Ready for prime time: Technology advances bolster the business case for metro wavelength services

By GWEN AVERY, Meriton Networks

Wavelengths delivering unprecedented bandwidth at low cost were envisioned as services from the inception of WDM systems. But since the introduction of wavelength services four years ago, service providers report little uptake, especially among metro customers. Analysts report similar findings. Communications Industry Researchers (CIR, Charlottesville, VA) estimates less than 300 U.S. customers subscribed to wavelength services in 2002.

While not yet a service for the masses, wavelengths still represent an important revenue source. In 2002, wavelengths accounted for 18%, or about $298 million of the total revenues generated by optical bandwidth services in the United States--second to OC-n services (64.5% or $1.061 billion), and well ahead of Ethernet (10.3% or $171 million), according to CIR.

This low volume, high margin service may start to move into the mainstream as advances in wavelength networking equipment begin to penetrate the market. New technology has solved many of the historic challenges associated with deploying wavelength services, providing a new platform of opportunity for service providers.

In the past, service providers generally rolled out dedicated networks for wavelength services. Each deployment was a special build, requiring dedicated equipment including fiber. As a result, service providers can't leverage any economies of scale from these builds, which are time consuming to deploy and add to fiber exhaust.

In contrast to dedicated infrastructures, shared networks offer numerous benefits. Adding a small number of wavelength customers on a shared service network drives CapEx savings well beyond the 50% level. Further, adding a service onto an existing infrastructure means that the service can be turned up quicker, accelerating the time to revenue. New services can be brought to market with healthy margins, and scaled to meet increasing customer demand.

Overcoming engineering challenges
One major issue with deploying a wavelength infrastructure is the engineering difficulties associated with these networks. With ring-centric optical add/drop multiplexers (OADMs), any network changes can present challenges. Even a simple task like adding a wavelength to the network can mean customer outages and expensive labor costs. A U.S. southeastern carrier found that adding a wavelength required a minimum of $100,000 in labor alone because trucks needed to go to every central office for installation and power re-balancing of the entire network.

Technology advances in network elements make it easier to engineer wavelength networks today. OADMs have evolved to incorporate switching capabilities within a single, compact footprint. These new systems, called optical add/drop switches or OADXs, support ring, mesh, and point-to-point topologies, and simplify the engineering required.

Simplification is achieved through a combination of features such as wavelength translation and 3R signal improvement. By re-generating the signal at each node, balancing the power of the OADX network is handled automatically. Wavelength translation enables end-to-end provisioning of lightpaths. It also allows a mix-and-match of CWDM and DWDM on the same system¿delivering greater flexibility and eliminating stranded wavelengths. Service providers can add wavelengths to only those spans requiring more capacity¿not the entire network.

Another early criticism of wavelength networks is their lack of visibility. Service providers are accustomed to SONET statistics that ensure that service-level agreements (SLAs) are met. And more and more, end customers want visibility into the performance of their networks. Traditionally, wavelengths provided little in the way of monitoring statistics, making it impossible to offer SLAs for wavelengths.

Performance monitoring is part of the enhanced network management capabilities now available for wavelengths with emerging technology such as OADXs. Statistics such as bit error rates and severely errored seconds are reported at regular intervals. With these advances in network management, service providers can transform their transport-centric infrastructure into a service-centric offering.

Room for other services
Given that wavelengths on shared networks are less expensive to deploy than other high-speed services, it makes sense to use a wavelength infrastructure to support leased line OC-n or Gigabit Ethernet services. With the lower costs and OpEx savings, service providers can realize improved margins with wavelength services.

Service providers also have the opportunity to use a wavelength infrastructure to deploy new services. One example is high definition television production, which requires large bandwidth to transmit studio-quality signals, predominantly in metro regions. Another premium service made possible with wavelength networking is customer-managed networks. By using partitioning, service providers can make portions of their wavelength network available for the exclusive use of individual customers. Through a secure customer network management capability, customers can set-up, tear down, and monitor their wavelength services, without intervention from the service provider. This "bandwidth-on-demand" has been the holy grail of the industry for several years, and it is getting closer to becoming reality. Customer-managed networks also enable shorter duration contracts, which present an opportunity for revenue maximization schemes.

Today, there is a new inflection point for wavelengths. Given the economic advantages and flexibility that wavelengths offer, it is logical to conclude that these services may soon move into the mainstream. New wavelength networking systems remove some of the obstacles associated with wavelength networks of the past. Because of their flexibility, wavelengths can deliver many high-speed services at lower costs. The result is that service providers will be able to expand their service offering, while at the same time, improving their margins on existing services.