Economics of Time and Wavelength Domain Multiplexed Passive Optical Networks

Passive optical networks (PONs) are being widely considered as a means to implement fiber-to-the-home (FTTH) and deliver broadband access to business and home users. However, technical and consequently regulatory and economic complexities arise in light of their deployment. In this paper, an evaluation of the business prospects of time division multiplexed (TDM) and wavelength division multiplexed (WDM) PON architectures for FTTH deployments under different rollout conditions is performed, based on the ECOSYS techno-economic methodology and tool. The importance of various cost components (fiber installation, optoelectronic components, etc.) is discussed. Using sensitivity analysis, the effect of various parameters such as duct availability, cost of civil works, etc. on the prospects of the investment are investigated. These results reveal several important techno-economic aspects that should be considered by telecom operators, regulators, and policy makers towards a successful FTTH deployment strategy.