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PONs, Nokia and the Future of Broadband Service Delivery

5G is being viewed as a technology that one day may possibly be to fiber-to-the-home (FTTH) what mobile phones were to wireline telephony. In this futuristic vision, broadband access would become all 5G wireless, with PONs relegated to the 5G infrastructure, albeit with an expanded role in backhaul.  But 5G wireless won’t be fully birthed until 2020 when the 5G standards (or at least some of them) are official.
 
Until then, PON equipment companies will find their success by making judgment calls about the most profitable mix of (fixed and mobile) wireless and fiber for today’s broadband loop.  This is not a one-size-fits all determination and will vary with market and geography.  While there are plenty of places where bringing PONs all the way to a building already make sense, there are probably more where an all PON solution for next-generation broadband services aren’t yet cost effective or even feasible from an engineering perspective.
 
For all these reasons, we think that Nokia is heading in the right direction with its Wireless PON (WPON) solution that it just announced to coincide with the Broadband World Forum in Berlin. WPON is a hybrid solution using Nokia’s PON technology for most of the distance in FTTx and then using so-called “WiGig” to complete the connection to the home or other building. 
 
WiGig is a 60 GHz technology standardized by the IEEE as 802.11ad. It falls into what might be called the Wi-Fi family of radio technologies, but while conventional Wi-Fi uses the crowded 2.4GHz and 5GHz frequency bands, WiGig uses the relatively unused 60GHz spectrum. This enables it to use wider channels than standard Wi-Fi, resulting in significantly faster data rates. WiGig also utilizes beamforming to bring connections of up to 1Gbps to Nokia WPON home units located up to 300 meters away on the outside of a building or home. It also has the ability to connect multiple access points in a row or create a meshed network.
 
Nokia lost out to other vendors in the Verizon NG-PON2 deal.  However, CIR believes that WPON may offer Nokia a more stable business opportunity in the short term than NG-PON2 can:
 
With WPON, Nokia is into a PON market with less uncertainties than those associated with NG-PON2.  NG-PON2’s success is, after all, predicated on the success of the full range of next-generation broadband services, some of which might be considered a bit of a stretch when it comes to significant short-term revenue generation.  Virtual reality services might serve as an example here.
 
By contrast the success of WPON depends on Nokia making the cost case for using WPON to bring broadband to rural areas, and to fill gaps in urban and suburban FTTx coverage.  This case will not be hard to make, given that (1) such markets definitely exist, (2) with Nokia's WPON, carriers can quickly connect up new subscribers, and then (3) start to generate revenues quickly by offering underserved subscribers with existing broadband services that they don’t already have and more in the future. 
 
Nokia is planning WPON pilots and general product availability planned for 2018 and we expect to see more products of this kind emerge, although they will never get the publicity that NG-PON2 or even XGS-PON gets.  Nonetheless, WPON and similar products may not need all that much PR and carriers seem likely to steer their way to an easy to install and manage interim broadband solution that also keeps deployment costs to a minimum.

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