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September 29, 2006
Tier 1 carriers the world over, take note: Japanese incumbent NTT Group (NYSE: NTT) plans to build a 10-Tbit/s optical backbone network to cope with the capacity demands of a growing FTTH and high-speed DSL customer base.
The carrier's growth in high-speed broadband connections is putting its current 1-Tbit/s backbone under strain, something that might attract attention from the likes of AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). (See AT&T VP: 100-Gig by 2010, Verizon to Pump $18B Into FiOS by 2010, and AT&T Readies 40-Gig Backbone.)
NTT's revelation came at this week's ECOC optical conference in the South of France, where the carrier presented a paper on 14-Tbit/s transmission over a single fiber. (See NTT Demos 14 Tbit/s.)
(The Japanese carrier wasn't the only company shouting about transmission breakthroughs this week -- see Lucent Stretches 100-GigE and Ericsson, T-Com in 43-Gbit/s Trial.)
NTT says it needs to step up from its current DWDM backbone, which multiplexes 10-Gbit/s signals, to a 10-Tbit/s network that can support multiple 100-Gbit/s channels because "data traffic has been doubling every year due to the rapid spread of broadband access." NTT says 10-Tbit/s transmission over a single fiber has so far been achieved in the lab.
"NTT is further ahead in its requirements because it has already deployed millions of FTTH and high-speed DSL connections delivering very high-bandwidth services," says Heavy Reading senior analyst Graham Finnie. "Most of NTT's broadband customers have at least 50-Mbit/s connections."
NTT announced in November 2004, when it already had 1.2 million FTTH customers, that it planned to spend ¥5 trillion (US$42.4 billion) over seven years to expand its fiber access footprint to reach half its total market, about 30 million customers. (See Asia Carriers Live in Interesting Times and Report: NTT Plans FTTH Blowout.)
Finnie noted in his recent report, FTTH Worldwide Market and Technology Forecast, 2006-2011, that NTT's FTTH customer base had risen to 2.7 million by the end of September 2005. (See FTTH Hits Mainstream and FTTH Surge Coming.)
The news comes as Lehman Brothers analyst Jiong Shao reports in a research note that Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (NYSE: JNPR) look set to share the IP equipment purchase orders for NTT's next-generation network.
The analyst notes that the two vendors look set to deliver a low volume of core and edge routers for a field trial at the end of next year, with commercial deployments in late 2007 and 2008.
The analyst believes NTT will spend $10 million on the field trial equipment, and then $100 million on core routers and $750 million on edge routers over a five-year period, with the field trials determining which, if either, vendor picks up the lion's share of the spoils. Shao adds that NTT's decision looks "negative for Redback Networks Inc. ."
— Ray Le Maistre, International News Editor, Light Reading
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