Smart transceivers reduce capex/opex of network upgrades and new deployments

A new class of pluggable transceiver modules is attracting a lot of interest these days. Module suppliers call the new set of transceivers
"intelligent transceivers," "pluggable NIDs," "smart SFPs," or other eye-catching names. The new type of transceivers – let’s call it "smart transceivers" – combines an optical interface with various system functions in standard SFP format.


A new class of pluggable transceiver modules is attracting a lot of interest these days. Module suppliers call the new set of transceivers "intelligent transceivers," "pluggable NIDs," "smart SFPs," or other eye-catching names. The new type of transceivers – let’s call it "smart transceivers" – combines an optical interface with various system functions in standard SFP format.

Before the introduction of smart transceivers, these system functions were typically implemented on a service card in switching equipment or installed in a network in a small equipment box. Smart transceivers combine low power and zero rack space to deliver savings on operational and capital expenditures. These benefits create new deployment and upgrade scenarios for both network operators and equipment builders.

What are smart transceivers?

Standard pluggable transceivers only support optical to electrical conversion. These transceivers support many different protocols such as Ethernet, Optical Transport Network (OTN), PON, CPRI, SDI, video, and others, at bit rates from 100 Mbps up to 100 Gbps and higher. There are also special transceivers for copper-based Ethernet via RJ45. This wide variety of protocol and optical or electrical reach choices made pluggable transceivers a key component in today's optical network infrastructure. Most new network equipment support transceiver cages, and there are no other options than to use a pluggable transceiver to connect to the network in some systems.

In addition to the benefits of standard pluggable transceivers, smart transceivers feature such additional processing capabilities as protocol conversion, packet processing, traffic monitoring, or encapsulation. In fact, any processing function could be a candidate for integration in a pluggable module if it has two ports: one port towards the hosting system and the other port via the fiber interface towards the network. Protocol processing often requires some configuration or monitoring functions as well and this is indicated as the "management" function in the diagram below:

Smart transceiver with integrated processing and management.

Protocol processing and management can be implemented using an ASIC, programmable logic (FPGA), and/or CPU. A memory chip is added for configuration and parameter storage. Clearly, there is a challenge: The MSA standards for pluggable modules leave very little space and a small power budget for such additional circuitry.

Fortunately, the density and capabilities of the latest generation of CMOS integrated circuits have reached a level that enables integrating valuable and quite complex system functions inside the pluggable module. These functions include packet processing to provide a network interface device (NID), a PON network terminal (also known as a "GPON stick"), or a network probe to enable service assurance and monitoring. Protocol translations are also possible inside a transceiver, e.g., circuit emulation for TDM over packet, video conversion, PTP synchronization, or OTN and forward error correction (FEC).

Applications and benefits

Smart transceivers enable operators to reduce costs in access and edge networks. Typically, an operator installs an equipment box, reserves rack space, and provides a power connection to establish a demarcation or monitoring function. Integrating these functions into a pluggable module saves significant rack space. Furthermore, smart transceivers can be an effective tool for operators who want to reduce their carbon footprint because they have lower power consumption compared to equipment boxes.

Another benefit smart transceivers bring is reduction in installation and service turn-up time. Traditional equipment boxes require dedicated, trained personnel to deploy and configure. Smart transceivers are standard components and work as soon as they are inserted in an open port or replace a standard SFP module in a switch or router. Their plug-and-play capability does not require any special knowledge or training to enable. In addition, "equipment" delivery can be streamlined by using parcel shipping services instead of telco truck rolls.

Finally, the service reliability of smart transceivers is higher than that of regular equipment boxes. Their small size and lower power dissipation result in less network downtime and fewer repairs.

Application example: Smart service assurance with TWAMP protocol

Operations, administration, and maintenance (OAM) tools are essential for service turn-up and service-level assurance in mobile backhaul networks and business access services. There are several OAM tools, each focused on a specific network layer or that use dedicated monitoring concepts. Let's take a closer look at one popular OAM tool, the Two-Way Active Measurement Protocol (TWAMP).

