Assessing the Indian Telecom Equipment Opportunity: Part 2
Sterling Perrin, Principal Analyst, Heavy Reading
Last month we wrote about the general telecom environment in India. (See Assessing the Indian Telecom Equipment Opportunity: Part 1.) In this second part of our look at India, we focus specifically on the major packet-optical trends in India, based on our interaction with operators at Light Reading's Next-Generation Packet Transport Networks Conference, which was held in September.
As our research partners at Tonse Telecom have written, Indian operators are preparing for a massive mobile data boom that will require a new architectural approach. The wireline network approach, so far, has centered primarily on TDM and SDH for the backhaul network, and so, going forward, the move is toward a packet-centric architecture that also accommodates Indian operators' existing investments in SDH equipment.
Common themes in operator presentations at Next-Generation Packet Transport Networks Conference included:
- How to scale and accommodate data growth
- How to ensure cost per bit is lowest
- Building the relevant talent pool for data services within organizations that have been built around voice services
- Dealing with the opex and capex of legacy networks
In this sense, Indian operators' networking concerns are similar to those expressed by large operators in every other region of the world. And many of the solutions proposed by suppliers and discussed by operators are consistent with our dealings globally. Among the next-gen optical technologies of interest to Indian operators are:
- Switched OTN, including ODU0 and ODUflex for the network core
- ROADMs in the core, including the emerging generation of ROADMs with colorless, directionless and contentionless functionality
- Converged packet-optical transport systems for the metro core and aggregation as a migration path for the existing SDH network
- Connection-oriented Ethernet in the form of MPLS-TP throughout the metro network for packet-based mobile backhaul traffic
Still, there are some major features of the Indian telecom market that make it unique -- or at the very least, markedly different from many of the other countries that are considering similar technologies for next-gen optical networks. Indian Institutes of Technology Professor of Computer Science and Engineering Ashwin Gumaste stirred the pot when he suggested to the Indian audience that the best approach for the future is to cut loose from the legacy past and build directly for the future with packet switching -- bypassing the step to OTN altogether.
Such a statement is controversial, without a doubt, but it does force us to consider that India is different from mature Western markets in many ways. First, the Indian SDH boom is relatively recent; while there is a large installed base of SDH equipment, the base is still relatively small compared to the decades of massive Sonet/SDH spending by major operators in North America and Europe. Second, we view 100G transport as one of the four major drivers of switched OTN, but the opportunity for 100G in India is likely very small. India lacks the advanced wireline access networks that deliver the vast majority of traffic on major operator networks today. Over the next five years, it is difficult to imagine mobile traffic generating sufficient volumes to justify 100G (and, again, 100G and OTN are partner technologies to a degree).
A final interesting distinction can be made with respect to ROADM technologies. In the West, a lot of the ROADM focus is on the opex savings benefits of provisioning bandwidth without requiring costly manual labor (or truck rolls). But in India, labor costs are extremely low, and we note that in the low-labor-cost nation of China, there has not been significant demand for ROADMs.
In summary, differences in the optical market are significant. We are not saying that technologies such as OTN or next-gen ROADMs will fail in India. As we noted, and as Tonse Telecom has written, Indian operators are indeed asking about all of them. But we can't assume that every technology that fits the U.S. market, for example, will also be a fit for Indian operators. Furthermore, the Indian optical opportunity is large enough that operators can demand market-specific innovation for their network evolutions.
— Sterling Perrin, Senior Analyst, Heavy Reading