The essential aim of this study is to provide the telecom industry with an
unbiased and fair picture of the U.S. long-haul optical transport equipment
market. The overwhelming emphasis of this report will be on the feedback we
receive from the service provider community, especially in making our
assessments of the competitive positions of the suppliers. Rather than being
influenced by any dog-and-pony shows from any vendors, the actual buyers of
optical networking gear are in the best position to give CIR the most objective
feedback possible.
CIR prides itself on offering the most brutally honest appraisals of the
strengths and weaknesses of the manufacturers, as well as of the expected growth
rates in the market. In other words, we let the chips fall where they may,
unlike our competitors.
Another key purpose of this study is to help correct a lot of the
misinformation, hype, and wrong-headed perspectives in the market. Moreover, no
other report on the U.S. long-haul optical space is going to provide such a high
level of excruciatingly specific detail, particularly the hard-hitting
perspectives of the manufacturers by the carriers.
Additional important goals of the report include supplying the following 11
items to our customers:
- Detailed forecasts in units and dollars broken down as reasonably as
possible - by channel size, SONET rate, distance, band type, etc.
- Principal winning characteristics and game plans for suppliers to take
advantage of the opportunities and avoiding the market pitfalls.
- Extent to which bandwidth intelligence devices are eating into the SONET
ADM market.
- Likelihood of metro solutions penetrating the long-haul space.
- A refutation that there has been a bandwidth glut issue.
- Likely timing of OC-768 based on cost/technology hurdles and historical
trends.
- Impact of re-configurable OADMs in further enabling ultra-long haul DWDM
- Profiles on successful IXCs going after just regional positions of the
U.S.
- Effect of 9/11 on network protection /restoration philosophies
- An examination of whether the long-haul market is likely to remain a
commodity-based business.
- Extent to which consolidation of the IXCs will happen over the next
several years.
The main scope of the study is fairly restricted to new gear, as well as
additions to already installed equipment that provide optical transport and
adding/dropping of wavelengths/circuits for interexchange carriers in the U.S.
Therefore, the critical space studied will involve traffic between cities. Some
discussion will also surround an up-to-date evaluation of the optical switch
market (both O-E-O and O-O), with particular emphasis on the merging of DWDM
capabilities into these devices.
Other related matters that will be looked at within the boundaries of this
report include the following:
- Costs/pricing
- CapEx
- Drivers in bandwidth demand and capacity/utilization levels
- Network/traffic engineering evolution
- Growing need for EF&I and customer support at carriers
- Back-office development constraints at service providers
- Tradeoffs between distance and capacity
- Narrower channel spacing
- Wavelength services
- Fixed vs. dynamic OADMs
- Tunable lasers
- New fiber requirements and inclination to light up dark ones
- L and S bands
- Ultra long haul and transparency
- Pure Raman vs. Raman/EDFA hybrids
- Discrete vs. distributed Raman
- Intelligent amplifiers, SOAs, and other types of amps
- Ring vs. mesh architectures
- Provisioning times
- Network management
- Power/space
- Standards
- Relevance of Moore's Law
This report is based on primary research. Comprehensive, pain-staking
interviews were conducted with experts on long-haul optical networking
technologies and solutions at service providers. Also, CIR brought together
relevant information from web sites, white papers, product brochures, as well as
other documentation provided to CIR by the carriers and the suppliers.
Projections are based on CIR's appreciation of and intimacy with the historic
market trends in the optical networking industry. Our long-known contacts at the
service providers allow us to realistically determine growth trends as opposed
to relying on the hopeful wishes of the vendor community. In addition, we
heavily rely on our recent, extensive amount of work on the optical amplifier
market to develop our forecasts. Furthermore, in our market sizing, actual
prices, as best as CIR can determine them, are utilized. The impact of our
realistic outlook on future price declines on our projections is illustrated as
well.
The Executive Summary provides appraisals of the competitive positions of the
suppliers. Chapter Two addresses the evolution of long-haul optical networking,
as well as the important technology factors going forward. Chapters Three and
Four discuss the optical network and business strategies of both nationwide and
regional long-haul carriers, and offers insights from these service providers on
their impressions of the vendors. Chapter Five is devoted to five-year market
forecasts for DWDM, SONET, OADM, and optical switching systems.
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