FTTH Market Report For MDU

Fiber to the Home
Fiber To The Home Market for MDU Report

Presented to
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180 Broad Street, Suite 1334, Stamford, CT 06901
Tel: 203-715-0080, 203-653-7235, Email: sales@smartshore.us
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Table of Contents
Table of Contents......................................................................................................................................................2
FTTH Major Players..................................................................................................................................................2
Uncompleted Broadband plans.................................................................................................................................3
Major Broadband Deployments: Performance against announced completion date.................................................4
Internet Penetration of US households......................................................................................................................5
FTTH Infrastructure suppliers....................................................................................................................................5
FTTH homes passed, marketed and connected as on Sep09...................................................................................7
MDU Broadband Revenue.......................................................................................................................................11
Who are the top 5 companies that will be building out optical fiber networks in MDU environments?.....................11
................................................................................................................................................................................14
Radio Frequency interference in MDUs...................................................................................................................14
Recommendations: Whom should custom cable target?.........................................................................................16
Appendix:.................................................................................................................................................................17
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Bibliography:............................................................................................................................................................27
MDUs become hottest FTTH market.......................................................................................................................27
Competitors Battle over MDUs................................................................................................................................29
Cincinnati Bell Selects Motorola's FTTH and Video Delivery Solutions to Provide Advanced Television and
Broadband Experiences to Consumers...................................................................................................................30
FTTH Major Players

Currently, two major service providers are rolling out FTTH fiber optic access plans: AT&T, with U-verse, Verizon,
with FiOS, while Comcast is rolling out a competing technology called Docsis 3.0. Consumers are increasingly
streaming and downloading large files, like movies, and engaging in video-chatting, using the small cameras that are
attached to many new laptops

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Both AT&T and Verizon offer "high-speed" connections of speeds up to 10 Mbps - but with the demand that services
like video-chatting and streaming video put on networks, the 50 MBPS offered by Docsis 3.0 and FiOS look far more
appealing.
As a comparison, DSL has a speed of 1.5 Mbps. The telecom giants jumping on the FTTH bandwagon signals that
fiber optics is set to go mainstream, and demand for fiber optics infrastructure will grow. It's likely that larger telecom
infrastructure companies like Alcatel and Tellabs will receive most of the fiber optics business, but smaller firms like
Emcore could also get in the game.
Major Players
AT&T: U-Verse maxes out at 18 Mbps, but is cheaper than Comcast and FiOS (excluding New York) at only
$100/month. U-Verse uses both FTTH and FTTN technology, depending on the area. The FTTN model is faster
and cheaper to deploy then FTTH, but the copper connections to the homes sacrifices speed compared to FTTH. U-
Verse is currently in parts of California, Connecticut, Georgia, Indiana, Illinois, Missouri, Michigan, Ohio,
Oklahoma, Texas, and Wisconsin. AT&T plans to service 1 million homes by 2008 and 30 million homes by 2010.
Verizon: Verizon FiOS is the largest fiber optic network in the US. FiOS offers a downstream speed of 50 Mbps
and costs $90/month in New York, but $140/month in Massachusetts, Rhode Island, Connecticut, New Jersey, and
Florida. To give an idea of how fast 50 mbps really is, at 50 mbps an HD movie can be downloaded in 13 minutes
and a 60 minute video can be downloaded in a mere 8 seconds. In the 16 states that Verizon plans to introduce its
FiOS system, the company reported that it expects to spend close to $23 billion from 2004 to 2010 in network
installation. Verizon is dominating FTTH, as it is responsible for over 70% of the FTTH connections in the US. By
the end of 2007, FiOS had 9.3 million customers and 12 million customers by the end of 2008 and Verizon targets
to have 15Million customers by the end of this year in 2009.
Uncompleted Broadband plans

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• In addition, 500 other Independent providers (Attached in appendix)

Major Broadband Deployments: Performance against announced completion
date

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Internet Penetration of US households
Source: Columbia institute for Tele information Broadband in America report issued 11-11-2009.
FTTH Infrastructure suppliers

Alcatel (ALU) and Tellabs (TLAB) it is likely these two will get the bulk of the fiber business. However, the
following are some smaller companies with infrastructure offerings as well:
EMCORE (EMKR) has a wide offering of fiber optics products and could possibly become a notable player as
fiber optics continues to grow.
AFL Telecommunications provides fiber optic products and services to the telecommunications industry. They are
completely tied to the success of fiber optics in this industry. AFL is part of Fujikura (TYO: 5803).

