|$1/port GPON OLT at China Unicom|
|Written by Dave Burstein|
|Wednesday, 25 May 2011 19:18|
If you want to buy five million lines of fiber, Huawei will offer an incredible price on the OLT system box. Jeff Heynan of Infonetics tells me China Unicom is paying only $1/home, hoping to thereby also sell the ONT home box and the rest of the system. Unicom could go elsewhere for the home units, so it's not a deceptive "give away the razor and then they have to buy the blades," although carriers prefer to buy both sides from a single source. OLTs this cheap mean there's no reason to install anything else in a new building, thereby ensuring the fiber vendors continuing sales of cpe, maintenance and system support. Ericsson has part of the Unicom contract as well and a senior source tells me they also had to bid very low. With ONT, the price is less than $100 home.
Outside of China, volumes are much lower and prices higher. Carriers in the U.S. typically need an outdoor housing and backup battery, further driving up prices. I bet Mike Quigley in Australia is paying Alcatel far more than the Chinese pay. Quantity 1,000 and even quantity 10,000 buyers are in a completely different situation, because the total system cost must be spread over very few units.
Heynan expects U.S. fiber sales to partially recover from truly terrible last year.
Early in 2010, Verizon cancelled 2M lines of FiOS scheduled and most of the remaining 6M lines in the pipeline. They've resumed, with Heynan expecting 600-800K/year from Verizon and modestly more from the small carriers. That's far below the 3M a year Verizon had been doing.
In Europe as in China, governments want fiber while carriers don't want to spend money. Deutsche Telekom and British Telecom are both doing more fiber home and less fiber-DSL (FTTN) than they planned a year ago. One reason is fear of DOCSIS, rapidly making inroads in Germany. The lower equipment prices are also inspiring a modest shift to fiber, although DSL will definitely be ascendent across most of the continent for at least a decade.