The Internet Roadmap – Chapter 13: Network operators

NETWORK OPERATORS

Whether by copper DSL, coax cable, WiMAX, optical fiber, or some hybrid combination, users are connected to the next Internet link known as the “central office.” This can be thought of as the hub of a wheel, with each spoke leading to a specific subscriber. The spokes are composed of a combination of wires, cables and other equipment (referred to as the “outside plant”) that connects subscribers to the central office. In a wireless network, the central office is called a base station. For satellite Internet service, the satellite itself functions as the central office.

These central offices are themselves linked to the Internet pipeline through metropolitan area networks (MANS), otherwise known as metro or core networks. These metro networks are in turn connected to various long haul networks (also called wide area networks, or WANs). These constitute the backbone of the Internet, connecting cities, countries and continents and vast computer systems comprised of countless servers and mainframes that support the Internet data stream.

While this worldwide network is immense, so is the demand put on it by an exploding base of Internet users. According to Cisco Systems research, some 90 per cent of Internet households have a much lower usage profile than the top 10 per cent of users—but these numbers warrant closer scrutiny. Web traffic is expected to more than triple from 2010 to 2015—even for the average Internet household.[1]

Consider these global projections for 2010 through 2015:

• Consumer Internet traffic will experience a compound annual growth rate of 34 per cent over wired networks and 95 per cent over mobile networks.

• Business IP traffic will grow at an annual compound rate of 22 percent, with business mobile data the largest area of growth at 84 per cent.

• Mobile data traffic, which includes handset-based data traffic, such as text messaging, multimedia messaging, and handset video service, will experience a compound annual growth rate of 92 percent.[2]

Network operators are now faced with the challenge of how to deal with this traffic growth in a way that’s practical and financially feasible.

“Operators face big threats to their profitability and survival. One of the biggest threats is the mismatch between growth in network traffic and growth in operator revenue. Despite the growth in IP bits, network operator revenue growth is flat or declining annually … complicating matters is the fact that revenue generated by a consumer/residential bit is less than the revenue generated by the enterprise bit and the traffic mix is shifting from enterprise-heavy to consumer-heavy.”[3]

One of the solutions may lie with the development of “agile” networks. These work to reduce bandwidth bottle-necks, by allowing traffic to automatically switch and take a variety of different paths between Point A and Point B.[4]  The operators of existing metro and long haul networks—which use optical fiber to transport much of the world’s Internet traffic—are also working to upgrade components and equipment in order to increase capacity.

“During the final stages of the Dot-Com bubble in 2000, when everyone was sure that the boom would last forever, network operators sank billions into infrastructure equipment and fiber. However, when the boom went bust, that fiber was left idle—becoming so called ‘dark fiber’—with much of it remaining unused for a decade. However, with the continued growth of the Internet, the industry finally has absorbed the excess capacity, lighting up the vast excess dark fiber from the bubble, and prompting companies to invest in upgraded optical equipment.”[5]

There are hundreds of different network equipment providers who are part of this supply and demand value chain. These providers are developing the next-generation optical components and subsystems required to drive more web traffic across metro and long haul networks, as well as provide the solutions needed by ISPs and network operators.

The Reconfigurable Optical Add/Drop Multiplexer, or ROADM, is a key technology at the heart of this race. ROADMs are optical devices that can switch web traffic without it having to be converted from optical signals to electronic signals and back again. This speeds up the flow of traffic over the network and allows the network to be configured and reconfigured remotely, which further allows more traffic to move more quickly with fewer service disruptions.[6]

 Resources

1. Cisco Visual Networking Index: Forecast and Methodology, 2010-2015
2. The Need for Service-Driven Networks
3. The Need for Service-Driven Networks
4. Optoelectronics Sustaining Innovation in the Telecoms Market
5. Optical Telecom Gear Market Finally Recovers from Dot-Com Bust
6. Optical Telecom Gear Market Finally Recovers from Dot-Com Bust

Next: The Internet Roadmap — Chapter 14: Surfing and Apps

The Internet Roadmap — Chapter 12: Wi-Fi