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Tyco Electronics primarily produces undersea fiber optic networks (about 7% of revenue in Q2 2008), but they
also provide fiber optic infrastructure that is used in FTTH.
Preformed Line Products provides fiber optic infrastructure products such as fiber optic closures and cable
connectors, as well as many others.
ANADIGICS makes FTTH amplifiers. The amplifiers deliver performance for digital and analog TV applications
by providing the video transition from the optical network terminal.
Corning makes optical fibers for the cables. Corning made an important development when they created a
bendable fiber in 2007, which is specifically vital for the fiber optics used in New York due the tight requirements
of many of its older buildings.
ADC Telecommunications provides fiber optic infrastructure products and services.
Source: Wikinvest

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FTTH homes passed, marketed and connected as on Sep09
FTTH Home passed FTTH Homes FTTH Homes Video Customers

Marketed Connected
Apr -06 -57% 252% 23% 1018%
Sep -06 333% 27% 176% -2%
Mar- 07 -5% -16% 38% 37%
Sep- 07 -19% -13% 42% 118%
Mar- 08 43% 54% 16% 33%
Sep - 08 -7% 10% 10% -6%
Mar- 09 -35% -34% -22% -17%
Sep- 09 51% 66% 37% NA

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Analysis
Total FTTH Home passed as on Sep09 = 17.2M

FTTH Home connected as on Sep09 = 5.4M
Based on the article below we assume apartment buildings (MDU) represents 25% of the total FTTH home
passed and We add 20% more because MDU buildings also includes Hotels, Universities, and Hospital etc.
Now total MDU buildings passed is 45% of the total FTTH homes.
17.2M*45% = 7.74M MDU Buildings Passed
7.74*32% = 2.5M MDU buildings Connected.
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MDU Broadband Revenue
“There will be 10 million MDU households in the United States by 2009. Triple Play penetration in FTTP is up to
30%. MDU market penetration will be up to 3 million subscribers!”
- In-Stat 2006
Who are the top 5 companies that will be building out optical fiber networks
in MDU environments?
Top Companies who offers FTTH Network to MDU

1. Calix
2. Corning
3. ADC
4. Connexian
5. OFS
6. AFL Telecommunications
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12

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Radio Frequency interference in MDUs

14

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The use of radio frequencies for wireless Internet access and data transmission in multiple dwelling-unit (MDU)
structures has become critically important. MDU residents insist on reliable, fast and portable (that is, wireless)
connectivity for their laptops, netbooks, gaming devices and smartphones – and even, in a trend that will surely
grow, to supplement their cell-phone signals.
These devices have become essential to tenants of all generations. A prospective tenant who cannot connect
wirelessly within an apartment or get a strong cell-phone signal may well decide not to rent or buy the unit
Devices that connect using the IEEE 802.11 (Wi-Fi) frequency band are becoming more and more common.
According to the trade group Wi-Fi Alliance and the consulting firm In Stat, 387 million Wi-Fi–enabled devices
were shipped in 2008, up nearly 360 percent from 2006, and nearly 1 billion Wi-Fi–enabled devices are forecast to
be shipped in 2012. In-Stat also reports that more than 1,000 new Wi-Fi– enabled products were launched in 2008
and even more are expected for 2009.
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Recommendations: Whom should custom cable target?

