Network of the Future - with Equipment Forecasts

North American telecommunications network forecast

The purpose of this report is to forecast the future (2016-2021) of the North American telecommunications network, and from that forecast to identify the major equipment needs to fulfill that forecast. There has been a great deal of turmoil in the area of telecommunications, much of it leading to spectacular changes and advances. Turmoil has been created by technological changes, by regulatory changes, by the development of new products and applications, by the introductions of new, or new flavors, of services, and by the entry of non-traditional competitors.

Because of this turmoil, consumers have much greater capabilities in the broad area of telecommunications than ever before. The reality has passed the fantasy in many ways: cell phones are more capable than Dick Tracys wrist radio, and more capable than Flash Gordons communicator.

Even though there is a great deal of turmoil and uncertainty, forecasting is very important, because as a great philosopher once said;

"Without a forecast, there can be no planning. Without planning, there can only be chaos."

This report will use the technique of asking the experts for their view of the future and then distilling from that input (some of which will be contradictory) a consistent, unified, organized view of the next five years of telecommunications in North America.

The first chapter will describe the survey that was used to "ask the experts." After that, the reader will be presented with several of the raw answers for the responders to the survey. It is intended to give the reader a first hand view of some of the material in the responders' words. Following the raw answers sample, the author will provide a summary and analysis of the answers and then the resulting forecast for the future of the network.

Finally, this general forecast will be used to provide specific equipment forecasts for this period. This will be accomplished by combining the Forecast of the Future Network that we have constructed with the Survey, with information about forecast of traffic demand and likely investment (supply). The report will thus produce detailed forecasts for the major types of equipment used in optical networks. A description of the makeup and function of each type of equipment will precede the forecast.

At the end of the report, a listing of major vendors that provide this equipment is provided a swell as Appendixes to assist in understanding traffic concepts.

TABLE OF CONTENTS

NETWORK OF THE FUTURE - WITH EQUIPMENT FORECASTS

TABLE OF FIGURES

THE LIGHTWAVE NETWORK SERIES OF REPORTS

• The Lightwave Network
• The Lightwave Series of Reports
• General Reports on the Network
• General Market Reports
• Specific Systems Reports

NETWORK OF THE FUTURE - WITH EQUIPMENT FORECASTS

INTRODUCTION

THE SURVEY

SURVEY SAMPLE RAW RESULTS

View of Future Network 2016-2021- Base Case

• Base Case
• Network
• Industry

• Response 1
• Response 2
• Response 3
• Response 4
• Response 5
• Response 6
• Response 7
• Response 8

SURVEY SUMMARY AND ANALYSIS

ANALYSIS

• General
• Access Network
• Transport Network
• Applications

FORECAST FOR NETWORK OF THE FUTURE

General

• The continuing forces of disruption

Access

• Access Network - Wired
• The wired network will tend toward fiber
• Access Network - Cellular
• The cellular network will be forced to deploy 5G in some areas.

Transport

• Transport facilities will become virtually all fiber

Applications

• The Application area will see the most growth

EQUIPMENT FORECAST

TRAFFIC - THE OPTICAL NETWORK DEMAND

Major Traffic Sources

Four Major Sources of Traffic

• AAA Access Lines
• Mobile Devices
• International Traffic
• H-S Access Lines

Demand Growth - Summary

INVESTMENT - THE NETWORK SUPPLY

Carriers Investments

SUPPLY - CAPITAL INVESTMENT BY THE RBOCS

• Importance of Wireline

RBOC Investment Plans and Forecast

AT&T Investment Plans and Forecast

Verizon Investment Plans and Forecast

• Loss of Main Lines
• Summary Thoughts on Investment

EQUIPMENT DESCRIPTIONS AND FORECASTS

ROADM Description

Types of ROADMs

• First Generation ROADM - PLC-Based ROADMs
  • Colorless vs. Colored Ports
  • Other Names
  • Benefits and Problems with PLC ROADMs
• The Second-Generation ROADM - Blocker-Based ROADMs
  • Other Names
  • Alternative Designs for Blockers
  • Problems with Blocker-based ROADMs
• Third-Generation ROADM - Wavelength Selective Switch (WSS)
  • Other Names
  • Problems and Benefits of WSS ROADMs
• Fourth-Generation ROADMS - Edge ROADM (ER)

Summary of ROADM Features by Utilization

Summary of ROADM Types by Generation

Summary of ROADM Description

ROADM Forecast

ROADM Systems - US Forecast

• US Edge ROADMs
• US Market Forecast

World Market Forecast

DWDM

DWDM Description

• US Physical Components

METRO DWDM

What is Metro DWDM?

Types of DWDM - 40 and 100 Gbps Channels

DWDM Forecast

• North American Forecast
• World DWDM Forecast

Switches

• Switch Description

IP and Ethernet Switches

Switch Forecast

• North American Switch Forecast
• World Switch Forecast

ROUTERS

What is a Router?

Why Use Routers?

What is a Terabit Router?

