Riding the Lightwave Down and Back Up
An Analysis of What Went Wrong, and a Forecast for the Next Boom

Introduction
There have been a great many negative impacts on the telecommunications market in the last few months (last of 2000, first six-seven months of 2001) and these negatives clearly have had an impact on the growth of markets in all of the areas of the Lightwave Network. While there is no doubt in the author’s mind of the underlying demand for high-speed accesses, and thus ultimately, for the growth of the Internet and the Lightwave Network, there are certainly questions as to when this growth will continue. The previously published material in past Lightwave reports was the author’s best estimate of these markets at the time of publication of the various reports. However due to the above mentioned negative impacts, it is now necessary to provide revised forecasts.
This report is intended to provide an analysis of the negative impacts, an evaluation as to how and when these impacts are going to turn positive, and a series of revised forecasts for each of the nine sectors of the Lightwave network. (These revised forecasts will also include any changes in the market particular to each segment that may have transpired since the previous forecasts.) To assist in this evaluation a discussion of the components and rationale for the network taxonomy will also be presented.

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Table of Contents

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THE LIGHTWAVE NETWORK SERIES OF REPORTS

INTRODUCTION

ADVERSE FACTORS IN THE CURRENT MARKET

• Over-Supply
  

FORECASTS FOR INTERNET DRIVERS

• Thirst for Broadband Access
  
  • What about 2001?
    
• High Speed Access Forecast
  
  • xDSL Forecasts
    
  • Cable Modem Forecasts
    
  • Radio-Based High-Speed Line Forecasts
    
  • Fixed Wireless
    
  • Satellite-Based Service
    
  • Total High-Speed Residential Line Forecast
    
• "Up Network" Traffic Implications of High-Speed Accesses
  
  • Other Internet Traffic Sources
    
  • VoIP – Voice over IP
    
  • B2B – Business-to-Business Traffic
    
  • Offshore IP Growth
    
  • Summary of Other Internet Traffic Sources
    
• Internet Traffic Forecasts
  
  • Forecast for High-Speed Accesses
    
  • Transfer Rate
    
  • Busy Hour Traffic
    
  • Peaking
    
  • Forecast for Internet Total Traffic
    

IMPACT OF OVER-SUPPLY

• The Good News
  
• The Next Boom
  

REVISED MARKET FORECASTS

• Long-Haul Rings
  
  • Previous Forecast – DWDM
    
  • Revised Forecast – DWDM
    
• Metro Networks
  
  • Previous and Current Forecast – M-DWDM
    
• Metro Access Networks
  
  • Previous Forecast – Metro Access Networks
    
  • Revised Forecast – Metro Access Networks
    
• Wavelength Routers & Optical Switches
  
  • Previous Forecast – OXCs
    
  • Revised Forecast – OXCs
    
• Terabit Routers & Gigabit Switchers
  
  • Previous Forecast – Terabit Routers
    
  • Revised Forecast – Terabit Router
    
• Aggregation Devices
  
  • Previous Forecast – Aggregation Devices
    
  • Revised Forecast – Aggregators
    
• Enterprise Access Systems
  
  • Previous Forecast – Enterprise Access Systems
    
  • Revised Forecast – Enterprise Access Systems
    
• Residential Access Systems
  
  • Previous Forecast – Residential Access Systems
    
  • Revised Forecast – Residential Access Systems
    
• Video Access Equipment
  
  • Previous and Current Forecast – Video Access Equipment
    
  • Revised Forecasts – Summary
    

APPENDIX I – THE LIGHTWAVE NETWORK

• Lightwave Network - Operational Description
  
  • Transport Network
    
  • Interconnect Network
    
  • Access Network
    
  • Lightwave Network - Major Unit Description
    
  • Long-Haul Rings
    
  • Metro Networks
    
  • Metro Access Networks
    
  • Wavelength Routers & Optical Switches
    
  • Terabit Routers & Gigabit Switchers
    
  • Aggregation Devices
    
  • Enterprise Access Systems
    
  • Residential Access Systems
    
  • Video Access Equipment
    

APPENDIX II – MATRIX OF PROVIDERS

APPENDIX III – LISTING OF ACRONYMS

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Table of Figures

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• Figure 1, SBC xDSL Gain in 2000
  
• Figure 2, xDSL In-Service End of 2000, Selected Companies
  
• Figure 3, 2001 xDSL Results
  
• Figure 4, xDSL Forecast – US
  
• Figure 5, Cable Modem Forecast
  
• Figure 6, Fixed Wireless Forecast – US Subscribers
  
• Figure 7, Satellite High-Speed Access - US Subscribers
  
• Figure 8, Comparison of xDSL and Cable Modem Forecasts
  
• Figure 9, Total High-Speed Access Lines – By Type
  
• Figure 10, Total High-Speed Access Lines
  
• Figure 11, High-Speed Accesses vs. Household Growth
  
• Figure 12, "Up-Network" Impact of Residential Demand
  
• Figure 13, Business VoIP Growth
  
• Figure 14, B2B Value Projections
  
• Figure 15, Transatlantic Traffic
  
• Figure 16, Total High-Speed Access Lines
  
• Figure 17, Transfer Rate Forecast
  
• Figure 18, Internet Traffic Projection
  
• Figure 19, D and F Chart for ADSL
  
• Figure 20, ADLS D & F, Over-Supply
  
• Figure 21, ADSL D & F, The Next Boom
  
• Figure 22, Scenario for the Next Boom
  
• Figure 23, Previous DWDM Forecast
  
• Figure 24, Revised DWDM Forecast
  
• Figure 25, M-DWDM Forecast
  
• Figure 26, Previous Forecast - Metro Access Networks
  
• Figure 27, Revised Forecast - Metro Access Networks
  
• Figure 28, Previous Forecast for OXCs
  
• Figure 29, Revised Forecast for OXCs
  
• Figure 30, Previous Forecast for Terabit Routers
  
• Figure 31, Revised Terabit Router Forecast
  
• Figure 32, Previous Forecast - Aggregators
  
• Figure 33, Revised Forecast – Aggregators
  
• Figure 34, Previous Forecast - Enterprise Access
  
• Figure 35, Revised Forecast - Enterprise Access Systems
  
• Figure 36, Previous Forecast - Residential Access Systems
  
• Figure 37, Revised Forecast - Residential Access Systems
  
• Figure 38, Previous and Current Forecast - Video Access Equipment
  
• Figure 39, Revised Forecasts Summary
  
• Figure 40, Comparison of Previous Forecast to Current Forecast
  

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