Abstract
Overview
This report investigates the market and technologies for major items of
network infrastructure. We will do this by reviewing the markets for several
dominant types of telecommunications equipment: ROADMS, DWDM, Routers, and
Switches. From this review, the report provides North American and World
Forecasts for each type of equipment through 2017.
Today' s carriers have a pressing need to integrate networks and services. This
integration is being based on elements like next-generation DWDM, IP,
next-generation SONET, and optical switches - but more than anything else, it
is based on ROADMs, DWDM, and IP. The integration is directed at making the
total network more flexible, more reliable, and less labor-intensive. The main
market driver for ROADMs is the desire of the carriers to save operating
expenses. The new video thrusts by the major combined RBOCs provide a new
driver for ROADM/DWDM deployment. These companies are in the process (close to
complete) of deploying nationwide networks to deliver video on their fiber
access local networks. ROADMs and DWDM are the perfect adaptation to enable
and control these video distribution services. In addition, the forecasted
increase in wavelength services is going to greatly facilitate the deployment
of networks.
As these new networks have overwhelmingly become IP and/or Ethernet based, the
role of routers and switches has also increased. All the new delivery networks
(e.g., FiOS and U-verse) are based on IP delivery of triple-play services.
These networks make extensive use of routers and switches.
It has been five years since our last network equipment market forecast. We
have published several reports in the interim concerning various parts of the
network (ROADMs, high-speed access, etc.), but we have not updated our view of
the total telecom equipment markets in over five years. In that time, many
things have occurred that dramatically influence that market. Our recent
report, “North American Traffic Forecast - 2011”, noted the
following changes in traffic that are the fundamental driver of all equipment
requirements:
- The dramatic rise in traffic from Advanced Access Architecture (AAA) lines
(FTTP and FTTN);
- The startling increase in IPTV traffic;
- The increase in popularity of using mobile devices, and especially using
them for data-intensive applications;
- The increase in overseas traffic, especially from the booming economies of
the Far East;
- The relative decline (in the period of this forecast) of high-speed access
lines and the traffic from them. This includes xDSL lines and cable modems.
In addition to the changes in traffic sources, patterns, and absolute
quantity, there are many changes that have taken place in the economic
infrastructure of the market. Perhaps the most important is the recession of
the late 2000s and the slow recover that is now occurring in 2011. Also, the
carrier industry has greatly consolidated so that now two major players (AT&T
and Verizon) dominate the network in every way - much as the old AT&T did,
maybe even more so.
Existing Networks
The existing IXC networks, at almost every level, are conglomerates of various
generations and types of technologies. To an extent, this has always been the
case, but now it is more so than ever, because of the timing of the telecom
burst (1999-2000) and the relatively recent acquisitions of the major IXCs by
the RBOCs. Telcos (and others) were just in the beginning stages of
implementing the new optical technologies (DWDM, optical switches, M-DWDM)
when the burst occurred. We still have "stacked SONET" residing alongside
DWDM, and, in some cases those are alongside some version of "god boxes," and
maybe enhanced SONET. Capital constraints prevented the initiation of any real
replacement program for the older technologies. In addition, while we were in
a deep freeze as to investment, technology and product advancements continued.
Capital started loosening up in late 2004. The years since - especially from
2004 through 2007 - brought an even greater loosening of the capital strings,
and this continues in 2011 with the slow recovery from the 2008 recession.
However, in spite of a return to much freer capital, there is still strong
pressure for profitability, demanding expense containment.
In addition to the telecom burst and the resulting capital constraint that
delayed updating of the IXC networks, the early days of 2005 brought a spate
of acquisitions (SBC-AT&T and Verizon-MCI) that have all but eliminated the
independent IXC business. The later merger announcement of AT&T and BellSouth
served to accentuate the trend. While these mergers offer many economies of
scale, they also bring together existing, disparate networks. Now these two
companies (AT&T/SBC and Verizon) are in the process of integrating their own
long-haul assets with the newly acquired ones, and integration of their metro
facilities with the long-haul to allow seamless customer access. They are
seeking operational efficiencies and the elimination of duplication.
Table of Contents
Table of Contents
Table of Figures
The Lightwave Network Series of Reports
The Lightwave Network
The Lightwave Series of Reports
- General Reports on the Network
- General Market Reports
- Specific Systems Reports
Introduction
Existing Networks
Economic Background
Traffic Forecast
Approach to Forecasting Traffic on the Internet
Total Network Traffic
Traffic Forecasts Total Network Traffic - NO IPTV
Total Traffic Forecast - Including IPTV
Growth of the Internet
ROADMs
Defining ROADMs
Types of ROADMs
- Summary of ROADM Features by Utilization
- Summary of ROADM Types by Generation
- Summary of ROADM Description
Edge ROADM Applications
ROADM Forecast
ROADM Systems - US Forecast
- US Edge ROADMs
- US Market Forecast
World Market Forecast
DWDM
Components of a DWDM System
Metro DWDM
What is Metro DWDM?
Why use Metro DWDM?
