AT&T Readies 40-Gig Backbone
Delivering the second-day keynote to a packed room, Stankey outlined AT&T's overall plan following on the completed merger with SBC and the pending BellSouth Corp. (NYSE: BLS) acquisition. Most of his talk involved lots of big numbers -- 5.6 petabytes of traffic per day traversing AT&T's network, for instance -- and breathless proclamations about the cornucopia of cool but really vague "converged" services coming for consumers and businesses.
All that -- plus Project Lightspeed, AT&T's initiative to bring broadband to the home -- translates to massive network growth. Hence the OC768 buildout, which Stankey said will be placed "in key routes between 31 cities throughout AT&T's U.S. backbone network."
Initial OC768 deployments should be done by the end of the first quarter of 2007 and are included in AT&T's capital expenditure budget of $8 billion to $8.5 billion for this year, Stankey said.
OC768 upgrades are beginning to trickle into carrier networks at last, says Michael Howard, president of Infonetics Research Inc. AT&T will be using Siemens AG (NYSE: SI; Frankfurt: SIE) DWDM equipment for its OC768 buildout, he says. And MCI -- now glommed into Verizon Communications Inc. (NYSE: VZ) -- announced plans for OC768 in December, saying it would use gear from Juniper Networks Inc. (NYSE: JNPR), Mintera Corp. , and Xtera Communications Inc. (Nasdaq: XCOM) (See MCI Reaches 40 Gbit/s.)
And Deutsche Telekom AG (NYSE: DT) and Orange (NYSE: FTE) are seeing a need for 40-Gbit/s wavelengths on some routes in Western Europe, Howard said.
While they're at it, carriers might end up rebuilding the core optical network rather than simply upgrading it -- Howard says he's seeing requests for information and requests for proposals to that end. "The business model no longer looks good for putting new wavelengths in old equipment," he says, because the new breed of optical equipment is less costly to maintain and easier to operate than older models.
Of course, that's nice news for the equipment vendors. "We upgraded our long-term forecast of DWDM last quarter and again this quarter," Howard says.
Separately in his keynote, Stankey proclaimed AT&T's love for the IP Multimedia Subsystem (IMS) infrastructure, which many equipment vendors are pitching as a means of serving wireless and wireline services on the same network.
"With full ownership of Cingular Wireless combined with the BellSouth and AT&T networks, we will have a fully converged wireless and wireline network," he said. "It's much more of a software-driven network than we have seen in the past, and what that really means is that the pace of innovation will increase exponentially."
He also noted that the changes in the network will lead to new sets of partnerships for AT&T, not just with other carriers, but with content and applications providers as well. He offered no predictions of what these future partnerships might look like, saying it's just too early to tell. "The business relationships and business alignments of the last 20 years will not be adequate for the next five years."
Stankey also took a minute to address Project Lightspeed's status, possibly responding to recent criticism that the bandwidth isn't adequate for HDTV. (See Is Lightspeed Slowing? and Lightspeed Slowing? Part II.)
"We've been very pleased with the bandwidth we're getting," which is 20 Mbit/s to 25 Mbit/s at 4,000 feet, Stankey said. He added that AT&T is "solidly on target" to roll out U-Verse, the video service provided via Lightspeed, "in 20 markets by the end of this year."
— Craig Matsumoto, Senior Editor, Light Reading