cisco, CIBC World Markets Corp and IDC, Emerging Media Dynamics,2008.
Networks 2008
Mohamed El-Sayed
Market Challenges
IPTV Subscriber Growth
100+
Mbps
Tier 3
Mbps
HSI
Still More Data!! TV 3 DVR 2
50
Standard Def
High Def
HS Internet
Tier 2
Mbps
More Data
20
HS Internet
Tier 1
Data
Standard Def Standard Def
DVR 1 TV 2
High Def
TV 1
Exponential growth! Bandwidth per subscriber (with MPEG-4)

Traffic Model
Traffic Model
Broadband Applications
Category
TV/Video SD
Application Name
Broadcast Video- SDTV (MPEG-2) VoD - SDTV Broadcast Video- SDTV (H.264) Streaming Video Broadcast Video- HDTV (MPEG-2) Broadcast Video- HDTV (H.264) VOD - HDTV Live Streaming Audio Radio on demand Music On Demand, Podcast Multiplayer Gaming Best Effort Internet Service Premium Internet Service - Tier 1 Premium Internet Service - Tier 2 Premium Internet Service - Tier 3 Telephony Conference Audio Video Telephony Conference Video Emergency Communications
Downstream Peak (Mbps)

4 2 2 2 19 8 8 0.128 0.128 0.128 2 2 5 20 20 0.064 0.064 2 2 0.064
Upstream Peak (Mbps)

0 0 0 0.384 0 0 0 0 0 0 0.384 0.384 2 5 20 0.064 0.064 0.384 0.384 0.064
TV/Video HD Radio Music Games Internet Access
Inter-personal communication
Networks 2008
Mohamed El-Sayed
Traffic Model Key Parameters

VoIP Parameters Codec & BW No of lines/HH VoIP take rate Voice calls/BH HSI Parameters BW/HH HSI take rate Concurrency rate Stat Muxing factor
Video Broadcast Parameters IPTV Take rate No of SD channels No. of HD channels SD video codec HD video codec No of STBs/HH % of active STBs/HH % of active STBs changing channels simultaneously % of active STBs using PVR
Channel change burst rate
VoD Parameters VoD Take rate No. of VoD assets % of SD content % of HD content SD VoD Codec HD VoD codec Concurrency rate Local server hit rate Popularity curve parameters
Networks 2008
Mohamed El-Sayed
Traffic Model
Bandwidth Needed for Triple Play
Service mix may vary and include, e.g. VoIP or all-SD with faster Internet service Second HD channel typically to support concurrent home PVR recording
Mb/s
30
ASDL2+ bonding with bonding capable CPE, or VDSL2
Introduction of VDSL2 bonding with bonding capable CPE OH OH HSI
25 HSI
OH HSI
20 OH 15 HSI HD HD
HD
Assumes quality of picture competitive with digital satellite/cable

SD= standard-definition TV HD= high-definition TV
HD 10 HD HD 5 SD 0 SD SD SD SD HD HD
HSI= high-speed Internet access
2006
2007
2008
2009
Networks 2008
Mohamed El-Sayed
BB Access Technologies
Broadband Access Technologies

Wireline
Cable (HFC) ADSL2+, VDSL2 GPON, EPON Point-to-Point and Active Ethernet
Wireless
CDMA (1xEV-DO rev A) GSM (GPRS/EDGE) UMTS HSPA WiMax LTE
11 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Cable Architecture
Headend Headend
The Basic Coax Based CATV Network
The Basic HFC Based CATV Network

Amplifier Splitter Subscriber Tap Fiber Node
Internet Internet
PSTN PSTN
NCS
MTA MTA
DOCSIS MTA = Multimedia Terminal Adapter CM = Cable Modem CM CMTS = Cable Modem Termination System NCS = Network based Call Signaling Protocol HFC
CMTS
IP Telephony Server
Optical Rx/Tx
12 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Bandwidth Capacity of Todays Cable Plant (with 500 Homes/Fiber Node)

Downstream Channel Capacity and Need
160 6MHz RF Channels 140 120 100 80 60 40 20 0 Today Future VoD channels Channel Capacity HSIA channels DS HD Broadcast Channels SD Broadcast Channels Analog Channels
6 MHz RF channels with 38.8 Mbps capacity 750 MHz system can carry 117 downstream channels Average 500 homes/fiber node (NA)
Current cable plant may not be able to support the downstream BW needs over 5 years Incremental steps are needed to meet the demand, e.g.:
Analog channels reclaim Switched digital video Node splits Bandwidth expansion DOCSIS 3.0 MPEG-4
Networks 2008 Mohamed El-Sayed All Rights Reserved Alcatel-Lucent
13 | September 28, 2008
DSL
CO DSLAM CO or Street Cabinet
Small DSLAM
MDU MDU Remote DSLAM
Remote DSLAM
CO-Based ADSL2+ or VDSL

Distance limitation
Outdoor cabinets
ADSL2+ VDSL Bonded DSL
14 | September 28, 2008 Networks 2008 Mohamed El-Sayed
MDU = Multi-Dwelling Units
Evolution of DSL Speeds
1000.000
100 Mb/s
downstream rate [Mb/s]
10.000
VDSL2
ADSL2+
VDSL
ADSL HDSL
ADSL2
xDSL
1.000
ISDN
0.100
voice-band modems
0.010
V.90 V.34 V.34
0.001 1965
V.26
V.27
V.29
V.33
1970
1975
1980
1985
1990
1995
2000
2006
2010
year
15 | September 28, 2008
Networks 2008
Mohamed El-Sayed
DSL Reach vs Bit Rate
100
Mbps
VDSL2
FTTB VDSL2 offering up to 100Mbps symmetrical Cost effective alternative for Ethernet CAT5
50
Mbps
VDSL2
FTTN VDSL2 Up to 50Mpbs Most cost-effective OSP solution in overbuild (reuse copper plant)
24
ADSL2+
11 8 3
ADSL2 ADSL
RE-ADSL2
SHDSL
1 2 3 4
Loop Length (km)
16 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Subscriber Loops
Distance from CO to Subscriber

100 90 80 70 60 50 40 30 20 10 0 0 1 2 3 4 5 6
Source - IEEE
Percentage of Customers Reached
Italy U.K. Germany India U.S. Sweden 7 km
17 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Triple Play is Challenging CO-based Deployments
DISTANCE
Theoretical Bandwidth
(Mbps)
ADSL
ADSL2
ADSL2+
VDSL2 (FTTN)
PON/P2P (FTTU)
% subscriber from CO (Europe) (NA)
13
24
>50
>100
0.5 km(1.7Kft) Average real Conditions 1 km (3.3Kft) 3 km (9.9 Kft) 6 km (19.8Kft)
8 8 7 1
10 9 7 2
18 16 9 2
32 26 -
>100 > 100 > 100 > 100 20% 78% 97% 10% 38% 87%
Only a limited subscriber base can be served from the CO with DSL technology
Reference?
FTTN Considerations
CO
Street Cabinet DSLAM
OSP
VDSL2
Ethernet Switch (CO)
Need to determine optimal cabinet location and size
Benefits
Challenges
Provides target bandwidth with VDSL/VDSL2 Lowest CAPEX for evolution to next generation access, using existing copper assets
Requires new IP/Ethernet DSLAMs Civil work Opex Regulations for FTTN unclear Upgradability
19 | September 28, 2008
Networks 2008
Mohamed El-Sayed
FTTN Deployment
Central Office / Co-Lo

