This report is devoted to exploring the planning process devoted to telecommunications business transformation. The report will also forecast the likely results of those processes, taken collectively, in the development of a Next Generation Network. In general, business transformation planning has many outputs, and influences many (maybe all) processes in a business, but in telecommunications, business transformation planning must also involve, as one of its outputs, the development of a Next Generation Network, since the nature of the future network must reflect the new business plan. The history of the networking business is largely based on network evolution steps that were determined by the geniuses at Bell Labs. Another group of geniuses at the same institution determined end-user (station apparatus) capabilities. It has been said that there have been three network designs: the telegraph network, the telephone network, and the Internet network. Each had its particular end-user apparatus: the telegraph, the telephone, and the computer. As we have changed from each of these paradigms to the next, we have seen massive business transformations by the major players. Some made the transformation; they survived and prospered. Some did not and died. This report is about how to make those transformations and what network will be coming next — the Next Generation Network! Unlike in the past, the development of these future networks is based on customers’ needs and business vision, as opposed to technological possibilities and cost efficiencies. Now there are competitive networks to the business and the residence, and there are hundreds, maybe thousands, of companies devoted to the development of station apparatus to meet customers’ needs as they see them. Most of this station apparatus is not even called that; rather, it is called computers, DVRs, Wii, routers, over-the-top video, etc. Network evolution, now, is driven by the competitive desire of the multiple network providers to have networks that are capable of interfacing with this station apparatus. For telcos and all companies involved in the telecommunications business, this drastically changed environment requires that they change their businesses if they are to survive and prosper. These two ingredients (customers’ needs and business vision), along with an understanding of competitors’ positions, are the basis of planning for future networks today. The idea that “Customer Is King” will run throughout this report. It is also strongly reflected in the interviews.
We will review the techniques for transformation planning and some of the drivers in today’s market for that planning activity, as well as the resulting Next Generation Network and our forecast for the NGN.
- The description of the planning environment — A framework that outlines the steps in the planning process.
- The general forecast for the U.S. economy and particularly the U.S. telcos.
- The competitive market in the U.S. facing today’s telecommunications company, including discussions of major factors in the changing market such as advanced access architectures, supercompetitors, and overbuild.
- A detailed approach to Business Transformation Planning — a “how to.”
- A survey of what major players are doing in business transformation planning.
- Interviews with some of the top thinkers in the telecommunications business today.
- The changing face of the network — why it is changing and how.
- Our characterization of the NGN — Access, Speed, and Flexibility.
- Our forecast for the Next Generation Network architecture — Access, Transport, and Control.
- A description of the major technology groups in the NGN — with forecasts for their deployment.
- A listing of major vendors of NGN hardware and software.
- A major Appendix will describe the process of “Vision Planning” — a technique for transformation planning.
Table of Contents
Table of Contents
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
The Impact of Competitive Networks
Why Do We Change Networks?
Customer is King!
US Telecommunications Economic Forecast
General Economic Background
Telecom Economic Background
Possible Positives for Telecom in 2009
Telecommunications Capital Forecast
Telecommunications Economic Forecasts Summary
Telecommunications Economic Forecasts - 2009
Survey of Next Generation Network Activities by Major Players
BT (British Telecom) – “21CN’
Orange/FT (French Telecom)
Changing Face of the Network
Why Change Networks?
Cheaper to Grow
Need for More Capacity:
How the Network Is Changing
“Watson, Come Here – I Need your Cell Number!”
