Smart Grid

January 14, 2013

Ovum Forecasts Huge Opportunity for PON Vendors in Chinese Smart Grid Market

Passive Optical Networking (PON) technology unites inexpensive Ethernet equipment and fiber infrastructure, offering immense flexibility, dependability and ease of use. A PON includes an OLT (Optical Line Terminal), which enables communication between the PON and the backbone network.

PON technology is often used the deployment of smart grids, and this could present a huge opportunity to PON vendors in countries like China.

In fact, research firm Ovum estimates a market opportunity of $1.5 to $2 billion in China alone when it comes to the deployment of smart grids using PON technology.

If the PON technology is largely used in the deployment of smart grids, OLT equipment vendors will stand to gain the most. The report urges these vendors to pursue the State Grid Corporation of China (SGCC) to make use of PON technology in the deployment of smart grids.

Smart grid deployment has been growing at an impressive rate in China since the country embarked "Strong and Smart Grid" 11-year plan in 2009. The plan looks to deploy smart grids all over the country.

Julie Kunstler, Principal Analyst of Components at Ovum (News - Alert), said, “We believe that the ultimate goal of a fiber-based smart grid is to support advanced communications services. Building a fiber-based smart grid communications network creates a very large market opportunity for PON vendors. This potential market is important, as Ovum forecasts declining PON OLT port shipments beginning in 2013, following major FTTx network buildouts in China.”

In March 2012, the company released another report which predicted revenue for IP softswitches to reach $20.5 billion in 2017, mainly because IP traffic is growing at an unprecedented rate, fueling the demand for IP softswitch and routers by service provider networks.

This growth rate is expected to increase further with a rise in the demand for mobile broadband and fixed subscriber base, the company reported. 

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Edited by Braden Becker