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Course of Lectures about

Optical Information Superhighway Construction


Core Backbone network Hotspot Metro network Destination FTTH

Ren Hailan
Wuhan Research Institute of Post & Telecommunication

Agenda

Background of FTTH FTTH Status and Forecast FTTH Technology Basics FTTH in China

Telecommunication Trends
Broadband
Broadband Access High Capacity Transport

Optical Transport High Capacity Components

Convergence
Multiple Services Transport-bearer Access Technologies Fixed-mobile

Carry graded Internet Convergence Regulations

Personalization
Mobility Personalized Services Integrated Wireless Systems Open Service Platform

NGN is for All the Future Networks


Next Generation Wireless Network 3G\WLAN\WIMAX Next Generation Access Network DSL\FTTH

End-to-end, evolved, converged total solution Next generation Universal protocol based packet network switching network Open platform

Softswitch

Service driven With switching as the core Next Generation Transport Network ASON/WDM Next Generation Internet IPV6

Evolution to NGN Access Network


Narrow BandBroadband

D i al U p
5 6K

AD S L
1-20M

F T Tx + V DS L
5 0M

FT T H
100M

Single Service Integrated Services


Integrated Single service Service

SeparatedConverged
Narrowband Integrated Fixed Wireless Broadband

Why FTTH?

FTTH: Fiber To The Home HTTF: How To Trade Fiber

FTTH Driving Forces


Services
New applications (Gaming, VOD, P2P, HDTV) Each family needs about 60M b/w Promotion to other industries Overall market: 200-380 B /year in China Progress in op-electronics and micro-electronics FTTH cost (system, fiber, device) drops dramatically LEC vs. CATV CLEC vs. ILEC Governments new regulations to encourage FTTH deployments

Market Technology Competition

Regulation

Access Still the Bottleneck

Backbone
160X10G DWDM ULH: 10G 3000km 40G SDH

Metro
MSTP CWDM/DWDM Metro GE

Access
Dial-Up ADSL LAN

ASIC Mores Law

Video Application Needs FTTH

Access rate

ADSL Cannot Meet the Needs

Neither Current Wireless

WiMAX

Wi Fi

Agenda

Background of FTTH FTTH Status and Forecast FTTH Technology Basics FTTH in China

Globe FTTH Update

Japan

FTTH users from 531,000 in July 2003 to 2.03 million in Sept 2004 Forecast 7.7 million by 2007 Massive deployments started in 2004. 200,000 users by mid 2004 Verizon plan 3 million by 2005; SBC plan 19 million by 2007; Bellsouth plan 2.8 million by 2009 245,000 FTTH users in July 2003 with 10M as the typical bandwidth Provide E-magazine, VOIP phone, etc. 145,000 FTTH subscribers in July 2003, more than half of BB subs Provide voice, data, VOD, E-gaming, VoIP, CATV Also have FTTH deployments and future plans

United States

Sweden

Italy

Netherlands and Australia

Global Broadband Statistics


Broadband lines by region
North Am erica 29%

Asia 44%

FTTH lines by region


North Am erica 9%

CALA 2%

EMEA 25%

CALA 0% EMEA 21%

Asia 71%

Source: RHK, Corning, Point Topic Q2 2003

Global FTTH Forecast


FTTH Subscribers CAGR 220%

Source: Cahners In-Stat Group, RHK 2003

Agenda

Background of FTTH FTTH Status and Forecast FTTH Technology Basics FTTH in China

Access Network

Access Network
The network portion between CO and the user Function includes cross connect, multiplexing, transport, but no switching Also known as local network, local loop, or subscriber loop

Optical Access Network (OAN)


The set of access links sharing the same network-side interfaces and supported by optical access transmission systems.

