The question as to whether Europe faces a "fibre glut" has assumed increasing importance in the light of recent business failures involving the likes of KPNQwest and Worldcom. But to answer the question adequately one must decide how to measure the capacity available and whether future capacity needs are understood. There is also concern that bottlenecks still exist across Europe so, if there is a fibre glut, how can it be used to address this problem?
In the USA venture capitalists and other financial backers are becoming nervous as to how their investments will perform over the coming years. The communications industry there is therefore now working on answering the question to the satisfaction of suppliers, carriers and this financial sector.
The Telecommunications Industry Association in the USA has now issued a white paper establishing definitions of network capacity terms, and the organisation is now questioning carriers and analysts in the USA to find out whether the country faces a damaging fibre glut.
One driving force for the white paper was the number of names and categories being used to measure capacity and the confusion which is often generated by them in the financial sector and media.
For the European market, some of the definitions in the TIA white paper (Optical Network Capacity and Utilisation: Clarifying Terms and Definitions) could prove useful. If a similar initiative is to happen in Europe, it may be left to the European Commission to initiate it. But so far there is no such project.
At this year's European Conference on Optical Communications in Copenhagen, however, there were firm opinions as to whether the capacity which has been built is actually needed.
John Marsh, chief research officer at Glasgow's Intense Photonics, said: "Demand for bandwidth will increase 300-fold over the next eight to ten years, and I see no reason why this scenario should change, even under the present economic situation."
But analysts questioned after ECOC were less enthusiastic about the capacity currently available and the number of operators in the market seeking to fill it.
Karl Desfontaines, a consultant in France for Analysys, says the situation in France demonstrated the problem of capacity which the whole of Europe faced. "The main dark fibre supplier in France is LDCOM, and it now can't sell its capacity easily. The number of players in the backbone market has gone down with the demise of companies like KPNQwest, and LDCOM is now struggling to fill its capacity with retail companies who deal directly with end users."
Desfontaines adds: "Many companies who bought dark fibre to light from LDCOM planned to sell it on to others, but they have largely failed. In terms of pan-European or large regional carriers, I would say there is now only room for two or three players."
He added it was technically possible to carry all the traffic from London to Paris over one fibre. Even allowing for the fact that some carriers do not like to share and for the necessary redundancy (extra capacity) which has to be built into such an important connection with additional fibres, the current number of fibres between London and Paris and between other major cities is too high.
The financial performance in terms of sales recently achieved by some of the major fibre suppliers has also decreased 10-fold, he says. Based on the number of fibres which were available and which were actually needed Desfontaines strongly believes Europe is facing a fibre glut (Fig.1).
As for the fibre suppliers, OFS believes there is no general fibre glut, rather a problem that consists of mainly bottlenecks in certain areas. Janice Haber, VP systems engineering and market development, says: "OFS agrees there is overcapacity in long-haul routes, but there are bottlenecks in the metro and campus areas. There's a strong demand for 10 and 40Gbit/s Ethernet. But to make that economical, new fibre is required, there's a need for 10Gbit/s multimode fibre for the first time and OFS has it."
Haber adds: "As for metro, the challenge is justifying the cost of DWDM, which demands too many expensive active components. Therefore Coarse WDM is being considered to offer bandwidth increases with lower specs and cheaper gear.
"The only problem here is that CWDM needs the whole spectrum available to maximise channel count, and today's fibre cannot do that. So there is a market for a new fibre that gives CWDM a chance to take hold in metro networks."
Haber says OFS has one solution to help get round this problem in the form of its AllWave fibre. Water peak in CWDM blocks the 1400nm window in the middle of the spectrum, limiting channel count to 12. But AllWave is a zero-water-peak fibre that opens up the 1400nm window, allowing for a channel count of 16 and an increase bandwidth using CWDM.
As far as lit fibre is concerned, Malcolm Hay, European marketing manager for Intel's optical division, says the industry has to face up to a lack of capacity in the metro area, where there are still bottlenecks at the same as time traffic is growing quickly (as a result of broadband technologies, for example). "Carriers should work to address the bottlenecks, as the reliability of the communications infrastructure is critical to business success. Any carrier who can't reliably handle the peak traffic load will quickly start to lose customers."
Hay adds that, because carriers are now facing economic problems, he sees little real growth for 40Gbit/s optical networking until after two to three years. He says there are also technical issues that 40Gbit/s optical networking has to overcome, including fibre dispersion and spacing between optical amplifiers and regenerators.
Mark Johnson, Tellabs director of the UK, Netherlands and Ireland, says of optical 40Gbit/s: "For too long the market was driven by the available technology, but now this has shifted and the market is being driven by services.
"The market is much more focused on the needs of the end-user now, and their problems are not in a lack of capacity in the backbone. Enterprise users need a cost-effective way to access the bandwidth glut." One major solution, says Johnson, is Ethernet services over SDH, at minimal cost to service providers which already have an SDH network, and at minimal cost to the customer running an Ethernet LAN.
Per O Andersson, Ericsson director of business development, transmission and transport networks, says that there is no fibre glut if you consider the amount of fibre network "holes" beyond European cities.
While dark fibre suppliers find it financially difficult to justify to fill these holes, the carriers don't see enough data traffic in these areas even if they were filled up, says Andersson. He also points out that there is a glut in optical fibre equipment as a result of recent carrier bankruptcies, and that the carriers won't buy this up unless they can be persuaded to expand their existing networks to places outside the major cities.
The break-up of various troubled companies also means that some dark fibre will never be lit for the foreseeable future. Because of this, Matthew Finnie, senior vice president of market development at carrier Interoute, disputes whether there is a fibre glut. He says: "The notion of a glut pre-supposes that all the fibre that has been put in the ground can be lit.
"The recent disintegration of pan-European network suppliers has meant that a lot of that infrastructure has been broken up, lost, or simply left where it is, as islands, as the various asset companies are sold off independently."
"Secondly", says Finnie, "even the fibre that is there needs to be managed to meet a competitive service level agreement, which is very expensive to do."
Thomas Zedendhal, head of business intelligence at Telia International Carrier, said that the industry should not forget the build-out opportunities that still exist in eastern Europe.
As for bottlenecks generally, he said there were no real problems in the long-haul market, but on the local loop side there are problems. "In this area you are not likely to work with redundancy and set up diversified routing to the same extent that carriers have done in the long haul.
"The key importance for carriers today is to fill the network to get economies of scale, thus keeping down investments. So the answer is to address average use as part of a revenue strategy and solve the bottlenecks at an affordable level."
There may be plenty of fibre already in the ground, but the message from the industry seems to be that it's not so important how much you have, but how you use it.
LWE Contributing Editor,
and Networks and Telecoms writer
Antony Savvas is a freelance networks & telecoms writer. Email: firstname.lastname@example.org