Market Report - Metro Lightwave: A Forecast and Analysis of Optical Networking in the Metropolitan Market

Market Studies
1394 Market and Technology Study
Metro Lightwave: A Forecast and Analysis of Optical Networking in the Metropolitan Market

Published: June 2001

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Overview:

Metro DWDM Market being Driven by a ‘Squeeze in the Middle" A new report from IGI Consulting Inc. (www.igigroup.com) has identified a squeeze play that is driving the market for Metro DWDM equipment and other equipment needed in the metro arena. The report (to be available in June form IGI) notes that the metro network market is caught between the big interexchange carriers, several of whom have recently completed massive long-haul networks, and the insatiable demand for high-speed access by end users.

The report forecasts that there will be over 43,000,000 high-speed accesses by end users by the year 2005. The following is the growth projected:

  • 2001 - 14,291,000
  • 2002 - 21,400,000
  • 2003 - 29,500,000
  • 2004 - 36,900,000
  • 2005 - 43,500,000

(These projections include all types of high-speed accesses – xDSL, cable modems, and RF accesses.) The metro area networks will function primarily to allow graceful interconnections between these end users (through their local POPs and ISPs) and the interexchange networks with their huge capacity. Mr. Holliday, the author of the report, and President of B & C Consulting Services, notes, "Metro Networks have always existed in the telephony world. These networks originally existed to expand the connectivity from a local neighborhood serving office to the entire metropolitan area. Now they must serve as data interexchange between the massive fiber networks of the carriers, and the data being originated by local customers. This is a much more demanding task, and there are a number of new systems now on the market, to address just this need. Dr. Polishuk, President of IGI Consulting, comments, "This report provides a comprehensive review of the equipment available in this field, as well as the vendors, including both the larger Metro DWDM systems and the smaller systems aimed at individual enterprise customers. The report is extremely timely because metro networks are rapidly emerging as one of the hottest optical areas, even in the face of the current down turn." Mr. Holliday concludes, "We forecast that this very important market are will be over $5,000,000,000. in the US by the end of 2005."

Table of Contents


SUMMARY OF CONCEPTS

INTRODUCTION

Origin of Metro Networks

  • Example of ILEC Metro Rings
  • Metro DWDM as a Point of Flexibility

THE BATTLE FOR THE HEART OF THE CITY

Circuit Routing

  • The OXC as an Offensive Device
  • Example of Using OXCs to Expand Business Horizons

CURRENT ACTIVITIES IN METRO NETWORKS

Getting to the Buildings
Carrier Activity

MARKET DRIVERS

Introduction
Thirst for Broadband Access
What about 2001?
High Speed Access Forecast

  • xDSL Forecasts
  • Cable Modem Forecasts
  • Radio-Based High-Speed Line Forecasts
  • Fixed Wireless
  • Satellite-Based Service
  • Total High-Speed Residential Line Forecast

"Up Network" Traffic Implications of High-Speed Accesses
Other Internet Traffic Sources

  • VoIP – Voice over IP
  • B2B – Business-to-Business Traffic
  • Offshore IP Growth
  • Summary of Other Internet Traffic Sources

MARKET FORECASTS

  • Forecast for High-Speed Accesse
    • Transfer Rate
    • Busy Hour Traffic
    • Peaking
  • Forecast for Internet Total Traffic
  • Forecast for Metro DWDM Equipment
  • Forecast for Metro Access Network Equipment
  • Conservative Forecast
    • Adverse Factors in the Current Market
    • Delayed Growth Forecasts

PRICE FORECASTS

Forecasts for Metro DWDM
Forecasts for Access Network Equipment

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
  • Prepare for ‘Beyond Forecast’ Demand from Internet Traffic
  • Competitive Reasons
  • Desire to ‘Stockpile’ Bandwidth – Ahead of Demand
  • Desire to Offer Advanced Transport Services
  • Desire to Improve Reliability
  • Desire to Improve Flexibility and Operational Characteristics
  • Conclusions on Use of M-DWDM

Traffic Model for M-DWDM Planning
Metro Environment Model
Metro DWDM vs. Multiple Fiber Cost Model

  • Metropolitan DWDM Systems – Economic Analysis
  • Cost Factors for Metro DWDM Systems
  • Derivation of M-DWDM Breakeven Model
  • Using the M-DWDM Models
  • Variations

METRO DWDM EQUIPMENT SUMMARY AND VENDOR PROFILES
Metro DWDM Equipment Summary
Metro DWDM Equipment Supplier Profiles

  • Alcatel
  • Alidian
  • Centerpoint Broadband Technology
  • Chromatis Networks (Lucent)
  • Ciena
  • Cisco
  • Ericsson
  • Fujitsu
  • Kestrel Solutions
  • Lightchip
  • Lucent (Chromatis)
  • Marconi
  • New Access (Zaffire)
  • Nortel
  • OPTera Metro 3000 Multiservice Platform series
  • Optical Networks (ONI)
  • Osicom Technologies Inc. (Sorrento Networks)
  • Pirelli (Cisco)
  • Qeyton (Cisco)
  • Siemens (Optisphere)
  • Sorrento Networks Inc. (Osicom)
  • Sycamore
  • Tellabs
  • Zaffire (New Access)

ACCESS NETWORK EQUIPMENT
Metro Access Networks - Application Notes

  • Type of Access Ring Applications
  • Example of Typical Aggregation Capabilities
  • Enterprise Application
  • Access Rings as Feeders of Metro Rings
  • Ethernet Rings Application