OAN Reference Configuration


Q3 AN system management functions

ONU

S/R

R/S Service node functions

ODN

OLT

AF

ONU (V) reference point SNI

(a) reference point (T) reference point UNI User side Network side
T1520720-96

OAN Network Architecture


O N T N T FTTH fibre F T T B /C fibre

copper

O N U

O L T

N T

copper

O N U

FTTCab fibre

h om e n etw ork UNI

access netw ork


SN I
T 1 5 28 1 1 0 -9 8

O N U O ptical N etw ork U n it O N T O ptical N etw ork T erm in ation O LT O ptical Lin e T erm in ation N T N etw ork T erm in ation

Terminologies

FTTH Fiber To The home FTTO Fiber To The Office FTTC Fiber To The Curb or Cabinet FTTB Fiber To The Building FTTF Fiber To The Floor FTTP Fiber To The Premises FTTN Fiber To The Node FTTX Fiber To The eXchange FTTx General term for all of above

FTTx
Fiber Copper

CO CO
Splitter

Active Module

FTTH Defined
ITU-T: Fiber to the householdno copper
between CO and households

FCC: H includes both household and small


business

We Extend: H includes individual household,


small business, and multi-dwelling apartment building

FTTP Target Market


High end residence, especially the new builds, will be the starting point for FTTH They are wealthy, seeking for modem life with advanced technologies High end residence Large scale deployment, easy for planning, deployment and maintenance

Most users in business building/CBD requires high bandwidth, integrated services, and can generate high ARPU Triple play plus TDM leased lines Business/CBD

Internet centers are very popular in China, they usually closely located to each other and need large amount of b/w ADSL does not meet b/w requirements, FTTP a good solution Internet Center Because closely location, PON is a good choice

FTTO Example
Building A Building B
Company E

Internet
Teleom building

BP5001 (ONU)
Company A

Company F Company B Company G Company C Company H

Company D

(ODN)
Company I

BP5012
(OLT)

Basement

E1/T1 Convergence
EPON access

N fibers

Existing PDH access


1 fiber

FTTH Example

High-end MDU

High-end MDU

House

FTTH System Requirements


Integrated Servicevoice, video, data, multimedia, TDM High Capacityfinal b/w about 100Mbps/home Low Cost 800/home Scalabilitybandwidth/home#subscribers/system Manageabilitysubscribers, provision, fault, performance, security, billing Interoperabilityexisting equipment, multi-versions, standardization Availabilitymaximum failure/year, smooth upgrade Flexibilityservice types, bandwidth, accounting/billing, system protection

FTTH Generic Architecture


Network Part
PSTN

Access Part

User Part

OLT Internet

ODN

ONU

CATV Net 1-20km 50-300m

Beyond FTTH Access


PSTN PSTN

MSTP
OLT

OLT

Internet CATV Net CATV Net Internet

Network Side

RJ45

WLAN

Home Side

Cable

ONU

RJ11

Fiber

ONU

75 75

End-user Multiplex Mechanism


Fiber-D
CO
1 2 1 2 1 2

WDM
CO

(1, 3, 5 ) (2, 4 6, )

3 4

1 2 5 6

TDM
CO

1 2

1 2

1 2 1 2

FTTH Architectures
Single level P2P
N pair of low speed O-modules N long fibers N ports at CO No active components No b/w limitation

Two level P2P


1 pair high speed O-modules N pair low speed O-modules 1 long fiber + N short fibers 1 port at CO Active components No b/w limitation

CO

CO

Fiber in the Building


1 pair high speed O-modules 1 long fibers 1 port at CO Active components B/w limitation

CO

PON
N+1of low speed O-modules 1 long fiber + N short fibers 1 ports at CO No active components No b/w limitation

CO

PON with 3 Wavelengths


VSB-AM VSB-AM

1.55

1:16

Filter-1

1:32

Filter-2 1.55

CATV

. . .
TDM

. . .

TDM

1.49 1.31

Internet PSTN

OLT

1.49 1.31

P2P vs. PON


P2P
CO
OLT

PON
4dynamic bandwidth sharing
CO
OLT

N ports

31 port

N fibers low speed module

1 1 fiber 5 high speed module

2N transceivers 2 N+1 transceivers

FTTH Topology

How Does PON Work?