• My recommendation is for both Telecom giants, because both giants are looking forward to spend huge
amount in the deployment of fiber network to residential apartments, hotels, offices, restaurants, hospitals,
and universities.
• One is spending huge money to expand its FTTH network & other one is planning to serve 30MM homes
by the end of 2010.
• Currently, Verizon is leading with 70% market penetration in FTTH customers in US and as per market
analysts Verizon will remain the leading company in FTTH network for another couple of years.
• Why both, because both companies are planning to expand in Custom cable footprints, Verizon has a big
network in Florida however they are planning to expand in GA, AT&T has a big network in GA and they
are planning to expand in FL.
• First preference would be Verizon because Currently Verizon offering its Fiber services in 16 states and
plan is to establish its network throughout US.
o Verizon offers FTTH where as AT&T bringing its U-verse services to MDUs; though most of U-
verse is based on fiber to the node.
o Verizon has more fiber subscriber than AT&T
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Appendix:
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Bibliography:
MDUs become hottest FTTH market
30/09/2009
While the fiber-to-the-home (FTTH) industry has largely focused on the scramble for broadband stimulus funding
this year, 2009 has quietly become the year FTTH went MDU-crazy.
Multi-dwelling units have become a major segment of the FTTH buildout, and as with most local loop fiber trends
in North America, Verizon has been the driving force behind the shift. With its push into major metro markets such
as New York, Philadelphia and Pittsburgh, Verizon has been pushing its vendors to develop solutions that better
match MDU requirements. The result has been smaller optical network terminals and more flexible ONT solutions,
a proliferation of pre-connectorized fiber drops and the development of better in-building fiber distribution using
more bendable fiber.
To be sure, Verizon was already driving its vendors to make smaller indoor ONTs and pre-connectorized fiber
drops for easier installations, but the MDU push is accelerating those trends.
“To meet our goal of passing 3 million new homes each year, we had to find ways to improve the speed and cost of
our fiber deployment and installation,” Verizon CTO Richard Lynch told the FTTH Conference & Expo Tuesday in
his keynote address. “Deploying terminals for fiber drops was time-consuming, so we worked with our supplier
partners to create a connectorized version for quick ‘plug and play’ installation. We recognized that it often took
more time than expected to install outdoor ONTs. So we worked with the supplier community again and created the
‘just-inside’ model.”
Verizon then pushed suppliers for solutions customized for MDUs, Lynch said.
“Limited wall space in MDU basements made initial designs of the common ONTs difficult to use, so our suppliers
created stackable ‘pizza box’ ONTs that required much less space,” he said. “Inside the living area, single-customer
ONTs were too large and unattractive, so together we developed Desktop ONTs the size of a home router that made
the installation process cleaner and simpler for the customer. We needed more flexibility for MDU interior
installations, so fiber manufacturers refined bendable fiber to handle the tight turns found in urban buildings – with
no degradation or signal loss.”
Verizon is making a major MDU push for one obvious reason – apartment buildings represent 25% of its customer
base and an even higher percentage of metro area customers – and one less obvious reason, said Kevin Smith,
director of engineering process assurance.
“You always have a greater opportunity in the MDU space because of the much higher residential churn,” Smith
said in a Tuesday panel session on MDUs at the FTTH Council event. “The average churn in the single family unit
space is seven to eight years. So if you can’t get that customer or they’ve disconnected their service, you don’t have
another opportunity for a while.”
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ADC is one of several vendors focusing on MDUs because of the increased opportunity, said Trevor Smith,
director of carrier solutions. “Our customers have asked for help in understanding how to address that
environment,” said Smith, who moderated the MDU panel at the FTTH Council event. “They are looking for
increased efficiency and less need for planning and engineering.”
ADC’s Rapid Fiber system was designed specifically for MDUs and incorporates connectorization of fibers in the
in-building distribution system.
“Connectorization allows you to work in the field with less skilled labor and less overhead,” Smith said. “Plus you
don’t have to carry as much equipment as if you are doing field splicing.”
Verizon’ Kevin Smith said the company’s early MDU experience showed fusion splicing in the field was “cost-
prohibitive.”
“They need power, and the amount of training required is higher,” Smith said. “What we have just started looking
at is mechanical connectors so that our installers can go in with a compact kit. They are very quick, and they don’t
need power.”
Because most MDUs are in more densely populated areas, they tend to be close enough to the central office that the
DB loss associated with connectorization isn’t an issue because the optical budget is sufficient, Smith said.
Working with several vendors, Verizon created VATS – the Verizon Advanced Terminal System, Smith said.
VATS is a preconfigured cabinet with preconnectorized cable that allows technicians to do “plug-and-play”
installation of tenants as they sign up for service.
Source: http://www.phonecardstock.com/content/289881
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Competitors Battle over MDUs