Access to unbundled loops High Density / Low Power
Remote Terminal
Indoor or Outdoor configurations Environmentally Hardened for OSP ONU Host Applications
CO / CLEC Regional Center
Fiber In the Loop via ONU

Fiber deeper into the network Shorter Distances / Higher Bandwidth Small / medium concentration of Multi-service Subscribers

*1 20 |$300/site September 28, 2008 @ -- 10% change
in cost/sub Networks 2008
Mohamed El-Sayed
FTTN - Several Scenarios

CO Outside Plant (OSP)
VDSL
Homes
Cover short loops from the CO Cover the rest with OSP deployment
FTTN + DSL
ADSL2+
VDSL
FTTN
ADSL2+
Long loops
VDSL
FTTN + FTTH
splitter
GPON for greenfield; VDSL for brownfield

GPON
FTTB + FTTH
splitter
GPON for greenfield;

GPON
VDSL
VDSL for brownfield or when riser is an issue
FTTC
splitter
21 | September 28, 2008 Networks 2008
GPON
Lower expected BW/sub

VDSL
Mohamed El-Sayed
Components of a Triple Play Services Delivery Architecture

Services and Servers HSIA DHCP Policy Radius AAA Edge Routing IP service termination Per-service QoS IPTV multicast routing Flexibility for DHCP and PPPoE for HSIA present mode of operation
Soft Switch
Aggregation Ethernet aggregation Per-sub, perservice QoS Subscriber profile IGMP proxy Security Reliable Layer 2 forwarding model
Access FTTN IGMP proxy/Multicast Security QoS VDSL2/ADSL2+
Home/Business RGs TR-069 Voice Data Video
IPTV server
DHCP
SR
Internet
DHCP IPTV PPPoE SIP
VPLS/ HVPLS
ESS
FTTN
RG
Phone IPTV
BRAS
Internet
SR Service Router
22 | September 28, 2008
ESS Ethernet Service Switch

Networks 2008
FTTN Fiber-to-the-Node
RG Residential Gateway
Mohamed El-Sayed
FTTH
ITU G.984 BPON ITU G.984 GPON IEEE 802.3ah EPON Ethernet P2P DF Ethernet P2P AON
Opt power splitter 1.2 G or 622 Mb/s down
ATM switch
t1 tn
15.7-31.6 Mbps/sub
155/622Mb/s up 1.2 or 2.4 Gbps down, 155 - 2488 Mbps up
Separate RF video overlay ATM-only transport Standardized form available today
3.9-15.6 Mbps/sub
Multiservice switch OLT
t1 tn
33.4-66.8 Mbps/sub
3.8-60.4 Mbps/sub
Native protocol transport using GFP/SDH In-band video Standardized form available today
Opt power splitter
Ethernet Switch OLT
1 Gbps
t1 tn
28.5 Mbps per sub
Ethernet-only transport In-band video Standardized form available today
25.7 Mbps/sub 100 Mbs per sub
100Fx
Ethernet Switch
Passive Outside plant Ethernet-only transport In-band video Standardized form available today
N x 1 Gbps or 10 Gbps
Active Switch
Ethernet Switch
100 Mbs per sub
Active Outside plant Ethernet-only transport In-band video Standardized form available today
23 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Gigabit Passive Optical Networking (GPON)

Passive splitters used to share a single fiber among subscribers Full downstream bandwidth is available dynamically to any endpoint, at any time Upstream bandwidth is allocated to endpoints No electronics in outside plant
Wavelength Splitter/Combiner Optical Network Terminals (ONTs)
1310nm l
Optical Line Terminal (OLT)
1490nm l
Pros
Virtually unlimited bandwidth Future proof investment Standardized technologies Optical components and fiber prices have been reduced substantially Improvements in installation practices
Subscribers
Challenges
Investment in fiber for the last km Choice of technology and topology Regulations unclear (EU promoting open network model)
Typical GPON Network Architecture
Central Office
1,550 nm to support local CATV service If required 1,490 nm 1,310 nm Optical Line Terminal
Passive Outside Plant
Typically up to 20 km (28 dB)
Multi-dwelling units
Edge Switch IP/MPLS
2.5 Gb/s
splitters points
Small/medium enterprises
1.2 Gb/s Voice , data, and video Single family homes
Application Servers (voice, video, data
Single fiber infrastructure for all services (voice, data and video)
RF Overlay for Video with GPON

Internet IPTV Voice 20 km Management System IP/MPLS VPLS Class 5 voice RF Video OLT splitters WDM
2.5 Gb/s 1.25 Gb/s
Multi-dwelling ONTs Outdoor ONTs
ESS
Business ONTs
Voice GW EDFA
PROS
More than 4 Gigabytes of equivalent broadcast video on a separate wavelength No set-top boxes required for analog video Instant compatibility with in-home coax and TV sets Proven technology with economies of scale
CONS
No IP convergence Limited differentiation from existing cable service Overlay network for video transport must be deployed
Typical GPON Components
Optional Video Coupler for RF overlay
Fiber Splice Closures
Optical Taps
Distribution Cable Drop Cable
Feeder Cable Optical Line Terminal Optical Patch Panel Outside Plant Splitter Cabinet
Optical Network Terminals
Optional Video Amplifier Central Office Passive Outside Plant (OSP) Subscriber Premise
27 | September 28, 2008
Networks 2008
Mohamed El-Sayed
GPON: Bandwidth Allocation

Central Office
GPON OLT
GPON LT GPON LT GPON LT
Primary Fiber Flexibility Point 1:32-64 split

1.25G Sustained + 1.25G excess BW
Drop
bandwidth flexibility up to 1Gbps
1:24 split
2.5G Fixed Allocate BW
100MBps Fixed BW
Residential Triple Play

2HDTV+1SDTV 20Mbps for each 64 subs Represent 1.25Gbps Sustained Bandwidth Remains 1.25Gbps Excess Bandwidth Dynamic Bandwidth Allocation: Excess can be allocated instantaneously to anyone
User Bandwidth flexibility ++100 Mbps