TWAMP, defined in IETF RFC 5357, provides service providers the ability to monitor and troubleshoot IP networks using a standardized protocol. Specific test messages are exchanged between nodes on the network to derive key performance indicators such as availability of the service, frame loss ratio, delay, and jitter performance.

Having such a capability inside a transceiver module is a great enabler for network operators. There is no need to install extra equipment boxes in the network or upgrade service cards in the existing switch or router systems. The new protocol is supported inside the transceiver; by simply replacing the standard Ethernet optical module with a TWAMP smart transceiver the new functions become available.

Network operators should assure that smart transceivers are supported by a flexible management platform based on open and standard interfaces such as SNMP to allow straightforward integration of the new transceivers into their established EMS/NMS infrastructure. A management solution for smart transceivers must scale well to support large network deployments and must provide plug-and-play to expedite the roll-out of new capabilities.

Network equipment manufacturers also can appreciate the smart transceiver concept. They now have an alternative path to enhance their switching and routing products. Instead of allocating an R&D team to develop a service card for TWAMP, they can quickly integrate the smart transceiver with new functionality into their existing equipment portfolio.

Application example: Smart transceivers enable network migration

Over the last decade operators have built or acquired several networks in parallel, based on different generations of equipment and protocols. In the access one can find DS1/E1 deployments in parallel with copper DSL and fiber-based Ethernet. In the metro core SONET/SDH rings coexist with WDM combined with MPLS and/or IP nodes. This multitude of technologies is becoming an operational and logistical concern for operators.

Network operators are now looking to consolidate their networks to a single protocol technology, optimized for packet transport. In some cases, the older technology can simply be decommissioned and replaced by new equipment; but often legacy TDM services generate a solid revenue stream for the operator and need to be migrated to the new network.

One popular migration approach is to transport TDM signals via a packet network using circuit emulation or TDM over packet. SAToP is a well-known protocol to transport DS1/E1 or SONET/SDH signals across a packet network. Some equipment has native support for this protocol; in other cases, a system can be upgraded with a SAToP service card. Alternatively, one can install a dedicated equipment box to provide SAToP capability, but that requires rack space and an additional power connection.

A smart transceiver with TDM-over-packet capabilities enables operators to make a graceful transition from TDM to packet switched networks. Instead of adding new equipment, the operator can simply upgrade a switch or router by inserting a smart transceiver at both sides of the network. With proper configuration of a point-to-point connection on the packet network, the use of smart transceivers becomes a true plug-a-play option without any software or configuration effort.

Smart transceivers enable TDM-to-packet network migration.

The TDM-to-packet transceivers can be applied in several network migration scenarios:

  • Upgrade microwave links from TDM to Gigabit Ethernet packet radio
  • Enable efficient use of DWDM wavelengths with a smart transceiver on an Ethernet muxponder
  • Migration of a SONET/SDH access network to Ethernet.

The integration of TDM over packet in a smart transceiver greatly reduces system and network complexity and offers lower carbon footprint while generating capex and opex savings.


The key success factor for pluggable modules is that they offer flexible physical interface types and signaling rates, and a standardized MSA interface towards the hosting system. Smart transceivers are a revolutionary new class of pluggable modules that integrate intelligent and innovative system functions into a module.

Several flavors of smart transceivers are available today that enable network operators and equipment manufacturers to support service assurance probes or to simplify the network migration from TDM to packet. While the modules typically operate at 1 Gbps today, operators are already requesting smart transceiver capabilities at higher data rates as well. This will allow them to engineer and deploy smart transceivers on mobile backhaul networks and business access links independent of the required rate at 1 or 10 Gigabit Ethernet.

The first smart modules operating at 10 Gbps have already been demonstrated; it is expected that these high-bit-rate smart transceivers will reach production in 2015.

Jan Venema is chief technology officer at AimValley, responsible for the smart transceiver portfolio of AimValley and OE Solutions. He has over 20 years’ experience as systems engineer and consultant with international projects in telecom and datacom product development.

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