October 8, 2009
Competitive pressures and advancing technologies are converging on the multiple dwelling unit (MDU) market.
Competition continues in the wake of sustained telco video initiatives and the upholding by a Federal Court of
Appeals in May of a ban on cable operators arranging exclusive service contracts with owners of MDUs.
The technology drivers include passive optical networking (PON) equipment, bendable fibers, and niche video,
high-speed data and telephony equipment designed for applications that—while niche—generate up to tens of
millions of dollars in bulk account revenue for some larger MSOs.
Driving this business are expectations from consumers that services in all MDUs resemble those found in single-
family residences.
“Services like HD and high-speed Internet are must-haves for MDUs. They must be at parity with their
competition. Maybe not the best out there, but not an inferior service. It’s a parity issue,” said Bruce Leichtman,
principal for the research group, LRG.
It’s an issue that has become top of mind for both MSOs and its competitors, such as Verizon’s FiOS and AT&T’s
U-verse, as they jockey for position in this market.
The market is worth fighting for, with nearly half of all U.S. apartment residents saying the availability of
broadband influences their rental or buying decisions, according to the National Multi-Housing Council.
Hotel chains also figure in the mix.

“We’re seeing new flat screens with bad analog feeds, and guests are bringing their own content and devices with
lots of Internet streaming.... It’s a big issue,” said Doug Rice, EVP and CEO for the Hotel Technology Next
Generation group (HTNG).
MDUs are the larger market. “About one fourth of the U.S. households are in MDUs,” said Michael Weston,
director of marketing for Verizon Enhanced Communities, said. “It’s a long-term investment. But now we can do
fiber to the desktop and minimize the distance...using smaller (ONTs).”
In July, Verizon began extending its FTTP offering into more MDUs by deploying router-sized GPON ONTs from
Motorola and Alcatel-Lucent.
“It means we can go deeper into MDUs with tighter, bendable fiber,” Weston said. “Within 18 months, the ONT
will be the size of a deck of cards, (further) reducing the space requirements.”
Space constraints and need for scaling requirements leads service providers to distinctive technical solutions.
Bendable fiber is one. Introduced in mid-2008, Corning’s ClearCurve was pitched as a fit for the MDU market,
where a typical installation could require a dozen 90-degree bends.
Bend-insensitive fiber has been around longer than that, however. Draka Communications, which collaborated
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with 3M on its One Pass Fiber Pathway product introduced at the FTTH Conference in Houston last month,
introduced its BendBright fiber in 2002. (For more on 3M’s One Pass, click here. For more on discussion at the
FTTH event on how to fiber MDUs, click here. For additional discussion of bend-insensitive fiber, scroll to
bottom of this article on PON technologies.)
What is new is the drive to bring fiber not only to an MDU, but also through the hallway and into individual units.
But fiber is not the only technology playing in this space.
ATX Networks is one vendor with a host of specialty products addressing MDU applications (including
hospitality) ranging from analog and digital video deletion and insertion to digital voice switches for intercoms to
amplifiers and nodes to connectivity, filters and power converters.
Another vendor with a reputation for custom engineering, Vecima Networks developed its Terrace MDU gateway
as a multi-channel QAM to RF converter that acts like one very large digital-to-analog (DTA) terminal device.
Reportedly, Comcast has signed an agreement to deploy Terrace.
Software helps reduce the operational costs of Terrace, a compact and complicated device.
“There’s lots of parallel processing, de-modulating, de-crypting, all in a box 20 inches x 30 inches. It’s essentially
a headend in a bread box, with fixed capital costs and future-proof because it’s re-configurable with software that
requires only a network software adjustment,” said Richard Blenkinsop, VP of marketing and business
development for Vecima.
For more details, see the whole article
Source: http://www.cablefax.com/video/Competitors-Battle-over-MDUs_37934.html
Cincinnati Bell Selects Motorola's FTTH and Video Delivery Solutions to