GPON: Different Scenarios for Network & Subscriber Growth
Central Office
GPON OLT
GPON LT GPON LT GPON LT
Primary FFP
Drop
1 fiber
8 fibers
ducts
1 fiber 8 fibers
Improved penetration
Growth
1 fiber
8 fibers 8 fibers
8 fibers
FFP = Fiber Flexibility Point

29 | September 28, 2008
New area build out
Networks 2008
Mohamed El-Sayed
PON Evolution Options
PON Evolution towards 40G

Total PON downstream Bandwidth (Gbps) 100
...with TDM and WDM

CWDM: 4 Capacity
DL increase Better link budget More Transceivers splitters or ONT filters More capacity to existing ONTs
TDM:10G
DL & UL increase Maintained or increased High Density
4 x 10G PON TDM: 10G PON

10
Reach Density CWDM: 4 x 2.5 GPON 2.5 GPON

0 1 2 3 4 5 Downstream Wavelengths
OSP ONTs
Reuse Backwards Compatible
30 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Point-to-Point and Active Ethernet

Central Office Access Loop Home/MDU
Efficient Outside Plant
Point -toPoint
Small street/pole cabinet No remote powering Less maintenance, truck rolls,
IP Ethernet switch
Splicing CPE
Cost-effective Fiber Feeder

Active Ethernet
IP Ethernet switch Ethernet switch CPE

Few fibers in feeder section Smaller duct sizes, Less RoW, CO consolidation
Best of Both Worlds

Passive OSP CO scalability & Consol. (20+ km) Fiber Cost & Management (P-to-MP)
31 | September 28, 2008
Networks 2008
Mohamed El-Sayed
PON vs Optical Ethernet

CPE CO CPE CPE CO SW CPE CPE CPE CO CPE CPE CPE
PON
Passive Less fibre N+1 transceivers Shared medium Expensive PON interface (optics and electrical) High CAPEX Low OPEX Poor upgradability
Optical Ethernet Active Ethernet

Active Less fiber 2N+2 transceivers Dedicated links Cheap interfaces (standard Ethernet) Low CAPEX High OPEX Medium upgradability
Mohamed El-Sayed
Point-to-Point Ethernet
Passive More fiber 2N transceivers Dedicated links Cheap interfaces (standard Ethernet) Medium CAPEX Low OPEX Maximum upgradability
Broadband Access Technologies
Internet
HLR VLR
Internet
AAA GGSN
DHC P Cac he Serv er
PDSN
NMS
DHC P
Cac he Serv er
SGSN
MS
DNS
DHCP
DHCP Local Server Cache Server
PCF
BSC/RNC
Base Station
Base Station
Base Station
Base Station
CDMA 2000 EVDO Rev A

PCF = Packet Control Function PDSN = Packet Data Server Node
GSM/UMTS
BSC = Base Station Controller (GSM) RNC = Radio Network Controller (UMTS)
Evolution of 3GPP Radio Rates

Peak Network Data Rates
100000 10000
kbits/sec
1000 100 10 1 GPRS EDGE WCDMA HSPA HSPA+ LTE Technology
UL DL
Actual user rate will be substantially less, depending on many factors:

Fixed vs mobile No. of simultaneous users Distance from BTS Channel conditions
Fixed wireless can prove in in certain cases vz wireline Services definition (especially BW) different from wireline
Home Networking Several Wiring Situations

Coax Twisted pair
NID
Study
Family Room
Bed Rm #4
Wireless
X
Voice IPTV+Data
Garage
Bed Rm #1
Bed Rm #2
Bed Rm #3
Several choices of Layer 1 Technologies

MoCA (Multimedia over Coax) HPNA (HomePNATM Home Phoneline Networking Alliance) HomePlug (networking over in home power wiring) Unlicensed Wireless
Home Networking Technologies

MoCA
29 channels, 25 Mhz steps, 800-1500Mhz (860-950Mhz common)
950 2450 M hz 2450
LAN throughput of 100-135Mbps could be typical (can get as low as 50Mb/s) In the upper reaches of CATV spectrum (above 860MHz) Coexists with analog and digital channels on CATV
Satellite Downstream
HPNA
Works over Coax or twisted pair to provide a LAN of 128-320Mb/s Will not coexist with upstream of CATV
Mhz 860 5 4 -8 6 0 M h z 950
860 950 Mhz
Open Spectrum
HomePlug
Leverages existing AC wiring to create a 200Mb/s LAN (150 Mbps usable throughput) Doesnt impact anything on coax or twisted pair Good for instances where coax isnt readily available (Europe) Inherent problems with noise immunity
Cable Downstream
54
5 42 M hz
Unlicensed Wireless (e.g. 802.11n)

Not a contender for whole house video because of reliability and spotty coverage
Cable Upstream
MoCA Spectrum
FTTX Deployment: Economic Considerations
Fiber to the Most Economical Point Provide DSL and FTTH solutions for triple play Deep fiber placement of ADSL2+ and VDSL2 using fiber-to-the-node (FTTN) Deeper fiber placement using fiber-to-the-home (FTTH) High-density placement using FTTB for multi-dwelling units (MDUs)
MDU FTTP
CO Central Office
CO
MDU Multiple Dwelling Unit FTTN Fiber to the Node FTTP Fiber to the Premises
FTTN
An optimized access solution for every deployment strategy

FTTN/FTTH: Network Cost Components

CO Electronics
(e.g., PON OLT, DSLAMs, Ethernet switches)
Outside Plant (OSP)

(e.g., FTTN systems, cabinets, splitters, drop boxes, splice closures, fiber taps, power supplies & batteries, power cables, power distribution)
OSP Labor
(e.g., trenching, pulling, splicing, boring)
Customer Located Equipment

(e.g., PON ONTs, DSL modems, Ethernet media converters, residential GWs CLE / CPE (NID or media converter)
Drop Cabling
Wiring (e.g., fiber, CAT5/5E, copper).
CO Labor
(e.g., patching, inserting, testing)
Customer Premise Labor

(e.g., wiring, connecting, testing, answering questions, PC set up)
Copper or Fiber (point-to-point) Distribution
Copper or Fiber Drop IP DSLAM or Ethernet Switch Fiber Feeder Fiber Feeder Fiber Flexibility Point with Splitters Central Office with GbE Ethernet Aggregation
FTTN (active Ethernet or DSL)

CLE / CPE (ONT / ONU) Fiber Drop Fiber Distribution
PON
Tap
Fiber Drop
Fiber Feeder
Ethernet Switch or DSLAM
NT or DSL Modem FTTB-MDU
39 | September 28, 2008
Networks 2008
Mohamed El-Sayed
FTTN vs FTTH : Typical Capex Breakdown

