Earlier this week, I had to explain my vision of the Optical Fibers Communications industry, with its own cycles being tight to the ones of the Telecoms industry at large. For instance, I am convinced that the actual deployment of FTTH Fiber To The Home networks all over the World (well, in some parts of ;-) marks the end of a cycle and the begining of a new one, which will last at least 20 years.
To be brief (I will come back on that later someday), my take is that once FTTH will be the standard, a new fiber will emerge that will be aimed at long-haul transmissions. Featuring ultra-low loss, say an order or two of magnitude vs. today's fibers, this new fiber will pave the way for entirely new solutions for cabling, splicing, installation, testing, etc. In other words : it will revamp the whole Fiber Optics industry.
This discussion made think about an article I wrote back in the early 00's, when I was with Agilent Technologies, for the magazine ' Telecoms Plus International '.
note : Fiber Optics novices, please feel free to call me (Skype welcome) for explanations ;-)
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The Light Fantastic
Over the past five years, the drivers in the fiberoptics industry have moved from research and development to marketing, and financial security has taken precedence over engineering innovation. Hot technologies such as DWDM have not been fully realized due to the fixed goals of lowering costs and increasing ROI, which will very likely remain the dominant trends for the next 18-24 months.
Key players cannot remain stagnant, however: new domains and segments must be exploited. The "last mile" - the "broadband access network" - must be addressed. The principal challenges facing the Installation and Maintenance (I&M) specialist, therefore, are twofold:
i) In I&M, customers are seeking one-stop specialists and any valuable provider of test and measurement equipment must be prepared to offer "drive-through" I&M solutions
ii) The much talked about last mile boom is near, with the industry beginning to climb out of the economic downturn. There will therefore be a great need for new, specialized tools for technicians, and I&M companies must be ready for this.
The fiber optics I&M industry has an almost magical quality about it. By virtue of the very nature of what it entails, the market will continue to grow and will always exist. The question now is: where will it go ?
The Old Timers
A quick glance at the fiberoptics industry over the mid-80's - mid 90's decade, between the first singlemode long-haul systems and the Telecom Act and the telecommunications market deregulation in Europe, shows that until 1998 this industry was pretty much technology-driven. Every single progress in transmission capacity or regeneration span length was due to improvements in the fiber manufacturing process or in the laser technology. For instance, the quick migration from the first 'long-haul' optical transmission systems on multimode fibers in the early 80's to the first singlemode systems around 1985 has been possible thanks to the availability of the first 'good-quality-enough' singlemode fibers and the 1310nm laser diodes. Telcos and carriers were able to double the regeneration spans from 10-15 km to 30-40 km, making optical transmission cost-effective for their trunk networks. The apparition of the 1550nm lasers one or two years later was a tremendous step forward: the 50 miles (80km) barrier was reached, allowing the service providers to install high-capacity (at this time... 200 Mb/s) optical systems between the major cities of their territory. The first commercial EDFA optical amplifiers entered the long-haul arena in 1992-93, almost immediately followed by the first WDM transmission systems: incumbent telcos all over the planet then deployed their optical core networks with SONET/SDH systems. The foundations of the Information Superhighways were ready.
The New Deal
A couple of years later, in 1995, two major events were to change the face of the Telecommunications world : The US Telecom Act, that will be released by the Federal Communications Commission in 1996, and the termination of the patents regarding telecoms fibers manufacturing processes, that will expire before the end of 1995.
The first paragraph of the FCC's Telecom Act is pretty clear : ' The Telecommunications Act of 1996 is the first major overhaul of telecommunications law in almost 62 years. The goal of this new law is to let anyone enter any communications business -- to let any communications business compete in any market against any other. The Telecommunications Act of 1996 has the potential to change the way we work, live and learn. It will affect telephone service -- local and long distance, cable programming and other video services, broadcast services and services provided to schools' [FCC, http://www.fcc.gov/telecom.html]. The door was then open for a never-seen-before competition in the telecoms arena. The forthcoming deregulation in Europe, scheduled to start January 1st of 1998, was also a key element in the tremendous tornado that lead to the New Economy world at the edge of the 21st Century...
In the meantime, Corning and Lucent Technologies (formerly as AT&T) were to lose the patents which protected the manufacturing processes of the SMF Standard Singlemode Fibers, a.k.a. ITU-T G652, and the DSF Dispersion Shifted Fibers, a.k.a. ITU-T G653 since... the 70's. Together, Corning and Lucent owned roughly 90% of the telecom fibers market, providing all major service providers across the planet with state-of-the-art G652 and G653 fibers. Their strategy to overcome a situation where the production of those mainstream products was now open to everyone was to develop new fibers for new needs: here come the famous non-zero-dispersion-fibers, a.k.a. ITU-T G655, aimed to resolve the issues of intrinsic dispersions within the fibers at 10Gbit/s and beyond. The DWDM systems which were to be deployed by the various players boosted by the US Telecom Act and the European Telecom deregulation had now their own transmission media: those *new fibers*...
The New Economy
1998 : the Telecoms industry runs at full-speed with the deployment of optical links across oceans and continents, the Internet penetrates the consumer market with free access services, and Marketing goes to Fiberoptics Technology !
For instance, for the first time ever fibers have a name, no longer a obscure number: Corning' s LEAF or Lucent' s TrueWave for the new ITU-T G655 fibers. Also, for the first time since the first commercial applications in the early 80's, optical transmission systems are based on proprietary technologies: although the famous 'ITU Grid' was meant to guarantee some interoperability between equipments from different vendors, all major WDM systems suppliers but one, Ciena, were providing turn-key solutions that include fibers, cables, hardware, and transmission equipments. Each Network Equipment Manufacturer, or NEM, was then using a specific region of the wavelength grid defined by the ITU-T authority, locking out its rivals of its installed base.
