Action creeps out to the edge
Anyone attending last month's Lightspeed Conference and Exhibition expecting coverage of high-speed optical transport would have been disappointed. This reflects changes in the market over the last two years: big-bandwidth solutions are on the back burner, and the focus has shifted to edge/access networks, service delivery and applications.
Not that high-bandwidth solutions and discussions were absent. Although the long-haul optical transport market seems to have stalled, Internet traffic continues to grow 85–100% per year, 200–300% for some operators according to Terabit router company Avici. However, the emphasis is to squeeze more out of existing 10Gbit/s DWDM systems rather than install 40Gbit/s systems. Aggressive price reductions in 10G transmission are making it harder for 40G to gain traction. The best prospects for 40G seem to be short-haul metro and interconnects, since build-outs in the core will surely have to wait until 2004/2005.
By that time a new entrant, 10Gigabit Ethernet (10GbE), could have radically changed expectations on core transport costs. At least two vendors, Infineon and Finisar, were exhibiting 10GbE transceivers in hot-swappable MSA standard packages, and the goal is to offer modules with a transmission range of 10km, or even 40km, for EUR1000 or less in one year to 18 months. Dell 'Oro forecasts that port shipments will multiply tenfold in the next three years. Technology like this, coupled with optical add drop multiplexers (OADMs) like the Infinity MTS-2 shown on the Siemens booth, hold the key to low-cost bandwidth needed to satisfy the broadband ambitions of service providers.
Mick Reeve, CTO of BTexact, described BT's five-year network strategy. The company plans to reduce total cost of ownership by 30% through greater use of optical transport and switches (eliminating regeneration) and by concentrating electronics in fewer larger hubs. The foundation of this business plan is to expand the penetration of broadband subscribers from today's 0.5Mbit/s to over 5Mbit/s, with the upside including a lot of video-on-demand. This would increase network traffic by a factor of ten to several Terabits.
BT wants to increase the value of broadband traffic by pricing based on content and applications. This calls for more sophisticated edge equipment that speeds up deployment and improves bandwidth efficiency. Richard Webb of Infonetics identified several high-growth markets, all metro/edge applications. Metro equipment is forecast to grow from USD3.1bn in 2002 to USD12.8bn in 2005.
Developing the edge/metro network to deliver new services such as IP-VPNs, storage services, IP telephony, consumer services like video and gaming, as well as wireless data (3G and 802.11x) was the main focus of the conference sessions and exhibition. Ethernet seems to be everywhere. As it spreads from the enterprise mass market to the wide-area network, it brings with it enormous economies of scale.
Neos Networks and 51degrees, two London-based operators powered by Riverstone and Cisco Ethernet switches, are pushing the advantages of Ethernet — low costs, short provisioning times and native interfaces. Metro and Ethernet sessions attracted the largest audiences and created the hottest debates as to whether Quality of Service could be delivered without the SDH layer and connection-oriented provisioning. The Ethernet protagonists believe it can by using Multi-Protocol Label Switching.
SDH is fighting back in the metro with a new generation of equipment offering 30–50% reduction in costs and much greater flexibility for handling data, notably Ethernet, by using Generic Framing Procedure and Virtual Concatenation. Some vendors are also offering Layer 2 Ethernet switch blades and DWDM to enhance the products, and there were plenty on show from Nortel, Lightscape, Sorrento, Tellabs, Siemens and Turin, among others. New small-geometry integrated circuits with up to 100 million transistors from chip makers like PMC-Sierra, Intel and West Bay combine multiple SDH functions to a single Application Specific Standard Product.
The same technology is helping the design of multi-service edge routers. These have very high port density and need to manage and bill thousands of logical connections and individual sessions — the ingredient of BT's strategy for profitable broadband services. A task that seemed unscalable and uneconomic a few years ago is now feasible with new network processor chips, and companies like Laurel Networks are attracting a rare commodity: venture capital.
The action in the telecoms industry has definitely moved to the edge as service providers focus on bandwidth bottle-necks and making data pay through differentiated service. This is the new frontier in the telecom market which, in turn, will drive demand for core network development in a couple of years.
Hugh Walker at Tighvonie Telecom has more than 30 year's experience in telecommunications. A detailed report on Lightspeed is available from his website www.tighvonie.com. Tel: +44-1383-735854