Typically 70% of Greenfield construction costs are in distribution cable, drop, customer located equipment, and installation of these
Distribution of FTTN Costs
Distribution of FTTN Costs
CLE/CPE 26.3% Drop 30.9% Central Office 8.8% F1 Fiber Feeder 1.1% F2 Fiber Feeder 1.7% F3 Distribution (Optional) 23.9% OSP Distribution 7.2%
CLE/CPE 28.6% Drop 28.1% Central Office 0.3% F1 Fiber Feeder 1.6% F2 Fiber Feeder 2.6%
F3 Distribution (Optional) 21.8%
OSP Distribution 17.0%
40 | September 28, 2008
Networks 2008
Mohamed El-Sayed
FTTN vs FTTH: High Level Capex Comparison

CAPEX comparison FTTH/B (Paris Case )
CAPEX (Index) 20
Fiber Civil works
- 15% - 15%
15
Home/MDU cabling Cabinet install
10
CPE Access HW
5 Ref = 1 0
ADSL CO
FTTN VDSL
FTTH single homes
FTTH apartments
FTT B
The main FTTH barriers are civil work & indoor cabling Civil work is 50-80% of the total cost. Indoor cabling is 150-300 Euro/sub
FTTH : GPON vs Pt-to-Pt Ethernet

GPON GPON 2 2 levels levels of of split split 64 64 users users
1MDU 16HH Cable to switch
1:1
Point-to-point Point-to-point 64 64 users users

1:1
1:4
Cable to switch
1:1
1:16
patch panel
patch panel
patch panel
1:4
1:1
CO
16
patch panel
16
CO
1 1 1 16 16 64 = 99 64 64 64 64 = 256
GPON = 2,5 less fiber connections per user with HW (Patch Panel, Splitters) & labor (splice, test): GPON savings $$ per connected user GPON = 3 to 4 times less fiber.km CAPEX impact: Fiber ODF, space at PoP & Fiber cost ; OPEX impact: Right of ways & Fiber mgmt
GPON: Greenfield vs Overbuild

Outside Plant Construction Example based on the Cost of PON Facilities per Subscriber
$1,200 $1,000
Cost of Facilities Labor

$800 $600 $400 $200 $0
Cost of Facilities Material
Greenfield
Overbuild
Primary cost of network construction is labor

On a cost-per-bit connected, system electronics is fairly comparable (same speed = same memory, same processing, same lasers)
Difference: 20-30%
Cabling buildings with Fiber is a challenging task

Dwelling Type
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% SP IT GER GR AU FR DK LUX PT NL BE UK IRL Single Family House: Semidetached Building (< 10) Building (> 10) Single Family House: Detached Other
Cabling methods progressing fast and well Indoor Outdoor / faade Infrastructure re-use (power, gas, sewer,) BUT some critical issues - Landowner ascent - Building protection - Multi-operators? - Access chambers - Floor connect. box
Importance of private owners and real estate companies for Fiber

Micro-trenching
Traditional Cable Laying
4 cables sitting on top of each other, each with 100 fibers. Each cable is about 10 cm high
Significant optimization advance for last mile Optical Fiber networks High cost reduction Faster city planning approval Less city surveyor overhead Significantly less disruption Significantly less man-hours labor
Installation Complete
Summary
FTTN-VDSL2:
Technology of choice in overbuild distribution provided loop lengths can be managed Ideal in multi-dwelling overbuild situations where CAT5 does not exist or cannot reach In overbuild : up to 50% cheaper than all other alternatives Key advantage versus FTTN/B Active Ethernet This advantage is negated in Greenfield situations (new facilities)
FTTU-GPON:
Technology of choice in Greenfield distribution of 100Mb/s to single family residences Advantages because of line rate, passive OSP, no-power, low-cost multiplexing deep into distribution network Has financial edge in greenfield SFR applications due to speed and distribution gain 2.5Gb/s doubles capacity of 1.25Gb/s solution (EPON) Splitting 2.5Gb/s in distribution is 32 times more efficient than dedicating single fibers to each user (P2P is no option)
Active Ethernet:
Falls in-between Too expensive compared with FTTN-DSL in overbuild Less performing than GPON for greenfield
Case Studies
Outline
FTTH architectures compared Point-to-Point (P2P), Active Ethernet (AE), and Gigabit Passive Optical Network (GPON)
Input assumptions Modeling Parameters
GPON vs P2P
Reference urban network Capex/Opex modeling results Sensitivity Analysis (Tornado, MonteCarlo)
GPON vs AE
Two cases: Re-use DSL OSP and deploy new OSP cabinets Capex/Opex modeling results Sensitivity Analysis (Tornado, MonteCarlo)
Summary and Comments
48 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Introduction
A detailed economic analysis of FTTH across a range of different scenarios and parameters assuming Triple Play services (Voice, Data, Video) Three scenarios: multi-dwelling units (MDU), Single Family Residences (SFR) and Enterprise Task based operations model
Central Office
Point -toPoint
Access loop
Home
IP Ethernet switch
Splicing CPE
Active Ethernet
IP Ethernet switch Ethernet switch CPE
GPON
IP PON OLT Optical splitter ONT
49 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Traffic Assumptions
It is assumed that all FTTH technologies support current and short-to-mid term growth for residential subscriber applications High-level bandwidth requirements per subscriber used in the model Service Type 2 HDTV or 2 VoD (MPEG-4)* High-speed Internet Access VoIP Gaming Total
* Assumes max of 2 TV sets per home
Downstream BW 20 Mbps 10 Mbps 64 Kbps 2 Mbps 32.6 Mbps
Upstream BW 0 2 64 Kbps 384 Kbps 2.448 Mbps
Standard GPON at a 2.5Gbps line rate and a split ratio of 1:64 provides about 35 Mbps (committed) per user Active Ethernet switches are also configured to provide this bandwidth
FTTH: Key Modeling Dimensions/Parameters

Scenario Variables
Customer Type: Single Family Residential Multi-Dwelling Unit Enterprise Applications IP-TV Voice, HSI PTP, Business Housing Density No of buildings/sq. km Loop length to CO/POP Construction Greenfield Brownfield Transport Facilities Fiber owned Leased Outside Plant Aerial Buried Conduit Drop Cat5/DSL Fiber Splitting Levels One Two
Technologies
Cost Elements
Fiber Cables: Feeder Distribution Drop Civil Work (Feeder, Distribution): Structures/trenches Splicing, Installation OSP costs Cabinet, Splitters Fiber Management Point Patch Panel Power and Space Power node (Active) AC Floor space costs Equipment CO (shelf, packs, SFP) ODF ONT CPE Activation Truck roll to OSP Customer service visit Service activation in CO Other Operation Costs Searching for POP Provisioning activities Maintenance activities etc
GPON/EPON ------------------Pt-Pt Ethernet ----------------Active Ethernet
Mohamed El-Sayed
Urban MDU Case: Reference Network Architecture