- Reasons for Metro DWDM Implementation
- “Plant Extension” Reasons
- Fiber/Duct Exhaust
- Obsolete Electronics
- New Wire Center Development
- Comparative Economics of OC-48 + DWDM vs. OC-192
- Competitive Reasons
Types of DWDM - 40 and 100 Gbps Channels
DWDM Forecast
- North American Forecast
- World DWDM Forecast
Switches
- Switch Types
- TDM Switches
- ATM
- DACS
- Drivers to DACS Deployment
- OXCs
- The Parallel Universe of OXCs
IP Switches
Switch Forecast
- North American Switch Forecast
- World Switch Forecast
Routers
Routers' History
- Why Use Routers?
- Traditional Router Technology
Traditional Router Applications
Router Forecast
- North American Forecast
- World Router Forecast
Technologies
Underlying Technologies
General Technologies
- MEMS
- Grating Light Valve (GLV)
- Planar Lightwave Circuits
- Liquid Crystal
- Fiber Bragg Grating
Review of Basic Technologies
- OEO
- MEMS
- Two Approaches to MEMS
- Digital Approach
- Analog Approach
- LCD
- Bubbles (Inkjet) - Planer Lightwave Circuits
- 1 D Technology
Summary of Characteristics of Each Technology
- Comparison of Transparent and Opaque Switches
Protocols
Router Software
- Basic Transmission Protocols: SONET, ATM, IP
- Why Are the Differences Among these Protocols Important?
- Type of Transmission
- Cell Tax
- Class of Transmission
- Summary of Protocol Characteristics
Routers' Protocols
- Dynamic Routing Protocols
- Quality of Service (QoS) Protocols
- Quality of Service (QoS) Protocols
Vendors
Vendors
System Vendor Listing
- Adva Optical Networking
- Alcatel-Lucent
- Avvio Networks
- Ciena
- Cisco
- ECI
- Ericsson
- Fujitsu
- Infinera
- Huawei Technologies
- Mahi Networks (formerly Photuris) - Meriton - Now Xtera
- Marconi Corporation plc (Ericsson)
- Meriton Networks
- Movaz Networks (ADVA)
- NEC America Inc.
- Nistica
- Nokia Siemens (NSN)
- Nortel
- OpVista Inc.
- Tellabs
- Tropic Networks (Alcatel-Lucent)
Table of Figures
- Figure 1: Lightwave Network
- Figure 2: Premise for Forecasting Traffic on the Internet
- Figure 3: Internet Traffic Formula
- Figure 4: Total Traffic Forecast (No IPTV)
- Figure 5: Growth Rate - All Traffic - No IPTV
- Figure 6: Total Traffic Forecast - Including IPTV
- Figure 7: Backbone Growth Rates (Includes IPTV)
- Figure 8: All Traffic Components with IPTV
- Figure 9: Total Traffic Forecast and Growth Rate with IPTV
- Figure 10: Internet Components Forecast
- Figure 11: ROADM General Configuration
- Figure 12: Summary of ROADM Types by Utilization
- Figure 13: Four Generations of ROADMs
- Figure 14: ROADMs across the Network
- Figure 15: Example of Edge ROADM Application - Telco
- Figure 16: Example of Edge ROADM used by Cable Company
- Figure 17: ROADM System Unit Forecast - US
- Figure 18: US Market - Change in Predominant Type of ROADM over Time
- Figure 19: US Edge ROADMs Systems
- Figure 20: Price Forecast for ROADMs
- Figure 21: ROADMs Market Forecast - US
- Figure 22: ROADM Market - US - By Technology
- Figure 23: World ROADM Systems by Type
- Figure 24: World ROADM Market
- Figure 25: World ROADM Market by Types
- Figure 26: Typical DWDM Layout
- Figure 27: Metro DWDM Typical Layout
- Figure 28: Metro DWDM System Characteristics
- Figure 29: North American DWM System Ends
- Figure 30: North American DWDM Market
- Figure 31: US DWDM Forecast by Channel Speed
- Figure 32: DWDM - World Forecast - System Ends
- Figure 33: DWDM World Market Forecast
- Figure 34: DWDM World Forecast by Speed
- Figure 35: North American Switch Market Forecast
- Figure 36: North American Switches - Units Forecast
- Figure 37: World Switch Market
- Figure 38: World Switches - Units
- Figure 39: Router Layout
- Figure 40: Router Applications
- Figure 41: North American Routers - Total - Units
- Figure 42: North American Routers Total Market
- Figure 43: North American Router Market - By Types
- Figure 44: World Router Forecast - Units
- Figure 45: World Router Market - Total
- Figure 46: World Router Market - By Types
- Figure 47: MEMS Layout
- Figure 48: Sketch of Two Dimensional MEMS
- Figure 49: Sketch of Multi-Dimensional MEMS
- Figure 50: Sketch of Liquid Crystal Technology
- Figure 51: Sketch of Bubble Technology
- Figure 52: Characteristics of Each Technology
- Figure 53: OSI Model
- Figure 54: SONET, ATM, IP
- Figure 55: SONET Frame
- Figure 56: ATM Cell Structure
- Figure 57: IP Frame Structure
- Figure 58: Summary of Protocol Characteristics
- Figure 59: Router Protocols
- Figure 60: MPLS Routing
