Video Drives Burgeoning Optical Market


BTR_Feature_Art_Optics_1-27-14 The cable industry is one of the major buyers of optical transport network equipment. The sector - led by dense wavelength division multiplexing (DWDM) gear - is expected to reach $15 billion by 2018, according to a new report from the Dell'Oro Group.

The explosion of video makes it no surprise that the market for this gear is growing. Jimmy Yu, Dell'Oro's vice president of optical transport market research, said the focus is shifting slightly from core to metro implementations. This shift is accompanied by a new de facto speed requirement: 100 Gbps.

The sources of demand are pretty clearly laid out at this point: Video delivery - both of operators' own content and exploding over-the-top (OTT) services such as Netflix - constantly pushes service providers to add more capacity. Cable operators also continue building their commercial services arms and are finding increasing paydays in providing cellular backhaul services to wireless operators.

North American cable operators are front and center in that growth, which essentially has seen the entire telecommunications industry evolve to a higher capacity level. "Going forward, MSOs will continue to [deploy 100 Gbps gear]. 100 Gigabit is the new 10 Gigabit."

Kevin Fitzgerald, the vice president of sales forFujitsu (FJTSY: OTCMKTS), agrees that the industry has settled on the faster technology. "The industry - especially the four or five top operators - have changed how they are doing it," he said. "They were growing their networks in wavelengths of 10 gigabits; now they almost exclusively are adding it in hundreds of gigabits."

While Yu characterizes the overall growth of the market as good, he said the real star of the increase is in DWDM gear. Indeed, Yu said, sales in that sector - in which data streams are squeezed closer and closer together in a given amount of spectrum - is more than compensating for declining sales of equipment in support of legacy SONET and SDH platforms. In addition to DWDM, Yu said, sales are healthy in aggregation equipment, multiservice multiplexers and optical switches.

Cable operators, Yu said, are in position to be slightly more aggressive than the telcos because they don't have to support the older technologies. "[Cable companies] can move quicker," Yu said. "They have moved away from legacy a lot faster than the telco market and didn't have to support the legacy services. The majority of their purchasing is in DWDM."

Throwing bandwidth at the challenge is one part of an overall solution. A second element is using the bandwidth that is available more efficiently. In late October last year, Ciena (NASDAQ:CIEN) issued a press release with the news that it and Comcast had completed a successful field trial of a 1 Terabit per second (Tbps) link of almost 1,000 kilometers. The trial connected Ashburn, VA, and Charlotte, NC, over the operator's existing network.

Barry Zipp, the industry marketing director for Ciena's cable practice, said the spectral efficiency of the link was increased by a factor of 2.5 - from 400 Gbps to 1 Tbps - by a combination of advanced DWDM equipment and packing more data onto each wavelength. That was accomplished, Zipp said, by using 16-QAM (quadrature amplitude modulation), a more aggressive modulation technique.

Much of the drama of the next year will involve efforts to effectively use high order modulation techniques - without paying the piper too high a price. "Most of the 100 G deployments today are polarization multiplexed QPSK," said Gaylord Hart, the director of CATV marketing for Infinera (NASDAQ:INFN). "As you move to higher order modulation techniques above that, you transport more bits, but there is a trade off for distance. As you go to a higher order, the signal is more sensitive to impairment noise, PMD and other things. As it becomes more sensitive, the distance before regeneration [optical-to-electrical conversions] is necessary becomes less."

The payoff is handsome, however. In a typical current deployment, Hart said, as many as 160 10 Gbps waves are transmitted. The spacing between wavelengths is 25 GHz. Thus, the total data being transported can be as much as 1.6 Tbps. In emerging 100 Gbps scenarios, the spacing between the waves is doubled to 50 GHz, which halves the number of waves to 80. However, the increase of the data capacity of each wave by a factor of 10 means that the total throughput is 8 Tbps, a five-fold increase.

DWDM, Zipp said, is a significant tool in operators' tool chests. "We are seeing all of the MSOs utilizing DWDM to add capacity so that they don't have to add higher bit rate line cards or install more fiber," Zipp said.

Carl Weinschenk is the Senior Editor of Broadband Technology Report. Contact him at

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