Ethernet Switch
ODF1 P2P GPON (2-Tier) ~ 16HH CPE Fiber Trunk
splice 1:4
52 | September 28, 2008
Core Core
ONT
16Fibres
4 Fibers
80 x P2P PoP
Fiber Distribution
OLT
ODF2 ODF1
ODF1 Splitters
Example Study: Key Parameters

105 km2, 1.12 M HHP, 72K buildings HHP=100% , Take Rate Varies (10-100%) P2P : 80 Active PoP
Fiber
8 x GPON CO
BH
200 x FFP
GPON : 8 CO (Active), 200 Passive PoP Civil Works = fiber cables, In-building BW/sub ~ 35Mbps
Networks 2008
Mohamed El-Sayed
General OSP Modeling Assumptions

Assumes PoP and FFP located on circumference of circle from CO Assumes within each PoP and FFP serving areahomes are also on a circle Actual number of FFPs/PoPs depends on availability of realestate, street-layouts, density etc; model is generic to study effect of different parameters Assumes existing civil structures (e.g., sewers, ducts) are used Focus on the differences between the technologies; civil works costs assumed to be the same
Feeder
Secondary Feeder Distribution Drop P2P PoP GPON FFP (splitter)
PON Geographical Model
Urban MDU: Capex/sub

GPON-Tier 1
5000
GPON-Tier 2
P2P
4500
4000
Capex/sub (euro)
3500
3000
GPON 1-Tier saving = 11-15% P2P GPON 2-Tier saving = 14-20%
2500
2000
2-Tier GPON
1500
1000
1-Tier GPON
500
0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Take Rate (TR)

Urban MDU: Capex/sub Breakdown (20% TR)

1200
1-Tier GPON
1000
P2P
2-Tier GPON
800
Key CAPEX differences are in OSP manpower, fiber cost, ODF, CPE
Capex/sub (euro)
600
400
200
0 OSP Manpower Floor Space Building connection cost Fiber cost ODF related Active NE CPE (incl. installation) Spares
55 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Capex Breakdown at 20% Take Rate

MDU
P2P
4%
Metro Office 1 Feeder: 0.5%
POP 4%
Ethernet Switch
MDU wiring: 38% 7% ODF1 Fiber Distribution:37%

splice
9% CPE
0.5% ODF2
72K
80
GPON
CO
2%
GPON OLT
0.02% 0.2% ODF2 ODF1
Feeder: 1% 0.2%
FFP 0.3 %
0.48% ODF2
MDU wiring: 48%

splice
14% CPE 2% 1:4

splitter
4.8%
ODF1
1:16
splitter
72K
8
200
Mohamed El-Sayed
Fiber Distribution : 27%

* Blue indicates # of units
Urban MDU: Sensitivity Analysis Capex/sub (GPON - P2P), 20% TR

0.01 210 45 54 2000 30 35 150 8 7
3% 4 432 3000 8% 7500
0.03 70 135 18 6000 90 12 50 23 20

8% 12 144 1000 3% 22500 4 8
Fiber cost per m {0.02} GPON: CPE price {140} P2P: switch cost per sub {90} GPON: switch cost per sub {36} Active POP: Cost per sq-m {4000} P2P: CPE cost {60} Sewer-civil works cost per m {23} Splitter: 1:4 {100} ODF1 : Cost of patch panel per user {15} Cost of splicing a fiber to patch panel {13} GPON: CPE erosion per year {5%} Cost to test a fiber {8} Splitter: 1:16 {288} Passive POP: Cost per sq-m {2000} P2P: CPE erosion per year {5%} Cost to equip a POP office {15000} Xconnect ODF/Active NE {8} ODF2 : Cost of patch panel per user {15}
Capex Saving (GPON-P2P)/P2P
12 23
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
57 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Urban MDU: Monte Carlo (1000 iterations) Capex/sub (GPON - P2P), 20% TR
140
120
Histogram Frequency
100
80
60
40
20
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
26%
27%
28%
Capex Saving (GPON-P2P)/P2P

29%
9%
Opex Model Components

Unplanned Maintenance:
Repair activity based on equipment quantities and typical FIT data Operation Tasks included: Testing, Fault isolation, Equipment Repair (Truck roll)
Planned Maintenance:
Calculated based on equipment quantity, maintenance interval and effort, equipment clustering and location density Fiber maintenance based on total length of cables and typical yearly per meter cost Operation Tasks included: Battery replacement, Fan Filter replacement, Drive time and paperwork to document preventative maintenance, Fiber inspection/cleaning and debris removal
Centralized NOC Staffing:

Surveillance staff estimated based on total number of active devices. Operation Tasks included: 24X7 fault Monitoring, remote diagnostics, trouble ticket creation
Customer Care:
Estimate based on failure incidence (calculated for unplanned maintenance) and # of customer impacted/incident. Operation Tasks included: customer care call handling
Differences in Customer Provisioning and Disconnect Scenarios:

Cost of connecting/disconnecting a customer based on equipment locations and utilization Disconnect cost based on churn rate that are hinged on the number of providers in sharing scenarios Operation Tasks included: CPE installation, in-building fiber connection, POP/FFP connections, Testing, Inventory updates
Urban MDU: Opex/sub/ year

GPON-Tier 1
300
GPON-Tier 2
P2P
GPON has significant Opex/sub savings compared to P2P

250
Opex/sub (euro)
P2P
200
GPON 2-Tier saving = 50-56% GPON 1-Tier saving = 41-48 %
150
100
1-Tier GPON
50
2-Tier GPON
0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Take Rate
Urban MDU: Opex/sub/year Breakdown (at 20% Take Rate)

120
100
P2P Opex/sub (euro)

80
1-Tier GPON 2-Tier GPON
Key difference between GPON and P2P are RoW charges (sewer ducts, per cable, building), floor space (active + passive), power and customer care
Note: Services operations costs not included
60
40
20
RoW
Fiber maintenance (planned, unplanned)
PoP floor space
Power consumption
AC
Active Other maintenance maintenance
Customer care
61 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Urban MDU vs SFR: Capex/sub

OSP Manpower
2500
Floor Space
Building connection cost
Fiber cost
ODF related
Active NE
CPE (incl. install)
OSP manpower + fiber cost per sub lower for MDU

2000
Capex/sub (euro)
1500 568
1000
288
150 76 500 887 388 56 996 388 388
176 0
168
205
SFR-GPON
62 | September 28, 2008
MDU-GPON 1-Tier
Networks 2008
MDU-GPON 2-Tier
SFR-P2P
MDU-P2P
Mohamed El-Sayed
Suburban SFR Study: Capex/sub

GPON-Tier 1
10000
P2P
9000
8000
Assumptions: 20,000 HHP/ CO or PoP; Area = 10 km2, 10 FFP GPON > P2P ~ 20-23% P2P
Capex/sub (euro)
7000
6000
5000
GPON 1-Tier cheaper than P2P for an average sub-urban SFR case Loop lengths are longer compared to MDU case benefiting GPON
GPON
4000
3000
2000
1000
0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Take Rate
Suburban Study: Opex/sub