The Next Generation Network
NGN – Characterization
NGN - Architecture
NGN – Access
NGN – Transport
• Soft switches
• Metro DWDM
• OC-768 and SONET Advances
• “Big Iron”
NGN – Control
New Competitors vs. Super Competitors View of Control
Control Forecast – A Compromise
1. Direct Control
2. Common Control and the Intelligent Network
3. NGN Control
Summary of NGN Forecast
Economic Analysis for Various NGN Advanced Access Architectures
Comparison of Three Major Approaches
BellSouth's Fiber to the Curb (FTTC)
AT&T's Fiber to the node (FTTN)
Verizon’s FTTP (Fiber to the Premise)
Summary of Fiber Requirements
An Economic Model NGN - AAA Architectural Differences
Fiber Required for Each Architecture
Cost of Fiber Needed for Each Architecture
AT&T’s New Plans for BellSouth – A Hybrid FTTC/FTTN
The Technologies of the Next Generation Network
Advanced Access Architectures
NGPONs - Advanced Options - 10-GPON and WDM-PON
Vendors of WDM-PON
Other WDM-PON Activities
Vendors of WDM – Listing and Summary of Status
Achieving SONET-like Control in Optical Networks
A New ROADM
Evolution to the Edge
NGN Standards Activities
Comparison of ITU and IEFT NGN Views
Forecast for NGN Technologies
Advanced Access Architectures Forecast
Forecasts for Deployment
AAA Forecast Summary
Forecast Size of Deployments
Forecast of Homes Passed
Growth of AAA and Reduction in xDSL
Model for Forecast Core and Metro ROADMs
Assumptions of Model
Model for Forecast — Edge ROADMs
Systems — Forecast
US Edge ROADMs
US Market Forecast
Vendors for the NGN
Advanced Access Architecture Vendors
Acterna (acquired by JDSU)
Advanced Fibre Communications Inc. (AFCI) (Now Tellabs)
Amino Technologies plc
Avanex Corporation (now Oclaro)
Corrigent (now Orckit)
Entrisphere Inc. (Acquired by Ericsson)
Fiberxon (Now Source Photonics combined with Luminent)
FlexLight Networks (Defunct)
Genone3 Technologies Inc.
Hitachi Communication Technologies Ltd.
Humax USA Inc.
Kreatel Communications AB (Acquired by Motorola)
Novera Optics (owned by Nortel / LG JV)
O-Net Communications Ltd
Oplink Communications, Inc.
Optical Solutions (Acquired by Calix)
Osaki Electric Co. Ltd.
Passavé (Acquired by PMC-Sierra)
Quantum Bridge Communications (Acquired by Motorola)
Salira Optical Network Systems
Source Photonics (Combined with Fiberxon and Luminent)
Tandberg Ltd. (Ericsson)
Terawave (Acquired by Occam Networks)
Tut Systems (Acquired by Motorola)
Vinci Systems, Inc. (Acquired by Tellabs)
Worldwide Packets, Inc. (Acquired by Ciena)
ROADM System Vendors
System Vendor Listing
Adva Optical Networking
Mahi Networks (formerly Photuris) — Meriton (now Xtera)
Marconi Corporation plc (Ericsson)
Meriton Networks (now Xtera)
Movaz Networks (ADVA)
NEC America Inc.
Nokia Siemens (NSN)
Tropic Networks (Alcatel-Lucent)
Table of Figures
Figure 1, Lightwave Network
Figure 2, Telecommunication Capital Expenditures Actual and Forecast
Figure 3, Telecommunications Economic Forecasts
Figure 4, Historical Network
Figure 5, Recent Network
Figure 6, Near Future Network
Figure 7, NGN – Characterization
Figure 8, Next Generation Network
Figure 9, Transformation from Opaque to Transparent
Figure 10, Control Migration to Network Edge
Figure 11, BellSouth FTTC
Figure 12, AT&T Uverse (FTTN)
Figure 13, Verizon FiOS (FTTP)
Figure 14, Fibers Required per Year for Each Architecture
Figure 15, Amount of Fibers for the Architectures
Figure 16, Length of Fiber for the Architectures
Figure 17, Fiber Costs of the Three Architectures
Figure 18, Fiber Cost per customer - Each Architecture
Figure 19, AT&T - BellSouth Hybrid FTTC
Figure 20, Fiber Required Upgrading to Hybrid FTTC
Figure 21, Identified Technologies of the NGN
Figure 22, ROADMs to the Network Edge
Figure 23, Differences between ITU and IEFT NGN Views
Figure 24: Forecast Homes Passed Cumulative — All Technologies
Figure 25: Forecast Homes Passed Annually — By Company — All
Figure 26: FTTX vs. High-speed Accesses vs. US Households
Figure 27, AAA Growth vs. Legacy XDSL
Figure 28: ROADM System Unit Forecast — US
Figure 29: US Market — Change in Predominant Type of ROADM
Figure 30: US Edge ROADMs Systems
Figure 31: ROADMs Market Forecast — US
Figure 32: OADM vs. ROADM Market — US