• Traditional Router Technology

Traditional Router Applications

Router Forecast

• North American Forecast
• World Router Forecast

VENDORS

System Vendor Listing

• Adva Optical Networking
• Alcatel-Lucent
• Auxora, Inc.
• CALIENT Technologies
• Ciena
• Cisco
• ECI
• Ericsson
• Fujitsu
• Infinera
• Juniper
• Huawei Technologies
• Kingfisher International
• Mahi Networks (formerly Photuris) - Meriton - Now Xtera
• Marconi Corporation plc (Ericsson)
• Meriton Networks
• Movaz Networks (ADVA)
• Movaz NEC America Inc.
• Nistica
• Nokia Siemens (NSN)
• Nortel (Now dissolved)
• Performance Motion Devices
• Tellabs
• Tropic Networks (Alcatel-Lucent)
• ZTE

APPENDIX I, TRAFFIC STATISTICS RELATIONSHIPS

APPENDIX II, DATA TRAFFIC FUNDAMENTALS

Internet Traffic Calculations

• Bits and Bytes
• Transfer Rate
• Busy Hour Traffice
• Protocol Efficiencies
• Peaking

Table of Figures

FIGURE 1, LIGHTWAVE NETWORK
FIGURE 2, TRAFFIC FORECAST - AAA LINES
FIGURE 3, MOBILE TRAFFIC FORECAST
FIGURE 4, MOBILE - WIRELINE ACCESS
FIGURE 5, INTERNATIONAL TRAFFIC
FIGURE 6, DATA TRAFFIC FROM MAJOR SOURCES
FIGURE 7, COMPARISON OF FOUR MAJOR SOURCES TO TOTAL TRAFFIC
FIGURE 8: INTERNET GROWTH RATE - NEW FORECAST
FIGURE 9, SUMMARY POINTS ON DEMAND
FIGURE 10, SUPPLY DEMAND RELATIONSHIP
FIGURE 11, NETWORK SHOWING WIRELESS ACCESS
FIGURE 12, WIRELESS DATA FORECAST
FIGURE 13, AT&T CAPITAL INVESTMENT 2009-2014
FIGURE 14, VERIZON WIRELINE CAPITAL EXPENDITURES 2009-2014
FIGURE 15, VERIZON WIRELINE NEGATIVE GROWTH
FIGURE 16, VERIZON WIRELINE REVENUE NEGATIVE GROWTH
FIGURE 17, VERIZON REVENUE PER WIRELINE
FIGURE 18: ROADM GENERAL CONFIGURATION
FIGURE 19: PLC BASED ROADM
FIGURE 20: DETAILED 'BLOCKER' ROADM ARCHITECTURE
FIGURE 21: ALTERNATIVE M-Z DIODE-BASED BROADCAST ROADM
FIGURE 22: WSS STRUCTURE
FIGURE 23: WSS-BASED ROADM
FIGURE 24: WSS-BASED MULTI-DEGREE NODE INTERCONNECTION
FIGURE 25: TYPICAL BLOCKER ROADM
FIGURE 26: WSS ADDED TO BLOCKER
FIGURE 27: SUMMARY OF ROADM TYPES BY UTILIZATION
FIGURE 28: FOUR GENERATIONS OF ROADMS
FIGURE 29, ROADM SYSTEM UNIT FORECAST - US
FIGURE 30, US MARKET - CHANGE IN PREDOMINANT TYPE OF ROADM OVER TIME
FIGURE 31, US EDGE ROADMS SYSTEMS
FIGURE 32, PRICE FORECAST FOR ROADMS
FIGURE 33, ROADMS MARKET FORECAST - US
FIGURE 34, ROADM MARKET - US - BY TECHNOLOGY
FIGURE 35, WORLD ROADM SYSTEMS BY TYPE
FIGURE 36, WORLD ROADM MARKET
FIGURE 37, TYPICAL DWDM LAYOUT
FIGURE 38, METRO DWDM TYPICAL LAYOUT
FIGURE 39, METRO DWDM SYSTEM CHARACTERISTICS
FIGURE 40, NORTH AMERICAN DWM SYSTEM ENDS
FIGURE 41, NORTH AMERICAN DWDM MARKET
FIGURE 42, US DWDM FORECAST BY CHANNEL SPEED
FIGURE 43, DWDM - WORLD FORECAST - SYSTEM ENDS
FIGURE 44, DWDM WORLD MARKET FORECAST
FIGURE 45, DWDM WORLD FORECAST BY SPEED
FIGURE 46, NORTH AMERICAN SWITCH MARKET FORECAST
FIGURE 47, NORTH AMERICAN SWITCHES - UNITS FORECAST
FIGURE 48, WORLD SWITCH MARKET
FIGURE 49, WORLD SWITCHES - UNITS
FIGURE 50, ROUTER LAYOUT
FIGURE 51, ROUTER APPLICATIONS
FIGURE 52, NORTH AMERICAN ROUTERS - TOTAL - UNITS
FIGURE 53, NORTH AMERICAN ROUTERS TOTAL MARKET
FIGURE 54, NORTH AMERICAN ROUTER MARKET - BY TYPES
FIGURE 55, WORLD ROUTER FORECAST - UNITS
FIGURE 56, WORLD ROUTER MARKET - TOTAL
FIGURE 57, WORLD ROUTER MARKET - BY TYPES
FIGURE 58: TRAFFIC/SPEED RELATIONSHIPS
FIGURE 59: EXAMPLE OF VARIOUS TRAFFIC SIZES
FIGURE 60, MULTIPLES OF BYTE
FIGURE 61: NEW TRANSFER RATE FORECAST
FIGURE 62: SUMMARY OF CONCEPTS