GPON-Tier 1
2500
P2P
2000
Assumptions: 20,000 HHP/ CO or PoP; Area = 10 km2, 10 FFP GPON savings compared to P2P~ 42-45%
Opex/sub (euro)
1500
1000
P2P
500
GPON
0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Take Rate
GPON vs AE Study: Urban MDU Scenario/Assumptions:

The operator has deployed DSLAMs to provide ADSL/VDSL broadband access to some end users A number of fiber loops can be provisioned to provide FTTH access to users. Which technology is more economical to deploy Ethernet or GPON? For Ethernet deployment:
o o o o o Ethernet card can be installed in existing (DSLAM) street cabinets Civil work for distribution network only (cabinet to sub) is included New fiber from cabinet to CO using existing civil work only new fiber installation 4500 cabinets to cover an urban area Two Cases
Case 1: Reuse existing DSLAM shelf to install AE cards Case 2: New OSP cabinets for AE no DSL
For GPON deployment:

o o Splitters installed in some of the street cabinets and OLT in the COs; 200 FFPs for GPON Civil work and fiber installation in the feeder and distribution network assumes mostly greenfield buried installation
65 | September 28, 2008
Networks 2008
Mohamed El-Sayed
GPON vs AE Case 1: Reuse Existing DSLAM Shelves - Capex/sub

3500
For high TR (>70%), GPON and AE have similar Capex/sub (better utilization of GPON OLT ports & splitters)
3000
2-Tier GPON
2500
For TR <50%, Active Ethernet Capex/sub is lower than 2-Tier GPON (~5%); 1-Tier GPON (~10%)
1-Tier GPON
Capex/sub (euro)
2000
1500
1000
Active Ethernet
500
0 10% 20% 30% 40% 50%
Take Rate
60%
70%
80%
90%
100%
66 | September 28, 2008
Networks 2008
Mohamed El-Sayed
GPON vs AE Case 1: CAPEX Breakdown, 20% TR

1200
1-Tier GPON
1000
AE
2-Tier GPON
800
Capex/sub (euro)
600
Active Ethernet saves on total fiber because of aggregation in the OSP cabinet
400
zero for AE
200
0 OSP Manpower Building PoP Building connection cost Fiber cost ODF related Active NE CPE (incl. installation) Spares
67 | September 28, 2008
Networks 2008
Mohamed El-Sayed
GPON vs AE Case 1: Opex/sub

180
160
GPON 2-Tier saving = 5-58%

1-Tier GPON
140
120
GPON 1-Tier saving only for TR > 20% (up to 50 % savings at 100%TR) Active Ethernet
Opex/sub (euro)
100
80
60
2-Tier GPON
40
20
0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
FTTH Take Rate

GPON vs AE Case 1: Opex/sub Breakdown 20% TR

80
1-Tier GPON
70
2-Tier GPON
60
Active Ethernet
50
opex/sub (euro)
40
For low TR (<20%) Active Ethernet and GPON 2-Tier are close
30
20
10
RoW (fiber)
Cabinet housing (RoW)
Power consumption
AC
Customer care
69 | September 28, 2008
Networks 2008
Mohamed El-Sayed
GPON vs AE Case 2: New OSP Locations for FTTH no DSL Capex/sub

4000
3500
GPON 2-Tier saving = 5-8%

2-Tier GPON
3000
GPON 1-Tier saving = 1-5 % Additional capex to build OSP locations Capex includes new civil works cost
1-Tier GPON
Capex/sub (euro)
2500
Active Ethernet
2000
1500
1000
500
0 10% 20% 30% 40% 50%
Take Rate
60%
70%
80%
90%
100%
70 | September 28, 2008
Networks 2008
Mohamed El-Sayed
GPON vs AE Case 2: Capex Breakdown 20% TR

1200
1-Tier GPON
1000
2-Tier GPON
P2P
800
Capex/sub (euro)
600
Significant Expense for AE

400
AE still saves on total fiber because of aggregation in the OSP cabinet
200
0 OSP Manpower Construction of OSP cabinet Building connection cost Fiber cost ODF related Active NE CPE (incl. installation) Spares
71 | September 28, 2008
Networks 2008
Mohamed El-Sayed
GPON vs AE Case 2: Opex/sub

250
200
1-Tier GPON
GPON 2-Tier saving = 37-58% GPON 1-Tier saving = 25-50 %
Active Ethernet Opex/sub (euro)

150
Lower OPEX/sub favors GPON

100
50
2-Tier GPON
0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Take Rate
GPON vs AE Case 2: Opex/sub Breakdown, 20% TR

80
1-Tier GPON
70
2-Tier GPON
60
Active Ethernet
50
opex/sub (euro)
Active Ethernet has higher Opex due to large # of active OSP elements (4500 cabinets for AE, 200 FFP for PON)
40
30
20
More points of failure, risk of vandalism
10
RoW (fiber)
Cabinet housing (RoW)
Power consumption
AC
Customer care
73 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Impact of Fiber Sharing - Assumptions

If the Primary Operator (operator laying the infrastructure) is GPON-based: provides the other operators (competitors leasing fiber) with fiber access at either the last mile drop, FFP or CO. For e.g., if the Primary Operator deploys 2-Tier GPON in an MDU, w/ a splitter in the basement of the building and shares at the building, the other Operator (if GPON) installs a new splitter at the basement to connect to the customer If the Primary Operator is P2P-based: always shares at the POP (a distinct fiber to each customer terminates only at the POP) The other operators deploy their own equipment (ODF, splitter, Active NE etc.) at the site where sharing occurs and connect to the customers fiber. It is assumed that the 3rd party operator pays leasing costs for fiber/space/co-location etc., but these tariffs are not modeled here. The goal of the model is to compute additional fiber capacity needed to be deployed by the Primary Operator, and up to 4 PON/4 P2P
74 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Impact of Sharing Fiber Infrastructure

Operator A
GPON LT 1 PON 1
Sharing at FFP
Sharing Drop Cable
PON operator A
Operator B
PON 1 GPON LT 1
Fiber Flexibility Point

PON operator B
Operator A 1x64 Splitter
Operator C
Point to Point Ethernet
Operator B 1:64 Splitter
P2P operator C
Sharing at CO/POP
Share inbuilding wiring

Operator A Splitter
How much additional fiber should Primary Operator deploy? What is the impact on GPON vs. P2P economics?
Operator B Splitter
MDU
Sharing Case 1 (Urban MDU) Primary Operator Shares w/ 3 Other PON Operators
G-2T-No Share
12000
G-2T-FFP
G-2T-CO
P2P
10000
Assumptions: Market shares Primary Operator (42%), PON Op 2 (33%), PON Op 3 (17%), PON Op 4 (8%)
CAPEX/sub in Euros
8000
P2P
6000
Cost advantage of GPON over P2P is maintained even when Primary Operator over provisions network for other GPON operators Above result holds independent of where sharing occurs in the network
4000
2000
2-Tier GPON (No sharing, Sharing at FFP, Sharing at CO almost overlap)

