Dycom says carrier customers are indicating interest in 10 Gbps FTTP services

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A Dycom executive said that some of its customers have put together plans to start offering 10G fiber-based services to customers in their respective markets.

Steven Nielsen, CEO of Dycom, told investors during its fiscal fourth quarter earnings call that while 1 Gbps GPON-based FTTH service deployments by large customers like AT&T are rising, the company is seeing some of its customers indicate interest in 10 Gbps fiber-to-the-premises (FTTP) services.

“A number of major industry participants are deploying significant wireline networks across broad sections of the country, which are generally designed to provision bandwidth enabling 1 gigabit speeds to individual consumers,” Nielsen said during the earnings call, according to a Seeking Alpha transcript. “One industry participant has articulated plans to deploy speeds to 10 gigabits while others are preparing to do so. These industry developments produce opportunities across a broad array of our existing customers, which in aggregate are without precedent for the industry in our experience.”

While Dycom did not specify which one of its carrier customers is looking at deploying 10G-based fiber services, it’s likely that telcos and cable operators will initially focus on business and wholesale service opportunities. Interest in 10G fiber services is being bolstered by the passing of the ITU-T’s NG-PON2 standard, enabling service providers to deliver 40 Gbps and 10 symmetrical Gbps speeds for each subscriber.

Verizon, for one, is currently conducting a field trial of NG-PON2 at its Innovation Lab in Waltham, Massachusetts, with equipment from Ericsson (in partnership with Calix) and Adtran. Adtran and Ericsson/Calix were chosen out of a group of six vendors that competed in an RFP the telco issued for NG-PON2 equipment.

During the trial, Verizon will examine several features of NG-PON2, including tuning performance, carrying residential and business services on the same platform, and interoperability and conformance testing to meet Verizon optical network terminal (ONT) specifications. By implementing NG-PON2 technology into its FTTP network, Verizon will be able to support up to 40 Gbps of total capacity and symmetrical 10 Gbps speeds for each customer on a single fiber.

Nielsen said that as service providers move to deploy 10G FTTP services, Dycom will be able to take advantage of new opportunities to provide engineering and construction of the fiber that passes the home and businesses.

“I think the fact that customers are spending R&D dollars on 10G tells you that they must see a need to deploy it,” Nielsen said. “And when they do, we think that will be an opportunity as another more application growth that drives the value of fiber connections.”

In the near-term, Dycom said a number of its service provider customers continue to roll out 1 Gbps services.

AT&T, which made up $222 million of Dycom’s fiscal fourth quarter revenue, continues to be aggressive with its 1 Gbps GigaPower builds. The telco has continued to ramp FTTH buildouts to meet the 12.5 million home commitment set by the FCC in order to get approval of its DirecTV deal.

“We are providing program management, engineering and design, aerial and underground construction and fulfillment services for 1 gigabit deployments,” Nielsen said. “These services are being provided across the country in dozens of metropolitan areas to a number of customers. Revenues and opportunities driven by this industry standard accelerated meaningfully during the fourth quarter of fiscal 2016.”

For more:
- read the Seeking Alpha earnings transcript (sub. req.)

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