True broadcast downstream, Each ONU filters its own users traffic Bandwidth statistic multiplexing

Upstream time slicing No collision No packet fragmentation Dynamic bandwidth allocation Fast burst synchronization

PON: P2MP Technology


Same topologyP2MP fiber

APON
Proposed by FSAN and standardized by ITU-T ATM encapsulation Standard most mature Used in US and Japan To be replaced

EPON
IEEE EFM standardized 802.3ah Ethernet encapsulation Standard mature Rapid growth in market Widely used in Japan

GPON
Proposed by FSAN standardized by ITU-T GEM encapsulation Standard on going Few vendors

Different encapsulation

APONEPON and GPON


APON GPON EPON

v id e o

v id e o
POTS POTS

v id e o d a ta d a ta
TDM

L5

POTS

d a ta
TDM

TDM

L4 L3

T C P /U D P

T C P /U D P

T C P /U D P

IP

IP IE T F

IP

ETH

ETH

PW E

L2

A A L 1 /2

AAL5

A T M C e ll

G E M F ra m e

E th e rn e t F ra m e

L1

P O N P h y s ic a l L a y e r

EPON: Multiplexing
EPON use WDM to realize bi-directional transport on a single fiber
1490nm

1310nm

In order to distinguish the signals in two different directions, two multiplexing technologies adopted TDM for downstream TDMA for upstream

EPON: Downstream
Broadcasting mode
ONU-specific packet ONU-specific packet

Splitter Variable length packets IEEE 802.3 format After registration, ONU is assigned unique LLID(s) Before transmitting a packet, an LLID was added into every packet After receiving a packet, OLT compares the LLID with its LLID registration listONU only accepts those packet that has its own LLID or broadcasting packet

EPON: Upstream
TDMA mode
ONU-specific packet ONU-specific packet

End-user 1

End-user 2
Packet in IEEE 802.3 format with viable length

End-user 3

EPON: OLT and ONU

OLT Generate timing message used as

ONU ONU synchronize with OLT

system reference time Assign bandwidth using MPCP frame Ranging Control ONU registration

through timing message ONU waiting for (gate ONU perform discovery operation ONU waiting for authorization to send data

GPON System Architecture

PON Protection
Trunk only protection Full protection

Lower reliability and lower cost Suitable for high-end residential users and small business users

higher reliability and higher cost Suitable for high-end business users

FTTH Product Categories

Equipments

P2P Ethernet / P2P SDH APON EPON GPON WDMPON Active modules (duplex, triplex transceiver, etc) Passive devices (Splitter, Filter, etc.) backbone cable, access cable, drop cable, in-door cable All kinds of accessories for deployment, installation and maintenance

Components

Cable

Accessories

Agenda

Background of FTTH FTTH Status and Forecast FTTH Technology Basics FTTH in China

Huge Traffic Growth

Since 1990, the capacity of China PSTN has increased from 12M lines to more than 610M lines (July. 2004) ,The telephone penetration has increased from 1.1% to 45% New installed wireline was 36M in the first half of 2004, which is approx. 50% of total new installed wireline world wide New installed ADSL sub. was 7M in the first half of 2004, which is approx. 45% of total new installed ADSL sub. world wide

International B/W Trends


140000 120000 100000 80000 60000 40000 20000 0
2000 2001 2002 2003

Mb/s
126G IP/PSTN = 32

Internet

Leased line
2004.9

PSTN

China Domestic Backbone IP Traffic Growth


20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 18263

Tbyte/m
260 increase per year !

7193 2174 364 2000.5 2001.5 2002.5 2003.5

Current BB Access Situation

By June 2004, China has 87M Internet users


9.4% increase over year end of 2003 28% increase over mid 2003 6.7% of the population

31.1M broadband users


79% increase over year end of 2003 217% increase over mid 2003

By June 2005, the number of Chinas Internet users is 103M Bear Sterns forecasts 144M BB subs by 2007 ADSL is the dominating technology

SOHO and Residence Environ.

