Wavelength services—fast, flexible, fat pipes that provide carriers with the same level of control as their own facilities without the associated capital costs and risks—will change the wholesale network services market, claims a new report from the Yankee Group (Boston). The number of multicity networks provisioned by new long-haul entrants that want to avoid the expense of building their own national networks will continue to increase.
Retail demand is also on the rise, thanks to the growing number of enterprise customers that outsource their optical-networking requirements and purchase lambdas instead of dark fiber. That said, carriers must make these wavelengths easy to buy, integrate, and use for retail customers, which typically lack the in-house expertise to run a network. Bundled-service packages and integrated metro-backbone wavelengths will be key drivers of retail growth."The U.S. wavelength market will enjoy continued expansion, but as with any new service, we expect growing pains," admits Nicholas Maynard, Yankee Group senior analyst, telecommunications strategies. "Carriers will find it difficult to sell wavelengths until customers clearly understand the advantages and ROI [return on investment] they will receive from choosing this service."
Customers will delay network expansions, and while this delay will not hurt the prospects for wavelength services over the next three to five years, it will limit their uptake over the next 12-18 months. "In the short term," cautions Maynard, "carriers need to deploy their wavelength services carefully to avoid overcapacity."
For more details on "Wavelength Services Gaining Traction Despite Growing Pains," call 617-880-0214 or visit www.yankeegroup.com.