Analyst: AT&T may replace some FTTC with FTTP
By Ed Gubbins Dec 21, 2007 11:26 AM
AT&T may deploy fiber to the premises where it previously planned — and even now has — fiber to the curb, according to Simon Leopold, an analyst for Morgan Keegan.
The future of North America’s largest FTTC network has been in doubt since the company that deployed it, BellSouth, was acquired by AT&T, which favors fiber-to-the-node (FTTN), a similar but longer-reach technology.
“Channel checks indicate that AT&T has plans to deploy Ericsson [FTTP] gear in applications previously slated for Tellabs [FTTC gear] and may even rip and replace deployed Tellabs access platforms,” Leopold wrote today.
In an interview today, Leopold said AT&T may choose to deploy Ericsson’s gear in a configuration very similar to FTTC but based on IP rather than ATM. One of his sources had described to him a scenario in which AT&T would deploy fiber to Ericsson equipment located within a few hundred feet of each home and run VDSL2 the rest of the way, which essentially describes FTTC. “The difference is, that 500 feet is IP-based VDSL2, so it fits better into the U-Verse architecture, in that you’re getting rid of all the ATM,” he said.
“I think there have been some limitations in the capacity [of FTTC] that would not be suitable for video in the retrofit,” he added. “So if video is your driver-and remember, BellSouth, prior to the acquisition, wasn’t yet committed to IPTV. Now with AT&T running the show and IPTV being the driver, they need more capacity.”
AT&T named Alcatel-Lucent and Ericsson as its FTTP access equipment suppliers this summer, with plans to deploy their gigabit passive optical networking (GPON) gear in greenfield applications starting next year. That move is a continuation of AT&T’s existing practice of deploying PON to greenfields only.
By Leopold’s estimate, the BellSouth FTTC deployment recently brought $35 million to $45 million in quarterly revenue to Tellabs. But he predicts the business will amount to just $98 million next year, almost a third less than he previously had expected. Next year’s fourth quarter might bring Tellabs just $20 million in FTTC sales, he said.
As AT&T absorbed BellSouth, Tellabs continued to wax optimistic about its position with the new megacarrier. At an investor conference in February, Tim Wiggins, chief financial officer for Tellabs, said AT&T was “very interested” in its 1150 multiservice access system, the platform built upon the gear in BellSouth’s FTTC network. And in the second quarter, Tellabs even saw an uptick in FTTC sales to AT&T. But as the year progressed, AT&T increasingly indicated movement toward FTTN in the former BellSouth territory, which analysts had always considered the most likely scenario.
Redback Networks, another supplier to pre-merger BellSouth, has also lost revenue following AT&T’s acquisition. |