Cities and towns


density Small business Luxury district MDU Remote residence wealthy distance
B/w

high medium high low

high high medium low

close-far mediumfar closemedium far

high high medium -high low

8% 5% 72% 15%

Chinas FTTH Roadmap


Stage 1
Research and development
Phase1Testing Equipment maturity and availability

Stage 2
Testing and field trial
Phase3Small Scale Deployment Operation and maintenance Deployment and business model

Stage 3
Commercial deployment and operation

Phase2Field Trial

2003.11

2004.6

2004.12

2005.9

2006.6

2007

Current Situation (1/3)

FTTH is well accepted as a future-proof access solution

However, people hold different opinions as for when large scale FTTH deployment starts Governments FTTH program: eleventh 5 year plan Local government considering local regulations to promote FTTH No single killer application so far HDTV viewed as killer application but not widely used yet Gaming, IPTV, digital home, etc. together may make killer applications Many equipment vendors and cable/fiber providers EPON and point-to-point FTTH is commercially available Ethernet based WPON and GPON are under development Various out-door and in-door FTTH fiber and cable are available

Government considering FTTH a huge market


Applications

FTTH products are mature


Current Situation (2/3)

FTTH integrated with home network

ONT functionality extension into home gateway China Telecom formed an FTTH special leading group and deployed the first commercial FTTH in Wuhan China Netcom complete country-wide FTTH testing and a number of deployments China Mobile is considering FTTH for its wire-line access Founded in 2004 by Fiber-on-Line to promote FTTH research, development and deployment By China Communication Standard Association Also by local governments: Wuhan and Hangzhu High cost in comparison with ADSL which dominates todays access market Lack of applications

Carriers attitude are generally positive

FTTH forum

Standardization

Major issues

Current Situation (3/3)

Some deployments and certain deployment experience

Good equipment installation experience but few cabling and wiring experience More than 20 FTTH field trials and commercial deployments in Wuhan, Beijing, Chengdu, Hangzhu, Shanghai, Guangzhu, etc. The biggest has about 2000 subs More FTTH deployments planned Zisong residential district FTTH with 420 subs by Wuhan Telecom and operation starting in Jan 2005 IP telephone, POTS phone, Internet, CATV, FAX, IPTV 1:32 GEPON with triplex WDM An area of about 7 square km with population of 160,000 Including residential building and CBD All FTTH and FTTO for access

Countrywide FTTH field trials and commercial deployments

The first FTTH in commercial operation by major carriers

A big district in Wuhan plan to use FTTH/O


Major Players
Vendors

Service providers

Equipment

Fiberhome (EPON, GPON) UTStarcom (EPON) Greenwill (EPON) Fohope Networks (WPON) ZTE (EPON)

Telecos

China Telecom China Netcom China Mobile China Unicom

Fiber/Cable

Fiberhome Changfei Hengtong

Residential service providers

Tailong

Devices and Module


WTD Fiberxon Accelink

Technology Choices (1/2)

Service requirements

Multiple-play: voice, Internet access, CATV, IPTV, leased line Three types of subs: home, small-medium business, large corporation P2P and PON Enough CO space Subs are sparsely located and their distances to CO are quite different High scalability requirements in # of users and b/w Limited CO space Subs are closely located and their distances to CO similar Low scalability in # of users and b/w

Two major FTTH architectures

P2P is good for


PON good for


Technology Choices (2/2)

EPON will dominate FTTH market


For high-density home and small office POTS, Internet, CATV, IPTV, VOIP Easy to evolve to NGN For high-density medium size corporations POTS, Internet, IPTV, VOIP, small # of leased lines Make the best use of exiting network resource For big corporations and sparsely located medium size corporations Large number of leased lines (ATM, FR, TDM), voice and Internet For sparsely located home and small business which does not need lot of leased line services

GPON will be mainly used for FTTO


Point-point SDH

Point-point Ethernet

EPON or GPON?

Optical level
No big difference

Conclusion
EPON and GPON suitable for different environments

Cost
EPON is cheaper

Encapsulation efficiency
Commonly accepted: EPONs efficiency is less than 50 GPONs great than 90 It all depends on what service: Ethernet? TDM? In reality, almost all the IP services carried over Ethernet

Support for TDM


Both EPON and GPON support TDM GPON is more efficient for large number of E1/T1

Maturity
EPON is more mature

Fiberhomes Total Solution


SS7
Policy Server Media Server Application Server Billing Server IN

SS7

PSTN
NodeB SGW MSC-S/VLR RNC NodeB 3G Core Network Circuit Domain MGW HLR NodeB NodeB RNC Node B SGSN GGSN Fiberhome Force10 Core Router FHX 8000 Softswitch

