The Lightwave Blog

By Meghan Fuller Hanna

Last week, Infonetics Research released its latest PON market forecast, which included, for the first time, a quantifiable analysis of WDM-PON. The market research firm believes annual port shipments for WDM-PON will grow at a 41% CAGR between 2007 and 2011.

Neither the 41% CAGR nor the fact that Infonetics has included an actual forecast of the WDM-PON market surprises me. I would characterize WDM-PON as the sleeper trend of last month's OFC conference. Representatives from no less than a half dozen Tier-1system vendors confirmed to me that they are exploring the technology.

Here are some random tidbits I've been able to glean thus far:

* Some believe WDM-PON has a solid business case now relative to GPON, but the sticking point, as you might imagine, appears to be the cost. System vendors will lean heavily on the component suppliers (like they aren't under enough pressure already) to get the price reductions required before widespread deployment is economically feasible.

* When we think of WDM-PON, we tend to think of it in terms of residential service delivery, but early deployments will likely deliver high-capacity business services and/or IPTV backhaul.

* There is a big difference between CWDM-PON and DWDM-PON. CWDM-PON would be less expensive and a far easier proposition; pluggable CWDM optics are available now. However, operators would be limited to a capacity of eight to 16 wavelengths. DWDM-PON, by contrast, could support upwards of 40 to 80 wavelengths and beyond, but it represents a much greater technical challenge. The AWGs, for example, must be athermal and environmentally hardened. And the cost of the optics is higher because of the narrower channel spacings.

At a macro-level, WDM-PON makes a lot of sense. We're already seeing the optical layer begin to migrate further and further into the access network (the emergence of edge ROADMs would be a key example), and some sort of access WDM would seem like a natural extension to this trend.

Posted by Stephen Hardy

Everyone says that the optical components space needs to consolidate -- but, based on observations made at the OSA/Lightwave Executive Forum right before OFC/NFOEC, industry executives don't think consolidation will reach the levels necessary for a healthy industry any time soon. Here's a list of some of the barriers to consolidation that I've heard about over the last three weeks. For more details, keep an eye out for an article I'm in the middle of writing for our April issue.

Why Consolidation is Happening Slower than Necessary

1) Mergers between weak companies won't work -- and how many strong, profitable companies do you know of in the optical communications space?
2) You can do a deal that favors the shareholders of one company, but it's tough in the current environment to benefit shareholders of both companies.
3) Japanese companies don't do M&A.;
4) The mathematics of merging two companies in the same market space look like this: 1 + 1 = 1.5.
5) Greed gets in the way sometimes.
6) That war chest I hoped to build with my IPO is much smaller than expected.
7) There are enough stupid VCs around to keep bad companies afloat.
8) Ego gets in the way sometimes.

Perhaps you've heard other reasons. If so, let's hear them.

Posted by Stephen Hardy

JDSU's Superblade announcement was one of the highlights of last week's OFC/NFOEC. The integration of a wavelength-selective switch (WSS), EDFA, pre-amplification, and optical channel monitoring (OCM) onto a single-slot blade with its own OSS certainly represents a step forward in terms of functional integration.

A few hours after the Superblade announcement, I visited the booth of Israeli EDFA and OCM specialists RED-C Optical Networks. A source there said that his company had attempted a similar integration in 2006, combining in-house EDFA and OCM expertise with Capella's WSS. The source said the combination hadn't been as warmly received as RED-C and Capella had hoped, mainly because systems designers didn't want to give up software control of the WSS.

RED-C has a partnership with JDSU, so I asked the source if his company had passed along its experiences to JDSU. The source said they had, but that JDSU suggested that RED-C's experience was a couple of years old and the market was now ready for what the Superblade has to offer, including the OSS.

Contacted later at his booth, JDSU's General Manager, Subsystem Products, Optical Communications Doug Alteen said that his team hadn't heard about RED-C's experiences. He added that the OSS doesn't prevent the host system from controlling the operation of the blade.

Labels: JDSU, Red-C