Carriers are gradually starting to spend again, but the DWDM (dense wavelength-division multiplexing) market won't be heading upwards with any notable vigor, according to a new report from Insight Research Corp.

Instead, DWDM sales will lag those of Sonet/SDH equipment from now through at least 2008, according to forecasts in "Optical Networks: DWDM and SONET 2003 - 2008."

This isn't to say DWDM sales will drop out of sight -- or that Sonet/SDH is guaranteed to live forever. Thanks to recently developed OC48 (2.5 Gbit/s) and OC192 (10 Gbit/s) optical interfaces, routers now can hook directly to DWDM systems and save carriers the cost of optical-to-electrical conversion, the report says. Innovations also help, such as an "optical supervisory channel" that allows DWDM kit to match, at least in part, the much-touted management capabilities of Sonet equipment.

Unfortunately, though, a lack of traffic to justify buying high-speed interfaces in quantity, plus the optical bust of the last two years, have taken the wind out of DWDM research and development. "Contraction at the component level has slowed the wheel of innovation," says Robert Rosenberg, president of Insight Research. Without further infusion, it's unlikely DWDM gear will develop to the point where carriers will be motivated to swap it in place of existing Sonet gear.

One bright spot in the DWDM market is CWDM (coarse wavelength-division multiplexing), which is likely to be the sole source of growth for the technology in the near term. Indeed, metro deployments of CWDM are the only source of prosperity for optical gear right now, Rosenberg says.

While the Sonet market will return to its pre-boom levels over the next three years, carriers eventually will start to look more critically at Sonet's complexities compared with optical switching. But Sonet won't be widely replaced by DWDM anytime in the next decade.

— Mary Jander, Senior Editor, Light Reading