FHX 5000 SGW Broadband AN3000 Series IAS Remote Narrowband d AN3000 Series rater g e t In eare B o rm IAS at CO f Plat FHX 3000 BP5000 EPON MGW BP5000 EPON ONT ODN OLT 1:64 R3000 Series Edge Router AN2000 Series DSLAM ADSL ADSL2+ VDSL2 S3000 Series Layer 3 Switch S2000 Series Layer 2 Switch FHX 1000 Series IAD
Edge access

PSTN

MAISP8000 Converge Router R4000 Series Convergence Router

3G Core Network Packet Domain

NodeB MSTP Citrans Series MSTP Products


Metro DWDM

MSTP Citrans Series MSTP Products


Metro DWDM

Edge Access

Broadband Wireless Access PDA BWA end user WLAN AP Mobile Data

Enterprise Customers

BWA at CO

IBAS 100 edge optical network products

ASON FonsWeaver 640 FONST W1600 Long Haul DWDM

IBAS 100 Edge Optical Network Products

Government Customers

Citrans 830 Series CWDM

Citrans 850 Series Metro DWDM

Citrans 850 series Metro DWDM

Citrans 830Series CWDM

Fiberhomes FTTH Solution


Started PON products development in 1995 Industry Leader in supporting Integrated services P2P Ethernet, EPON and GPON Single fiber with triple wavelength, true triple-play Smooth evolution to NGN/softswitching High GEPON interface density Complete accessories

Equipmentcarrier grade GEPON system with advanced OAMGE backplane (48G), 1:32 splitter, 1024 ONU on single chassis Componentsall active (transceiver and CATV module) and passive (splitter, wavelength multiplexers) components for GEPON Cableall kinds of cables for FTTH and installation solutions Accessoriesall kinds of accessories for FTTH

Current Focus: FTTH and FTTO


KM

CATV, DTV

Evolution to Soft-switching
MGC FHX8000 Metro Network H323 ANM2000

H.248 GE

H323Gatekeeper FHX3000

. . .

Integrated MG

V.5/PRI PSTN

To interwork with PSTN through open V5 and/or PRI and make the best use of existing networks Control module supports H.323 and H.248, flexible for both H.323 VOIP network and future softswitch network

Integrated Access capability

FTTH to Home Network


Single fiber to house, true triple-play Communication, entertainment and monitoring together Smooth evolutionONUhome gateway High density ADSL2+/VDSL/FTTP equipment
e-Fim ANM2000

BP5005

Data100M/family VoicePOTS and VOIP VideoCATV and IPTV Leased lineTDM and VLAN With WLAN integrated

PSTN
ODN V5

CATV
GE

Metro IP

ODN

FTTH Cables

Backbone Cable Access Cable Drop Cable Indoor Cable

Deployment Model

By telecos and CATV providers


Same as that for the existing BB access networks Invest once and profit in a long term

By telecos, CATV providers and house builders


House builders responsible for deployment, deployment cost counts into into house price Telecos and CATV responsible for operation and maintenance Multiple parties share the profit

By residential service providers (RSP)


RSP responsible for network operation and maintenance Telecos responsible for providing exit port and b/w Services provided by multiple-parties

Operation Model

By telecos and CATV providers


Enough operation experience No interworking and inter-billing problem Hard for triple-play

By residential service providers


Easy for integrated planning and deployment of the overall information platform Evolution to NGN Encourage competition Network resource sharing Tailong model in Chengdu is the first attempt

Zisong FTTH in Wuhan


The first FTTH network in commercial operation by service providers FTTH deployment for existing dwelling building with 420 subs The total FTTH solution from Fiberhome, including 1:32 triplex GEPON equipment,

splitter, all the kinds of cable and all accessories

Cabinet

CO

PC

Phone

Zisong FTTH Deployment Field

Cabinet with splitter inside

Insider of the Cabinet

Leading cable

Cabinet in the building

End unit (ONU)

