Calix Expands Active Ethernet and Extended Reach GPON Proposition… Again

| June 24, 2009 | Broadband Infrastructure | Competitive Update

| Analyst: Erik Keith

Current Perspective: Slightly Positive
Vendor Importance: High
Market Impact: Moderate/High

Event Summary

June 24, 2009 – Calix announced the availability of the Calix E5-312, a residential active Ethernet (AE) platform. The company also announced the availability of an enhancement to its extended reach GPON on the Calix C7 Multiservice Access Platform (MSAP), which now enables operators to reach subscribers located up to 40 km from any Calix C7 FTTP serving location. The Calix E5-312 platform and 40-km extended reach GPON solution on the Calix C7 are in use in customer networks and available now.

Analytical Summary

• Current Perspective: Slightly positive on Calix’s introduction of the E5-312 active Ethernet and enhanced extended reach GPON solutions, as these new system elements provide operators with additional fiber access options as they look to expand their fiber-fed serving areas and customer bases. The E5-312 is designed for residential active Ethernet services while the new extended reach GPON solution enables operators to deliver GPON services up to 40 km (~25 miles) from the OLT, expanding the serving area reach by another 21%.

• Vendor Importance: High to Calix, because the vendor needed to maximize its opportunities for customer acquisition and revenue growth (especially in the context of the current macroeconomic downturn) by offering high-value/strong ROI fiber access-enabling solutions. While GPON/extended reach GPON is still the most favored fiber access technology for North American operators, an increasing number of service providers are also interested in deploying active Ethernet systems to address both business and residential customers.

• Market Impact: Moderate to high on the North American fixed access market, as Calix’s customer base includes 14 of the top 20 U.S. telcos and 70% of the top 50 ILECs in the U.S., and Calix now counts more than 375 FTTP customers (including 60 cable operators). With the new E5-312 and 40-km extended reach GPON solutions, Calix now offers an even broader array of fiber access service-enabling technologies, addressing operator demand for both active and passive optical access systems.

CLIENTS ONLY

Competitive Positives and Concerns

Recommended Vendor Actions

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Recommended Competitor Actions

• Rival fiber access vendors targeting the North American market (as Calix is overwhelmingly North American/ANSI-market-focused) need to point out that Calix’s new active Ethernet and extended reach GPON solutions do not provide the company with any dramatic competitive separation, as most vendors in this highly-competitive sector either: (1) already offer comparable solutions or (2) in the case of ER GPON, can incorporate the same ER GPON functionality leveraging similar pluggable optics (OIMs) and corresponding software upgrades.

• Alcatel-Lucent and Motorola can point to their dominance of the North American fiber access market, on the strength of their relationship with Verizon, which is leveraging Alcatel-Lucent’s 7342 ISAM and Motorola’s AXS2200 platforms in one of the world’s largest GPON networks. Both vendors can also point out that, while Calix has generated strong, respectable numbers in the North American GPON market, each Calix customer supports an average of only 800 FTTP subscribers at present while the FiOS network is well above the two million mark.

• ADTRAN needs to match the Calix fiber access proposition in terms of both the active Ethernet and GPON support capabilities as it strives to establish a stronger foothold in this sector and mirror its success in the North American copper access market, especially with ADTRAN’s current GPON customer base numbering under 10 operators (compared to Calix’s 375). As such, ADTRAN arguably has a lot of catching up to do.

• Occam needs to highlight its BLC series, which has supported active Ethernet since day one, as well as its more recent offerings in the GPON sector. While Occam also possesses a respectable fixed access customer base consisting of well over 300 operators, less than 20% of Occam’s customers are leveraging the BLC gear for FTTP services (either active or passive).

• Zhone can highlight the merits of its new MXK FTTP platform, which offers one of the highest-capacity backplane/throughput capacities (400 Gbps) and throughput-per-slot (20 Gbps) capacities on the market, as well as the ability to support very high subscriber density/scalability metrics. For example, each 18-slot MXK 823 can support up to 3,600 x 100 Mbps GPON connections (via eight-port GPON line cards and a 1:25 split ratio) or 360 x 1 Gbps active Ethernet connections, market-leading specs by a great margin. Utilizing a 1:64 split ratio, the MXK 823 can support a staggering 9,216 GPON subs per chassis.

• Other FTTP contenders in the North American access space such as Allied Telesis, Alloptic, Enablence, Ericsson, Hitachi Telecom, and Tellabs also need to highlight their own respective active Ethernet and extended reach GPON solutions and/or market presence, where applicable. For example, Ericsson can point to the compelling Ethernet service delivery capabilities of its EDA 1200 series, while Alloptic and Enablence can highlight their solid customer traction in the RFoG and FTTP sectors, respectively.

CLIENTS ONLY

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Broadband Infrastructure | More information

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