4% 8% 13% 17% 21% 25% 29% 33% 38% 42%
Primary Operator Take Rate

Sharing Case 1: Breakdown of Capex Components (20% TR)

600
Cost advantage of GPON is maintained when sharing w/ other GPON operators, due to incremental changes in OSP manpower, fiber and ODF costs
500
400
CAPEX/sub in Euros
GPON No sharing
GPON-FFP sharing GPON-CO sharing P2P
300
200
100
0 OSP Manpower
77 | September 28, 2008
PoP Floor Space
Fiber cost
ODF related
Active NE
CPE (incl. installation)
Spares
RoW
Power consumption
Networks 2008
Mohamed El-Sayed
Sharing Case 2 (Urban MDU) Capex Primary Operator Shares w/ 4 Other P2P Operators
G-2T-No Share
18000
G-2T-FFP
G-2T-CO
P2P
16000
Capex/sub (euro)
Sharing at CO, GPON < P2P by 3%

14000
Sharing at FFP, GPON < P2P by 12-15%

Sharing at CO
12000
10000
Hence, ideal situation for GPON operator is to share fiber at the FFP
8000
P2P
6000 4000 No
sharing Sharing at FFP
2000
0 3% 6% 9% 12% 15% 18% 21% 24% 26% 29%
Primary Operator Take Rate

Sharing Case 2: Capex Impact of Sharing w/ 4 Other P2P Operators

600
500
Additional OSP fiber, RoW and manpower costs diminishes advantage of GPON compared to P2P when sharing at the CO
400
Capex/sub (euro)
GPON No sharing
GPON-FFP sharing GPON-CO sharing P2P
300
200
100
0 OSP Manpower
79 | September 28, 2008
PoP Floor Space
Fiber cost
ODF related
Active NE
CPE (incl. installation)
Spares
RoW
Power consumption
Networks 2008
Mohamed El-Sayed
Summary
Greenfield & Overbuild FTTH deployment: GPON provides lower Capex and Opex/sub compared to P2P across all take-rates.
Significant Day 1 OSP investment and higher Right-of-Way (RoW) Opex for P2P Average savings: Capex ~ 20% (MDU/SFR); Opex = 55-60% (MDU), 40-45% (SFR) 2-Tier GPON cheaper than 1-Tier (for MDU) by 0-10% (function of take rate)
Hybrid Deployment (using DSLAM cabinets): Overall, GPON and AE Capex are similar, but GPON provides significant OPEX savings
Small Capex savings for AE vs. GPON (0-5%) in areas with existing DSLAM cabinets. However GPON offers Opex savings of 5-58% In areas with no DSLAMs, GPON Capex savings of 5-8%. However, GPON Opex savings are 37-58%
Key sensitivity analysis parameters impacting GPON Capex savings:

Fiber cost/meter; GPON CPE cost; Ethernet switch cost; remote Ethernet switch housing cost; and GPON OLT cost Increased GPON deployment by major carriers should further lower GPON costs
Key sensitivity analysis parameters impacting GPON Opex savings:

Right-of-Way; Cost of energy and Fiber maintenance costs Energy costs are projected to increase in the future; further increasing GPON savings
Networks 2008 Mohamed El-Sayed All Rights Reserved Alcatel-Lucent
80 | September 28, 2008
Other Comments
Fiber sharing:
Cost advantage of GPON over P2P is maintained even when Primary Operator overprovisions the network for other GPON or P2P operators Sharing at FFP is less costly for the primary GPON operator than sharing at the CO
Another study shows that there may be some special situations where P2P Capex is similar to GPON Capex for non-large scale deployments (outside scope of this paper)
For a very small # of HHPs (<3K) or small serving area/CO (<1km2) like an island; however such deployments tend to be very small
Newer, more cost-effect fiber deployment technologies such as microtrenching will help reduce overall FTTH deployment costs, but will not make P2P cheaper than GPON
81 | September 28, 2008
Networks 2008
Mohamed El-Sayed
GPON vs EPON Study - Assumptions

Objective: Compare GPON vs EPON Capex/Opex investments (e.g. China) 5 year (2007-2011) deployment period in an Asian metro area Customer types:
Single Family Residential (FTTH) Multi-dwelling Units (FTTC+VDSL2) Enterprises
20% TR 20% TR 25% TR
Each type modeled independently Services bandwidth:

Grows from 10 Mbps to 50 Mbps
Cost items modeled: Active NE (CO switch, CPE)

Passive elements (splitter, ODF, fiber) OPEX (space, power)
Figure: Subs and growth forecast
Network Modeling Assumptions for SFR, MDU and Enterprise

EPON: 1:32; GPON: 1:64
SFR: FTTH Distribution Fiber

CLE ONT Fiber Drop
200 fibers/cable
O L T
ODF
Fiber Feeder
~1000 max subs/ FFP

Fiber Flexibility Point with Splitters Tap
~ 2km
Central Office
Cost OLT: GPON/EPON = 2 Cost ONT: GPON/EPON=1.3 Cost 12 VDSL2 ONU: GPON/EPON=1.03
~ 1km
EPON: 1:4; GPON: 1:8
Fiber Drop
MDU: FTTBasement
MDU ONU + 12 p VDSL2
Tap
EPON: 1:32; GPON: 1:64
Tap
Enterprise: FTTBusiness
Notes: OSP: Feeder fiber material cost only; Distribution and civil works cost same for EPON and GPON CO: ODF connects to OLT, GPON ,and EPON
Business ONT
Single Family Residential (SFR) : PV of GPON Cost Savings
BW (Mbps):10
20
30
40
50
Present Value (RMB) Breakeven in mid 2010 PV of savings ~ 13.2 Mil RMB
84 | September 28, 2008
Networks 2008
Mohamed El-Sayed
SFR : Breakdown of Cost Difference (EPON-GPON)
GPON:
Cost (RMB)
OLT breakeven in 2009, splitter savings in 2009 Significant savings in OLT, fiber, splitters in 2011
85 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Single Family Residential (SFR) : Sensitivity Analysis

17.0% 13,175,709
Sensitivity Analysis of GPON savings over EPON (+- 20%)
86 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Multi-Dwelling Unit (MDU) : PV of GPON Cost Savings
BW (Mbps):10
20
30
40
50
Breakeven in early 2009 Present Value (RMB) PV of savings ~ 80.8 Mil RMB
87 | September 28, 2008
Networks 2008
Mohamed El-Sayed
MDU: Breakdown of Cost Difference (EPON-GPON)
GPON: OLT breakeven in 2009, fiber savings start in 2009
Cost (RMB)
Significant savings in OLT, fiber, splitters in 2010 and 2011
88 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Multi-dwelling Unit (MDU): Sensitivity Analysis