Insider of the ONU

Beijing CNC FTTH Project


4 large scale technology discussion and 5 vendors selected for testing 5 vendors EPON equipment testing First commercial deployment Lab FTTH network demonstration

The five vendors are Fiberhome, Utstarcom, ZTE, Huawei, and Gaohong

FTTH Cost

CAPEX

Operation Maintenance

Upgrade

Equipment 60%

Construction 21% Engineering design 4% Fiber 3% DN Components 12%

Equipment Price Trend


EPON equipment price for triple-play per line
9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2004 2005 2006 2007 2008

EPON Equipment Price (/sub)


< 5000 line
2005 2006 2008 2005

Services

>100000 line
2006 2008

Internet only Internet + voice Triple play

1590

1350

900

1200

1000

600

1950

1500

1000

1430

1100

750

4400

3080

1800

3000

2100

1400

FTTH CAPEX (/sub)


< 5000 line

Services
E Internet Only Internet + voice Triple-play 1590 1950 4400

2005
C 1500 1700 2000 Total 3090 3650 6400 E 1350 1500 3080

2006
C 1100 1300 1500 > 100,000 line Total 2450 2800 4580 E 900 1000 1800

2008
C 700 800 900 Total 1600 1800 2700

Services
E Internet only Internet + voice Triple-play 1200 1430 3000

2005
C 1000 1250 1500 Total 2200 2680 4500 E 1000 1100 2100

2006
C 700 900 1100 Total 1700 2000 3200 E 600 750 1400

2008
C 400 500 700 Total 1000 1250 2100

FTTO Case Study


Item /Penetration
1 2 3 4 5 6 7 8 9 10 11 # of FTTO subs5100 in total OLT800/line4000 line ONU1000/each FTTP Cable800/each CAPEX in Total Monthly fee (198/sub Installation fee1800/sub Revenue in total Operation fee4% of CAPEX Sale and other fee20 of revenue Real revenue Year 1 35 1,785 3,200 1,785 4,080 9,065 4,241.2 3,213 7,454.2 362.6 1,490.8 5,600.8 Year 2 50 2,550 765 9,830 6,058.8 1,377 14,890 393.2 2,978 11,518 Year 3 60 3,060 510 10,340 7,270.6 918 23,078.6 423.6 4,615.7 18,039.3

(in 1K Chinese Yuan)

Challenges

No killer applications

Most applications low b/w : Email, web surfing, web gaming Telecos not allowed to run broadcast TV People not used to pay for TV ADSL equipment: 400-500/user FTTH equipment: 1600(Internet), 2000 (voice + Internet), 4000 (triple play) FTTH cable: 1500(Internet), 1700 (voice + Internet), 2000 (triple play) No large scale commercial FTTH deployments Few commercial FTTH in operation but little operation experience ADSL/2/2+, LAN, MMDS/LMDS, HFC, WLAN, WiMAX, BPL

FTTH still too expensive than existing technologies


No deployment and operation experience


Competing technologies meet current requirements

Profit model not clear Regulation discouraging for FTTH deployment


Residential service providers CATV rights

Opportunities

New applications emerging


Country-wide digital TV plan IPTV become very hot HDTV starts enter into market P2P and gaming exhaust bandwidth None of the existing technologies can provide 60Mb/w per family FTTH cost keeps dropping dramatically FTTH cost/bandwidth is much lower than other technologies For FTTO, cost is not the most important factor More than 20 FTTH deployments are on-going with the largest of 2000 subs A large residential FTTH in Wuhan with more than 16000 residents China Netcom considering FTTO for Beijing CBD 2008 Beijing Olympics prefers FTTDesk and FTTH Experience and encouragement from Japan and US FTTH deployment bundled with real estate Separation of TV network and TV program is under consideration The Telecommunication Law will further encourage competition

FTTH cost keeping dropping


Deployment planned

Encouraging regulations are under governments consideration


Summary

FTTH is accepted as a future-proof solution FTTH has seen rapid growth in some developed countries Both P2P and PON have their favorable deployment environments APON is widely deployed in US, but will be out EPON and GPON will dominate FTTH and FTTO respectively Chinas FTTH market is huge and is approaching massive FTTH deployment

Thank You