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$100 for GPON or EPON
Written by Dave Burstein   
Sunday, 30 May 2010 13:30
china_telecom_ceo_3g_colorfulWei Leiping of China Telecom holds competitive tenders for 10M lines in order to bring down prices. In March, the bids for both GPON and EPON came in at around $100, end to end including a basic network ONU and home ONT. Korea reports similar prices. DSL, cable modems and simple Ethernet (100K or gigabit) remain cheaper, $20 to $50 in million quantities, but the difference over a ten year or even three year service life is small.

     A world-class technologist explained to me last September what it takes for GPON to match EPON in price. "The major component difference is that standard GPON is designed for a 20 kilometer reach and requires a more powerful laser. If the customer doesn't need that reach, the manufacturing cost is similar." Most of China is so densely populated the range isn't necessary and Wei is going for the savings.

    Verizon is pressing to actually extend GPON range to 100 kilometers so it can eliminate many central offices for huge opex savings. Like KPN in Holland, they expect windfalls from real estate sales.
  Around 2002, Verizon developed a strategy of closing most exchanges. Paul Lacouture told me that one large soft-switch can serve what is currently 10 typical exchanges. A single outside terminal can serve into the thousands of users and is all you need in many locations. Bill Smith, rebuilding BellSouth after Katrina, considered replacing many of the destroyed exchanges with terminals.

   Few other carriers can expect a price as low as China Telecom. Most order in much smaller quantities, are dependent on a single supplier, and require expensive add-ons such as third wavelengths for video and substantial batteries for backup.
 
   China Mobile's FTTH build is forcing China Telecom to go faster. In year 2010, China Telecom will have 0.5-1 million GPON subscribers. Between GPON and EPON, Wei doesn't prefer either of the two technologies. Both are mature technology selections now.

   Special thanks to Cordacord for the Leiping comments http://bit.ly/b9B6Gu

    Note: an earlier draft said "In year 2010, China Telecom will have 0.5-1 million GPON subscribers." based on a Chinese press report. I have since learned that figure is for GPON while millions more EPON lines have been installed.