18.4% 80,875,553
Sensitivity Analysis of GPON savings over EPON (+- 20%)
89 | September 28, 2008
Networks 2008
Mohamed El-Sayed
EPON vs GPON Study Summary

EPON provides a lower start-up cost, but requires significant investment in future years All cases show that GPON has lower Present Value than EPON and is more future proof against BW and subscriber growth. Savings = 17% (SFR), 19% (MDU) and 30% (Enterprise) Sensitivity analysis indicates the key parameters impacting investment are
Subscriber Bandwidth: If BW stays below 20 Mbps, EPON becomes more economic than GPON
GPON ONT and ONU costs are expected to go down relative to EPON >> higher PV
90 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Operators Experience
Top BB countries end 07 (>2 M BB subs)

FTTx home passed (% HH)
5Mio BB Subs FTTN VDSL / FTTA FTTBuilding / FTTA FTTHome / FTTA Tbd
Hong Kong 80% Japan 60% Switzerland Taiwan Sweden Denmark Canada France Spain 0% 20% 40% 60% Netherlands Australia UK 80% 100% South Korea
40%
Belgium USA Germany
20%
Turkey Poland Argentina Mexico Brazil Russia India
Source: Alcatel-Lucent
China Italy
0%
Broadband subscribers (% Households)

Mohamed El-Sayed All Rights Reserved Alcatel-Lucent
II
FTTX Strategy for Major Operators

Countries
Australia Belgium China Denmark France Germany Hong Kong Iceland Ireland Italy Japan Korea New Zealand Norway Singapore Spain Sweden Switzerland The Netherlands UK USA and Canada
Mohamed El-Sayed
Incumbent Alternative Munis/util.

Cable Cable Cable
Public announcements in top BB countries

FTTN P2P/AE N/A or TBD FTTAmplifier PON
Cable Cable Cable Cable Cable Cable Cable Cable
Source: public announcements 93 | September 28, 2008
Networks 2008
Verizon
Competition with MSOs, subscribers retention Started with BPON but now deploying GPON with RF Overlay Home networking based on MoCA but plans to use HPNA Complete bundled offer of network and services Recently eliminated all analog TV and is now offering 100 HD channels and 50/30 Mbps Internet service Penetration rate is now 20%; planning to go up to 40% 10,4M connected Households mid-08, 23M planned end 2010 Cost per HHP: $782 (website article and consistent with Verizon FIOS briefing) Cost per HH-connected: $718 Cost per sub (at 50% TR) = $782 x 2 + $718 = $2282 (consistent with expectation of $2000$2500)
94 | September 28, 2008
Networks 2008
Mohamed El-Sayed
AT&T
Deploying ADSL2+, VDSL, GPON Triple Play service GPON in greenfield locations Now has 21.8M million primary residential lines Planning to pass 18 million homes by 2008
1M will be FTTP Rest is FTTN mix of ADSL2+/VDSL/bonding with $4-5 billion in capex investment
Fiber is deployed within a few thousand feet of the home, readying the neighborhood for FTTH at some point Estimated expense of $360 per home passed; $150 per home connected
Cost per sub (at 50% TR) = $360 x 2 + $150 = $872
Plans call for deployment completion in 2-4 years
95 | September 28, 2008
Networks 2008
Mohamed El-Sayed
Other Worldwide FTTH Activities
NA
AT&T: FTTN, GPON VZ: GPON Bell Canada FTTN >> GPON Qwest: BPON looking at FTTH options Numerous municipalities deploying P2P Ethernet, GPON APAC EMA China field trials Japan Volume deployment of EPON; NTT testing GPON Taiwan EPON; testing GPON India Bharti & BSNL decided on GPON Australia GPON evaluation Singapore In field trials
Telefonica has announced lab trials GPON in Nordics KPN: VDSL/AE >> GPON Kuwait MOC deploying GPON Free deployed AE in Paris
LAM
Telefonica in Argentina in lab trials Telmex
96 | September 28, 2008
Networks 2008
Mohamed El-Sayed

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1 | September 28, 2008

All Rights Reserved Alcatel-Lucent

2 | September 28, 2008

All Rights Reserved Alcatel-Lucent

High Speed Internet (HSI)

High Availability Increased Bandwidth

Low Latency High Stability

Access networks must evolve to support these services

North America Consumer Internet, PB per yr

4 | September 28, 2008

All Rights Reserved Alcatel-Lucent

Still More Data!! TV 3 DVR 2

Standard Def Standard Def

Exponential growth! Bandwidth per subscriber (with MPEG-4)

Downstream Peak (Mbps)

Upstream Peak (Mbps)

TV/Video HD Radio Music Games Internet Access

7 | September 28, 2008

All Rights Reserved Alcatel-Lucent

Traffic Model Key Parameters

Channel change burst rate

8 | September 28, 2008

All Rights Reserved Alcatel-Lucent

ASDL2+ bonding with bonding capable CPE, or VDSL2

Introduction of VDSL2 bonding with bonding capable CPE OH OH HSI

Assumes quality of picture competitive with digital satellite/cable

HSI= high-speed Internet access

9 | September 28, 2008

All Rights Reserved Alcatel-Lucent

Broadband Access Technologies

11 | September 28, 2008

All Rights Reserved Alcatel-Lucent

The Basic Coax Based CATV Network

The Basic HFC Based CATV Network

12 | September 28, 2008

All Rights Reserved Alcatel-Lucent

Bandwidth Capacity of Todays Cable Plant (with 500 Homes/Fiber Node)

13 | September 28, 2008

MDU MDU Remote DSLAM

CO-Based ADSL2+ or VDSL

MDU = Multi-Dwelling Units

All Rights Reserved Alcatel-Lucent

Evolution of DSL Speeds

V.90 V.34 V.34

All Rights Reserved Alcatel-Lucent

DSL Reach vs Bit Rate

16 | September 28, 2008

All Rights Reserved Alcatel-Lucent

Distance from CO to Subscriber

Percentage of Customers Reached

Italy U.K. Germany India U.S. Sweden 7 km

17 | September 28, 2008

All Rights Reserved Alcatel-Lucent

Triple Play is Challenging CO-based Deployments

% subscriber from CO (Europe) (NA)

0.5 km(1.7Kft) Average real Conditions 1 km (3.3Kft) 3 km (9.9 Kft) 6 km (19.8Kft)

Ethernet Switch (CO)

Need to determine optimal cabinet location and size

19 | September 28, 2008

All Rights Reserved Alcatel-Lucent

Access to unbundled loops High Density / Low Power

CO / CLEC Regional Center

Fiber In the Loop via ONU