Next-Generation Carrier's Network - Planning for Business Transformation

Market Studies

Telecom Business Transformation Series

1394 Market and Technology Study

Next-Generation Carrier's Network -
Planning for Business Transformation

Published: June 2009

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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.

Report Features

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.

This includes:

  • 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

Transformation Planning

Why Do We Change Networks?

Customer is King!

This Report

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’


NTT (Japan)

Orange/FT (French Telecom)

Telstra (Australian)





Changing Face of the Network

Why Change Networks?

Cheaper Operation:
Cheaper to Grow
Need for More Capacity:
End-User Demand.

How the Network Is Changing

Historical Network
Recent Network
Future Network

“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
• IP
• “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

Bell South

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
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
Penetration Rates
Growth of AAA and Reduction in xDSL

ROADM Forecast

Model for Forecast Core and Metro ROADMs

Assumptions of Model

Model for Forecast — Edge ROADMs

Systems — Forecast

US Market Forecast

Vendors for the NGN

Advanced Access Architecture Vendors

Acterna (acquired by JDSU)
Advanced Fibre Communications Inc. (AFCI) (Now Tellabs)
Alloptic Inc
Amino Technologies plc
Avanex Corporation (now Oclaro)
Corrigent (now Orckit)
Entrisphere Inc. (Acquired by Ericsson)
Fiberxon (Now Source Photonics combined with Luminent)
Finisar Corporation
FlexLight Networks (Defunct)
Genone3 Technologies Inc.
Hitachi Communication Technologies Ltd.
Humax USA Inc.
JDS Uniphase
Kreatel Communications AB (Acquired by Motorola)
LG Electronics
LightComm Technology
Novera Optics (owned by Nortel / LG JV)
O-Net Communications Ltd
Oplink Communications, Inc.
Optiviva Inc.
Optical Solutions (Acquired by Calix)
Osaki Electric Co. Ltd.
Paceon (Mitsubishi)
Passavé (Acquired by PMC-Sierra)
Quantum Bridge Communications (Acquired by Motorola)
Salira Optical Network Systems
Scientific-Atlanta (Cisco)
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)
Wave7 Optics
Worldwide Packets, Inc. (Acquired by Ciena)
Zhone Technologies

ROADM System Vendors

System Vendor Listing

Adva Optical Networking
Huawei Technologies
Mahi Networks (formerly Photuris) — Meriton (now Xtera)
Marconi Corporation plc (Ericsson)
Meriton Networks (now Xtera)
Movaz Networks (ADVA)
NEC America Inc.
Nokia Siemens (NSN)
OpVista Inc.
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
over Time

Figure 30: US Edge ROADMs Systems

Figure 31: ROADMs Market Forecast — US

Figure 32: OADM vs. ROADM Market — US

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