Own analytical articles of "SV-consulting", LLC.

Low demand prevents the widespread adoption of GPON in Ukraine ?

The nuber of Internet users increasing very fast. Thus, according to internetworldstats.com, on December 31, 2011 there were more than 2 billion 200 million Internet users worldwide (Table 1).

Thanks to the introduction of the new technologies speed of access to the Internet has increased significantly. But the gap, both in quantitative and qualitative terms, between countries and regions of the world is pretty big. For example, if in South Korea (the world leader in deveoping of the Internet) the average speed of the Internet is about 17.5 Mbps, in the U.S. it is 5.8 Mbps, and in the world it is about 2.3 Mbps (December, 2011).

But why do they need such high-speed networks? The answer is obvious: more and more people are involved in remote work and in spare time they watch HDTV channels, on multiple TVs within one house at the same time. Today users do not want just download some files, they want to download these files very quickly. Online games also require high speed and instantaneous response.

Social networks bocome more and more popular, on-line collaboration and communication via the Internet has created the need to build more powerfull networks. And here can help GPON (Gigabit Passive Optical Network) technology.

Аctually, GPON is "point-to-multipoint" architecture. Its main feature is using of passive splitters in the optical network, which allowing a single fiber, connected to the central office of ISP, to serve a large number of consumers (homes or small businesses).
This technology started developing in the 90's of the last century. Twenty years ago the leading Europe's operators and among them France Telecom and British Telecom, formed a consortium to develop a technology for multiple access over a single fiber.

GPON has been developed with support of FSAN (Full Network Access Service) and ITU (International Telecommunication Union). IEEE (Institute of Electrical and Electronics Engineers) also developed a standard PON (Passive Optical Network), called Ethernet PON or EPON. EPON standard was introduced earlier than GPON, and has been successfully deployed. However, download/upload speed of EPON is 1 Gbps, and has a lower bandwidth than GPON. These factors make EPON less attractive choice of technology for providers FTTH.
Download speed, which GPON (International Telecommunication Union standard G.984) provides for subscribers is 2.488 Gbps (wavelength of 1550 nm) and download speed is 1.244 Gbps (at 1310 nm), which is divided between users. These figures almost one hundred times greater than the speed, provided by ADSL technology.

In principle, during the planning of FTTH networks, service providers can choose one of three general architectures of FTTH: point-to-point, active Ethernet and passive optical networks (PON), such as GPON.
"Point-to-point" is an Ethernet FTTH architecture similar to the structure of the twisted pair, that is separate special fibers connect each house with service provider. Architecture "point-to-point" has its advantages for the deployment of small-scale networks, but not suitable for large scale deployment.
Architecture "active Ethernet» based on the same deployment model as FTTN, so this solution is possible as an addition or a way for migration to FTTH technology for large-scale deployments where dominate high-speed digital Subscriber Line (VDSL).

GPON's architecture is an optical solution. GPON consists of an optical line terminal (OLT), which combines several of optical network terminals (ONT), using a passive optical distribution network (ODN). GPON eliminates the need for active electronic devices using passive optical splitters (OSP). As a passive device, GPON-splitter does not require refrigeration and electricity, and therefore it works stable and almost never breaks.
However, together with other advantages GPON, such as cost of fiber cable, this technology has some disadvantages, among which are the next.

Due to the fact that consumers use common bandwidth which is divided among all users, with a large number of subscribers such networks will not be able to provide the maximum speed.
GPON networks have a common medium and therefore it is necessary that the terminal devices operate on a common data rate (2.488 Gbps), which leads to increasing cost of equipment.
Because of using a common transmission medium, all data should be encrypted, which leads to reduction of the useful data rate.

Since the signal in GPON networks divided among all users, it leads to loss of its power and therefore the signal's power should be more than 100 times greater than in FTTH networks.
But despite of these and other disadvantages, GPON received adoption worldwide.
in late 2011, Alcatel-Lucent and Сhina Unicom announced construction of one of the largest fiber networks in the world, using GPON technology. The network will be built in 29 provinces in China and, as expected, will satisfy the growing demand for such applications as "video on demand", interactive TV, on-line games, social networking and others.

GPON technology also is started using in Ukraine. In December 2011 MTS-Ukraine announced of providing broadband access to the Internet based on GPON and Ethernet. Firstly, service will be available only to residents of Osokorki and Poznyaki districts in Kiev.

Also, as said Igor Kravets, Ukrtelecom acting CEO at the beginning of July 2012, the company is considering building GPON network. Igor Kravets said proit.com.ua that «We are very actively considering now GPON/FTTH project. I think that more likely we'll choose GPON. We are studying the experience of other countries, including Russia. GPON is less expensive and more efficient." "We can launch FTTB, but how "to load" the fiber? Internet and TV? That's not enough. Ideally, when optics is provided for each apartment, we can offer a number of services, for example, "smart home." But now the Internet is "empty" and there is nothing to fill it in"- said Kravetz. He addde that as part of a project, Ukrtelecom have negotiations with online movie theaters to provide television services, VOD. "We've prepared already service package, but we are not issued a license," - said Igor Kravets.

As we can see from the statement of Mr. Kravets, the main problem for widespread introduction GPON in Ukraine is not technological one, but the low demand, and how to increase this demand is a topic for another article.
Anyway, it is obvious that sooner or later GPON will be used widely in our country, and millions of Internet users, as well as the whole economy of Ukraine will benefit from this.

Valerii Astashov, Ukrkomline, CEO:

"It is obvious that in the near future, technologies which does not require the active equipment on the way to the subscriber (Ethernet switches, optical switches, etc.) will dominate the market for broadband Internet access. The presence of active equipment requires additional operating costs, particularly in the absence of a clear legal field for Internet service providers in Ukraine.

If not to take into account the evolution of ADSL standards, but to consider only optic fibers, GPON and FTTH technologies will be in demand. GPON, in my opinion, is the most attractive. All of its current disadvantages are quickly becoming uncritical. Prices for GPON equipment are decreasing every year. Its development in Ukraine is constrained not because of technoloical reasons. The main obstacle to widespread use of the new technologies (including GPON) are low prices for services, which have emerged as a result of competitive wars between ISPs. Income of providers do not allow them to pay back the investment in a reasonable time".

Oleg Stefanyuk, SV-consulting, President:

"No doubt that GPON is an excellent perspective. And the question what will be loaded into fibers is not an issue at all for me. If just to look at the development of networks for transferring voice, video and data over the past 10 years, it is clear that sooner or later every network was overloaded. People's needs always exceed the technical capabilities. However, if to talk about conditions of the Ukrainian market in September 2012 and taking into account specific situation, it seems that DSL is almost an ideal option. The economic situation doesn't stimulate both operators and consumers to spend money.

If to look back for 4-5 years, it seemd that Ukrainian market would be growing forever and everything would be like in a fairy tale - 3G (finally), WiMax, LTE and FTTB. And we will have at each apartment at least 100 Mbps, and we will watch HDTV on our PCs. But now I carefully study the U.S. market, where average speed is not so high. Everybody in the US takes into account, first of all, a cost of any project. And If some innovative programs are supported by the state, it is a strategy for the future development of the country and the economy."

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