Abstract
This letter develops an analytical model to describe the economics of time- and wavelength-division multiplexed (TWDM) passive optical networks (PONs). The network operator is modeled as a profit maximizer that offers multiple subscription plans. The end users either select one of these offers or refrain from availing the service. In this circumstance, the profit maximization problem of the operator appears to be a mixed-integer nonlinear program. The solution to this problem provides insights into the economics of PONs. For example, the analysis systematically identifies the range of parameters where the operator earns a positive profit and thus ensures that the network is economically sustainable.
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