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Optical networking yet to see the light of day
By Bhavish Sood

The demand for bandwidth is driving the growth of the optical networking industry. But carriers are not upgrading their backbones fast enough and prefer to wait for 3G networks to roll out. However technologies like DWDM, VSR and FSO present great potential for the future of optical networking

Technologies like DWDM, VSR and FSO which contain many channels, and therefore, much more capacity, present great potential for the future of optical networking

The problems that compound the optical networking industry are the same with any hot new technology: too many standards, too many vendors and too much innovation. In the field of optics too, companies have brought out too many products and technologies that are commercially not sellable or viable. Meanwhile the demand for bandwidth increases due to the availability of rich media content and the increase in users getting hooked to the Internet everyday.

With the emergence of fibre optics as a way to meet today's bandwidth demands, it is obvious that fibre lines are not being installed fast enough to keep pace with demand. Innovative technologies such as free-space optics are being adopted as a reliable and affordable way to connect to fibre infrastructure, avoiding costly and lengthy delays as bandwidth demand continues to outstrip access. The principal reason that drives revenues in the optical industry is the demand for bandwidth, which will result in demand for optical equipment including fibre, routers and consulting services among others.

Optical networking refers to communications between computers, telephones and other electronic devices using light. An optic fibre is a thin glass strand designed for light transmission. A single hair-thin fibre is theoretically capable of supporting 100 trillion bits per second. Fibres can carry signals over longer

distances without the use of repeaters to boost fading signals. Fibres are more secure, because taps in the line can be detected, and lastly, fibre installation is streamlined due to the lower weight and smaller size of the material compared to copper cables. Hence optical networking is a far superior technology, but how is it being accepted in the industry?

Trends
Carriers which invested enormously in technologies like VoIP will take a wait and watch approach, at least until 3G networks are rolled out. But in the enterprise space, especially in the financial services domain, this technology could be implemented on a large scale. In the SOHO segment emergence of Free Space Optics could change the economics of investing in fibre.

Here are five key trends that will decide the fate of the optical network industry:

Protocols and backbones: There's one standard when it comes to the world's optical transmission backbones: Synchronous Digital Hierarchy (SDH). Since these networks also feel the bandwidth pinch newer multiplexing technologies like TDM (Time Division Multiplexing), DWDM (Dense Wave Division Multiplexing) etc will come to their rescue. Emergence of techniques like DWDM systems, which contain many more channels, and therefore, much more bandwidth capacity will drive the adopting factors by telcos.

Routers and Equipment Manufacturers: A lot also depends on the strategy adopted by the companies that enable these networks. The world of optical space is dominated by the likes of Cerent, Siara Systems, Nortel, Cisco, and Lucent, among others. In this high growth sector the success factor is determined by two types of companies those like Inara Networks (which is building products for telecom carriers to extend their existing investments in legacy synchronous optical networks (SONET's) by extending their bandwidth), and secondly companies which are betting on technologies based on the multiplexing principle Dense Wave Division Multiplexing (DWDM) or Time Division Multiplexing (TDM).

Metro optical space: Unlike the last mile issue with access technologies like broadband in the optical space, the issue is more of how the distribution takes place. In the case of optical networks it's not the ownership of the last mile that matters but how the signal will be delivered. The MAN (metropolitan area network) typically is a collection of fibre optic rings that surround a city. Once inside a city or territory optical signals are converted into a stream of electrons that are routed to customers through a series of switches, cables, wires and boxes. In this arena carriers deploying technologies like optical DWDM could have a bright future. Industry research predicts that the growth of the DWDM market will leap from $800 million in 2000 to $7.1 billion in four years. This is a potentially lucrative opportunity since it calls for deployment of optical networks at the edge of carrier backbones.

Emergence of VSR Technology: Very Short Range Technology or better known as VSR promises to perform the same high-speed deployment of 10 Gbps links to the Internet while lowering overall connectivity costs. The only possible advantage with this technology is that it's a total sell as long as the cost reduction model works, otherwise it has no distinct technological advantage.

Free space optics: Free Space Optics (FSO), an emerging technology that transports data from point-to-point and multipoint via laser technology, will grow from its current nascent state to a strong niche player in the next five years, says a new study by The Strategis Group. Unlike the radio wave carriers, which require spectrum licenses, FSO connects urban surroundings at a cheap cost over the air without cable. The availability of free space optics to provide a large data pipe is also attractive to LMDS, MMDS and 3G system owners who need to connect their base stations with one another or with the public telecommunications system.

The Road Ahead
Over the last few years or so, fibre optic lines have taken over and transformed the telecom industry especially the local telecom carrier (our local phone operator). Optical fibres play an important role in making the Internet available around the world. When fibre replaces copper for long-distance calls and Internet traffic, it dramatically lowers costs. But the crucial issue remains whether telcos have the requisite money to make those expensive migrations. As always technology developments and market forces have a played a big hand in the growth and maturity of this segment, but the carrier will not invest in the upgradation until the arrival of 3G Networks, largely due to increased competition and lower demand. Since network operators and carriers spent billions building 2.5 Gbps networks and then investing further to upgrade those networks to 10 Gbps, it may be assumed that they would rush out and buy 40 Gbps equipment as well. But today they have tightened their purse strings due to less capital availability. Scalable technologies like optical DWDM, and not variants of legacy equipment, might be the only ones that see the light of the day (or put the laser light at the end of the glass).

The author is with Plexus Technologies. Write to him at bhavishsood@netscape.net

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