Packet optical transport systems, 100-Gigabit transport, and fiber-to-the-home are hot topics at this year's Optical Expo

September 28, 2007

4 Min Read
Optical Expo: A Look Ahead

The optical networking market has stabilized and has started to solidly rise again in the past couple of years. And thanks to video applications, profitable enterprise services, and maturing components and technologies, it doesn't look to let up anytime soon.

That's worth pointing out, because Light Reading's second annual Optical Expo, which kicks off October 2 in Dallas, is where representatives from AT&T Inc. (NYSE: T), Level 3 Communications Inc. (NYSE: LVLT), and Verizon Communications Inc. (NYSE: VZ) will be gathering to discuss service provider needs and wants from the optical equipment market.

Some of the items they'll be talking about include:

  • Service provider spending. Let's face it: There wouldn't be an Optical Expo if there weren't carriers buying optical gear. But they are buying, and this buying cycle looks sustainable. Service providers have a real need for capacity, says Bill Wohnoutka, Level 3's VP of business development for its Content Markets Group. "We see the current path not being able to meet the rate at which we're scaling bandwidth," he says. That need for capacity will continue to drive service provider demand, as bandwidth needs continue to increase.

  • Services rule. It's not enough for service providers to provide fat, dumb pipes without making a dime off of what passes over them. Service providers are looking to make money off these network upgrades, and differentiated services are the way to get there. The most visible driver is video, which Tier 1 telcos are counting on to retain customers and drive new revenues. Heavy Reading analyst Sterling Perrin says, "Anything to do with video is all new revenue for the operator on the telco side." But how much will they have to spend before realizing some return on investment?

  • BPON, GPON, WDM-PON? The increase in multimedia and deployment of video on demand and IPTV services "most impacts the access network, because that's where the least amount of bandwidth is," Perrin says. So how long will carriers go before they start talking about WDM-PON as the next wave of fiber-fed access to the home, MDUs, and businesses?

  • Networks are converging. Why have one network for voice and another for data? Service providers are increasingly looking for solutions that combine Sonet, wavelength switching, and connection-oriented Ethernet functionality on a single device. Joe Berthold, VP of Network Architecture at Ciena Corp. (NYSE: CIEN), says connection-oriented Ethernet, in particular, is redefining the way carriers think about transport: "While your old transport networks were T1 networks multiplexed into Sonet, and then Sonet on WDM, your next-gen transport is going to be Ethernet virtual circuits into OTN [Optical Transport Network] containers, and then that will be put onto wavelengths." But there's still some question as to how many service providers will migrate to these platforms, and how quickly.

  • 100-Gig is on its way. 40-Gbit/s products are currently on the market, but most service providers are already looking forward to 100-Gbit/s. Last year at the Optical Expo, AT&T Inc. (NYSE: T) was talking about putting 100-Gbit/s equipment in the core by 2010. And Verizon Communications Inc. (NYSE: VZ) is setting an even more aggressive target by announcing plans to test 100-Gbit/s long-haul equipment by the end of this year. (See AT&T VP: 100-Gig by 2010 and Verizon Gears Up for 100 Gig.) That could lead to a short shelf life for 40-Gbit/s solutions, especially if 40-Gbit/s pricing remains higher than what most service providers would like to pay. As Level 3's Wohnoutka puts it: "We really need 100 gig -- 40 gig isn't enough of a quantum leap."

    While it's clear that service providers are taking advantage of new optical technologies available to them, they are taking many different approaches to building out their networks.

    BT Group plc (NYSE: BT; London: BTA), for instance, is moving to an all-IP infrastructure through its 21CN project while most other carriers are building overlay networks to support legacy infrastructure while migrating to IP. Verizon is taking fiber to the premises, while AT&T is going to the node. And while some carriers are beginning to deploy 40-Gbit/s equipment in their networks, others are looking ahead to deploying 100-Gbit/s gear by the end of the decade.

    That's why there will be panels on packet optical transport, building dynamic optical networks, next-generation access developments, and the drive towards 100-Gig. There will also be keynotes by representatives of AT&T and Level 3, among others, and a panel where service providers and end users discuss their perspectives on the optical network.

    See you in Dallas!

    — Ryan Lawler, Reporter, Light Reading

    Come to Optical Expo 2007, a conference and exhibition that will explore critical issues facing the optical networking industry. To be staged in Dallas, October 2 & 3, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.

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