Tellabs moves ONTs indoors

Tellabs has introduced an optical network terminal (ONT) designed to be deployed inside customer homes, Chief Executive Officer Krish Prabhu said during an investor conference this week.

“Until now, ONTs have been deployed outside of the house,” Prabhu said. “As [carriers] take the ONTs inside, we can get quite a lot of cost improvement through new designs and a new class of semiconductors.”

Tellabs has been losing money on every ONT it sells as part of Verizon Communications’ broad fiber-to-the-premises deployment. As the carrier moved from passive optical networking (PON) gear to higher speed gigabit PON (GPON), Tellabs lowered its prices to fend off competitors. But the vendor now expects to break even on ONTs starting in the middle of next year.

To defray some costs, Tellabs has been and is still in discussions with an original device manufacturer that would serve as Tellabs’ partner in the ONT business.

Last month, one of Tellabs’ former financial executives was named Chief Financial Officer of TXP, a Texas firm that got into the ONT business last year by acquiring Siemens’ ONT product line.

In June, TXP’s vice president of marketing, Paul Forzisi, told Telephony North American carriers were “just starting to warm to the idea” of indoor ONTs. “In North America, [carriers have] hesitated because it doesn’t give them ready access to the box when the customer’s not home,” he said then.

But in another interview with Telephony at the NXTcomm trade show that same month, Prabhu said, “The number-one problem carriers have today [with FTTP] is labor: How long does it take to get a home on [the network]? If there's a substantial amount of labor cost that can be eliminated by moving the ONT inside, I think it'll happen sooner than you think.”