This was a perfect solution for the numerous new entrants in the telecommunications marketplace, who could then entirely rely on the NEM for the complete network' construction food chain, from design to system turn-up and maintenance. The fact is that those new service providers or carriers were penetrating the optical communications business from scratch, almost without technical knowledge nor experience in this domain. Hence the critical role played by the optical system supplier, who could both offer its new technologies and help the new entrant to build its own value proposition.
The Magic of Fiberoptics technology was gone.
This was the time of the New Economy Virtuous Circle, when investors brought tremendous financing into the new entrants, who signed tremendous contracts with the network equipment manufacturers, who got tremendous financing from investors.
The New Era
But this was also the beginning of a terrific vicious circle, which ended-up with the 2002' divestiture of almost every of those new entrants could they be services providers competing against the incumbent telcos or carriers leasing their fibers to those two segments.
The reason is simply the same than for the numerous start-up companies who started with the Internet expansion and died with the Internet-bubble explosion: a nice business plan with bright ideas but no market, read no customer, no end-user. Being really serious for a second: beginning of the 21st Century, half the planet do not use a telephone, majority of access to the Internet are made from the office and not from home, and most of the cell phones are used by teenagers for instant voice chatting.
So, as a matter of fact, this reality recently blew up in front of the Telecom Act's babyboomers, who all quit - or are quitting - the business, leaving behind them beautiful up-to-date telecommunications infrastructures, with brand new singlemode fibers that are future-proofed, and enough bandwidth capacity to seamlessly and simultaneously carry the UMTS and Internet communications to the subscribers.
This is the time of Customer-focus, it is the time to listen to the end-user, and most of all, it is the time for plenty of new services and applications, especially in the test & measurement arena.
Let us go through the fantastic opportunities we face now as the Magic of Fiberoptics is back!
The Great Magic Circus
Ever heard about 'fiber characterization' those days? One of the hottest topics of discussions between
carriers or service providers and their suppliers, could they be network equipment manufacturers or test and measurement companies. Two major reasons for this demand: on one hand, the ongoing consolidation within the telecoms industry leads the operators to sooner or later integrate networks infrastructures that have been deployed by former rivals, hence the need for expertise by specialists. On the other hand, the same have to cope with limited resources in terms of instrumentation and workforce, a critical issue reinforced by the fact that fiber characterization requires both high-end solutions and skilled engineers.
Aimed at the complete description of the physical status and actual optical performances of the fibers, the fiber characterization applies to existing optical infrastructures and also to new networks: expertise of optical cables installed during the mid 80's and 90's decade, qualification of existing fibers for WDM transmission, and fine-tuned analysis of new cables for dispersion compensation.
The expertise of existing fiber-plant is both a complete check-up of the health of the cable and the verification of the capability of the fibers to carry certain transmission systems like WDM at 10 Gbps per channel. It consists of several verifications, such as visual inspection of the cable plant itself, and lots of different tests, such as fiber signature, chromatic dispersion, polarization mode dispersion, and spectral loss measurements. All procedures that require high-level of expertise, by skilled engineers and technicians with enough background to deliver the proper conclusions, so the service provider or the carrier can ensure his optical infrastructure is able or not to sport that kind of system.
On new installations, the goal of fiber characterization is a bit different: the singlemode fibers produced since 1998 are aimed at high bit rate transmission, say 10Gbps TDM, featuring perfectly controlled dispersion parameters with low PMD and low CD. Measuring those parameters helps to verify if dispersion compensators must be eventually used, and where. On top of this 'basic' requirement, the fibers can also be characterized for the next generation systems, like the famous 40G - 40Gbps per channel on long-haul WDM systems.
A quick review of the optical networks infrastructures around the planet shows that more than the half of the fibers count will have to be characterized within the next couple of years, either by network operators willing to integrate existing cables sporting 'unknown' fibers, or service providers looking for key technology differentiators, such as 40G systems. That is a reason why so many carriers and service providers are seeking for help from their traditional partners and suppliers.
So, what is it for a market where the demand is high - fiber characterization - but only a few suppliers can deliver - experts at network equipment manufacturers or test & measurement companies: a perfect marketplace to be for high-growth profitable business! Long-lasting business or not, that is the question. The answer is most probably 'Yes', due to the fact that the complexity of optical networks increases when in the meantime the average skill of available workforce decreases...
Happy Days
With behemoths like Global Crossing or Worldcom in the tornado, the turmoil agitating the telecommunications marketplace since months seems to drive the entire industry to an incredible u-turn, backwards the 1996’ Telecom Act. Investors’s confidence gone away, the telecommunications landscape will pretty much look like the computing industry : a hand-full giants sharing 90% of the market, developing and deploying new solutions and services with help of a cascade of primary and secondary contractors and sub-contractors. An excellent opportunity for small companies to become key players...
The major incumbant telcos are to be back in the spotlights, with almost all their rivals born from the Telecom Act wiped out. They will then have to integrate thousands of fiber miles in their own networks, opening a fantastic door for engineering and consulting firms to help them with expertise, fiber characterization, and documentation.
Core networks consolidated, access networks almost completed, the telcos will master the entire optical infrastructure from long-haul to the last-mile. The competition no longer that hard, they will then have the unique opportunity to control the very bottleneck of broadband access : the last mile. With so many fibers now waiting for a signal to carry, the “new” services providers will have to find some way to turn them from ‘vacancy’ to ‘occupancy’...
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