In this paper, we report on 32-channel dense wavelength division multiplexed passive optical network (WDM PON) with shared amplified spontaneous emission (ASE) light source. Proposed transmission system enables to simplify the architecture of PON network and has a dense channel spacing of 50 GHz as well as it is fully compatible with ITU T G.694.1 DWDM frequency grid. We investigated the performance of next generation passive optical network (NG-PON) compatible dense spectrum sliced WDM-PON system (SS-WDM PON) with 32 directly modulated 10 Gbit/s channels located in the optical C band. It is shown that maximal transmission distance for SS-WDM PON system can be increased by 23.8% if standard SMF fiber is being replaced with NZ-DSF fiber. Post FEC error free transmission has been demonstrated for all 32 channels over different optical fiber types (SMF and NZ-DSF) and line lengths of at least 100 km.