Broadband access equipment sales were strong for the first quarter of 2022, increasing 14% compared to the same period of 2021, according to a new report from Dell’Oro Group. And a large part of that growth was driven by XGS-PON sales, said Jeff Heynen, Dell’Oro Group lead analyst for broadband access and home networking, in an interview with Telecompetitor.
“North America is head and shoulders above the rest of the world” when it comes to XGS-PON, said Heynen, who noted that Dell’Oro Group forecasts nearly 800,000 XGS-PON ports to be sold in 2022, up from 94,000 ports in 2020.
North American service providers have moved away from GPON to equipment that can support XGS-PON, even if they don’t immediately deploy the multi-gigabit symmetrical speeds that XGS-PON can deliver, Heynen explained.
As a result, shipments of XGS-PON optical line terminals (OLTs) that are installed in service provider central offices, are outpacing sales of the XGS-PON optical network terminals (ONTs) that are installed at the customer premises.
Competitive fiber broadband equipment based on the NG-PON2 standard is not nearly as popular as XGS-PON. Heynen noted that only about 2,400 NG-PON2 ports were sold in 2021 – although that should increase as Verizon begins to deploy the technology more broadly.
Verizon is alone among major U.S. fiber broadband service providers in having chosen to use NG-PON2, rather than XGS-PON, to support multi-gigabit symmetrical service. While NG-PON2 has several advantages over XGS-PON, including greater capacity, the downside is that it costs three-and-a-half to four times more than XGS-PON on a per-port basis, according to Heynen. And that’s for the OLTs. There is an even wider price difference for the ONTs.
Heynen noted, though, that NG-PON2 costs are decreasing, thanks to coherent optics and colorless technology.
Behind the Strong Broadband Equipment Sales
The strong growth of fiber broadband may be surprising to those who expected to see a dampening effect from supply chain challenges. But according to Heynen, sales have remained strong, in part because service providers may be stockpiling equipment.
He also noted that sales of OLTs have been stronger than for ONTs because manufacturers have emphasized OLT production.
“You can’t have subscribers unless you have the infrastructure,” he observed.