Provide Advanced Television and Broadband Experiences to Consumers
PR Newswire
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Sep 29, 2009
HORSHAM, Pa., Sept. 29 /PRNewswire-FirstCall/ -- Motorola Inc. (NYSE: MOT) Home and Networks Mobility
business today announced that Cincinnati Bell Inc. (NYSE: CBB) has selected Motorola's gigabit passive optical
network (GPON), edge modulation, encryptor and encoding solutions for deployment in its fiber network.
Cincinnati Bell's fiber network will enable the delivery of rich personalized media experiences and support multiple
high-speed broadband service tiers and advanced video services including the highest quality high-definition TV
(HDTV), video-on-demand (VOD) and standard definition television programming available to consumers today.
Cincinnati Bell serves subscribers across southern Ohio and northern Kentucky in single-family and multi-dwelling
unit (MDU) environments. Already using Motorola set-tops, the service provider will expand its broadband and
video services with the new high-capacity network based on Motorola GPON equipment and extend flexibility with
the best-in-class video headend solutions. Cincinnati Bell joins a growing list of worldwide customers, large and
small, deploying Motorola's GPON and RF video solutions.
"In selecting a next generation video network solution, we looked for a partner with extensive fiber experience
including the proven ability to serve the MDU market," said Darrick Zucco, general manager, Fioptic Services of
Cincinnati Bell. "With Motorola's extensive deployed base of GPON equipment in North America and their
integrated 1GHz RF video solution, we are confident that as we begin employing fiber into parts of our network,
our subscribers will receive the highest quality television and broadband services for many years to come."
"Cincinnati Bell's use of fiber in its network reflects a growing trend among operators to support bandwidth-
intensive services that both generate new revenue and meet increasing consumer demand," said Joe Cozzolino,
senior vice president and general manager, Access Networks Solutions, Motorola Home and Networks Mobility.
"We are excited to work with Cincinnati Bell on this GPON deployment bringing the most competitive, triple-play
broadband services to subscribers in the region."
Cincinnati Bell's fiber network will run on the proven Motorola AXS2200 optical line terminal (OLT) and the 1
GHz capable Motorola ONT1400 single-family optical network terminal (ONT) and Motorola ONT6000 designed
to serve multiple-dwelling units. These Motorola solutions inherently support SCTE-55-1, or Motorola RF return
path functionality, for easy integration with Motorola RF set-tops and headend equipment.
Motorola will have demonstrations of its leading FTTP solutions during the FTTH Conference and Expo September
27-October 1, 2009 at the George R. Brown Convention Center in Houston Texas.
Source: http://www.multichannel.com/article/355758-Cincinnati_Bell_To_Expand_Fiber_To_The_Home_Network.php
http://www.wikinvest.com/concept/Fiber-to-the Home_%28FTTH%29/News/410416/Cincinnati_Bell_Selects_Motorola
%27s_FTTH_and_Video_Delivery_Solutions_to_Provide_Advanced_Television_and_Broadband_Experiences_to_Consu
mers
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Fiber To The Home Market for MDU Report

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FTTH Major Players

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Uncompleted Broadband plans

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• In addition, 500 other Independent providers (Attached in appendix)

SmartShore Services Inc.

Internet Penetration of US households

FTTH Infrastructure suppliers

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ADC Telecommunications provides fiber optic infrastructure products and services.

SmartShore Services Inc.

FTTH homes passed, marketed and connected as on Sep09

FTTH Home passed FTTH Homes FTTH Homes Video Customers

SmartShore Services Inc.

SmartShore Services Inc.

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Total FTTH Home passed as on Sep09 = 17.2M

17.2M*45% = 7.74M MDU Buildings Passed

7.74*32% = 2.5M MDU buildings Connected.

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Top Companies who offers FTTH Network to MDU

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Radio Frequency interference in MDUs

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Recommendations: Whom should custom cable target?

SmartShore Services Inc.

SmartShore Services Inc.

SmartShore Services Inc.

SmartShore Services Inc.

SmartShore Services Inc.

SmartShore Services Inc.

SmartShore Services Inc.

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Competitors Battle over MDUs

Hotel chains also figure in the mix.

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For more details, see the whole article

Cincinnati Bell Selects Motorola's FTTH and Video Delivery Solutions to

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SmartShore Services Inc.

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