Ring Topology Options

ACCESS NETWORK EQUIPMENT SUMMARY AND VENDOR PROFILES Access Network Equipment Summary
Access Network Equipment Supplier Profiles

  • Accordion Networks
  • ADC Telecommunications
  • ADVA
  • Astral Point Communications
  • Atmosphere Networks
  • Atoga Systems
  • Ciena (Lightera and Omnia)
  • Cisco Systems
  • Fujitsu
  • Ignitus Communications LLC (Lucent)
  • Intelect Communications
  • Luminous Networks
  • Lucent
  • LuxN
  • Mayan Networks
  • Metro-Optix
  • NEC Eluminant
  • Net Insight
  • Nortel
  • Quantum Bridge
  • Sirocco Systems (Sycamore)
  • Terawave Communications

APPENDIX I. ECONOMIC MODEL RING VS. MESH DESIGN
Introduction
The Ring Architecture
The Mesh Architecture
Breakeven Model

Business Plan Implications

  • Operational Costs Impacts
  • Revenue Impacts

Summary of Business Plan Impacts

APPENDIX II. MESH VS. RING ECONOMICS

Mesh vs. Ring Systems

  • What is a Ring Topology?
  • What is a Mesh Topology?
  • The Economics of Mesh vs. Ring
  • Cost Factors for Mesh vs. Ring

APPENDIX III – MATRIX OF PROVIDERS

APPENDIX IV – LISTING OF ACRONYMS

Table of Figures


  • Figure 1, Heart of the City Battle
  • Figure 2, OXCs Interconnecting Markets
  • Figure 3, The Squeeze in the Middle
  • Figure 4, SBC xDSL Gain in 2000
  • Figure 5, xDSL In-Service End of 2000, Selected Companies
  • Figure 6, 2001 xDSL Results
  • Figure 7, xDSL Forecast – US
  • Figure 8, Cable Modem Forecast
  • Figure 9, Fixed Wireless Forecast – US Subscribers
  • Figure 10, Satellite High-Speed Access - US Subscribers
  • Figure 11, Comparison of xDSL and Cable Modem Forecasts
  • Figure 12, Total High-Speed Access Lines – By Type
  • Figure 13, Total High-Speed Access Lines
  • Figure 14, High-Speed Accesses vs. Household Growth
  • Figure 15, 'Up-Network' Impact of Residential Demand
  • Figure 16, Business VoIP Growth
  • Figure 17, B2B Value Projections
  • Figure 18, Transatlantic Traffic
  • Figure 19, Total High-Speed Access Lines
  • Figure 20, Transfer Rate Forecast
  • Figure 21, Internet Traffic Project
  • Figure 22, Current Analysts' M-DWDM Forecasts
  • Figure 23, US M-DWDM Market Forecast
  • Figure 24, Annual New M-DWDM Terminals
  • Figure 25, Forecast for Network Access Equipment
  • Figure 26, Delayed Growth Forecast - US M-DWDM
  • Figure 27, Delayed Growth Forecast - US Network Access Equipment
  • Figure 28, Price Forecast OC-48 Terminals
  • Figure 29, Price Forecast OC-48 Channels
  • Figure 30, Price Forecast - Network Access Equipment
  • Figure 31, Metro DWDM Typical Layout
  • Figure 32, Metro DWDM System Characteristics
  • Figure 33, Metropolitan Network Model
  • Figure 34, DCS / M-DWDM Architecture
  • Figure 35, Traffic Model for Exploring Need for M-DWDM
  • Figure 36, CO-to-CO Route Using Multiple Fibers
  • Figure 37, M-DWDM CO-to-CO Route
  • Figure 38, Table Comparing Cost Components of Fiber vs. M-DWDM
  • Figure 39, Model for M-DWDM Economic Advantage
  • Figure 40, Model for M-DWDM Breakeven Point
  • Figure 41, Breakeven Chart for M-DWDM
  • Figure 42, Two-Fiber UPSR Model
  • Figure 43, Summary of Available M-DWDM Systems
  • Figure 44, Access Network Layout
  • Figure 45, Aggregation Capabilities
  • Figure 46, Enterprise Application
  • Figure 47, IP Data Metro Network
  • Figure 48, IP Metro Network Customer Connection
  • Figure 49, Available Access Systems
  • Figure 50, FSN 1200 and NTU 300 Applications
  • Figure 51, Cisco 6400 Universal Access Concentrator Application
  • Figure 52, OmniLYNX family
  • Figure 53, WavSystem Application
  • Figure 54, Vista Applications
  • Figure 55, Quantum Bridge Products
  • Figure 56, Ring Topology with Protection Facility
  • Figure 57, Mesh Network with Protection
  • Figure 58, Graph of Mesh vs. Ring Costs – Two OXCs
  • Figure 59, Ring vs. Mesh, High Data Traffic, Full OXCs
  • Figure 60, SONET Rings
  • Figure 61, Through Lambdas at an ADM
  • Figure 62, Ring Drop Equipment Example
  • Figure 63, Mesh Layout of Previous Example
  • Figure 64, Terabit Router Example
  • Figure 65, OXC Example
  • Figure 66, Combined TR and OXC Example
  • Figure 67, Ring Topology with Protection Facility
  • Figure 68, Mesh Network with Protection

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