Optical fiber communication media Gazettabyte LightCounting recently had an interview with a market research company, the CEO of Vladimir Kozlov, understand their views on the current situation and the optical device module industry and the future.
Q: How do you summarize the current status of optical components and modules industry?
VK: Overall, the telecom market is relatively flat, or even in hibernation; while the data communications market performance is beyond our expectations. In the filed of data communication, not just 40Gig and 100Gig, even 10Gig of faster growth than expected. 10GbE module shipments this year will exceed 1GbE.
The main reason is the growing demand for data center connectivity -“Spine and Leaf) switch architectures require more connections between the rack and aggregation switch. I suspect that demand has not only come from the data center, even enterprises to adopt 10GbE i would not be surprised, because 10GbE is not expensive. As a service provider Ethernet access lines, and use it for move backhaul.
Q: Could you explain the cause of the telecom market are flat?
VK: Part of the reason of the telecom market “dormant” is the rapid decline in SONET/SDH market. Decline in SONET/SDH market is to be expected, but the last two years, shrinking speed of the market continues to accelerate. First 40G OC-768 fell, and then is 10Gig sales decline. 10 gbe is SFP + encapsulation, and OC – 192 SONET/SDH is still XFP package.
Satability and growth in the wireless backhaul market DWDM module market to make up for the decline in SONET/SDH market. Also this year, FTTX transceivers and BOSA shipments fell sharply, while being largely replaced BOSA transceiver.
Q: LightCounting emphasized the strong growth in 2013 100G DWDM, and this year the line card port shipments reached 40,000. However, LightCounting analysis of 100Gig deployments are still relatively careful, this is why?
VK: From 10Gig and 40Gig deployment of historical experience, we must be careful.
To 10Gig deployment, for example, in optical communications bubble before (1999-2000), people are expected to 10Gig will have a huge demand. In 1999 and 2000, far more than the actual flow rate required to support 10Gig be installed until 2005, after the market are relatively flat. In 2006 and 2007, 10Gig market will rise again, after that 40Gig port shipments reached 20,000 in 2008. But with the outbreak of the economic crisis later, the development of the market in 2009 40Gig interruption until 2010 40Gig demand began to grow, this year is expected to reach 70,000 port shipments.
40Gig is greater than 100Gig, but so far 40Gig in MAN has almost none. Now 100Gig again upset 40Gig market.
I’m trying to come up intriguing problem is that the current bottleneck of MAN in where? May be some cities need to deploy 100Gig, but the metropolitan area has deployed a large number of fibers. If the fiber cost is not an issue, then why the need 100Gig? Operators will use fiber and 10Gig make more money.
CenturyLink has recently announced its first customer purchase 100Gig connection-Digital Globe, which specializes in high-definition mapping technology focus – the customer will use 100Gig connection between its data centers to transfer large amounts of data. Although the number of data centers worldwide is increasing, but this is just a special case. Needless to say, once 1GbE become ubiquitous broadband access lines, MAN or metro – access networks will need 100Gig, 10Gig will also be widely used in the access convergence layer. This situation has started to occur.
Therefore, 100Gig in MAN will happen, there is only a problem when. After two or three years, or 10-15 years also? Make predictions, people often make mistakes on the timeline, because they overestimated the impact of new technologies in the short term, while underestimating the impact of new technologies in the long term.
Q: The market development of LightCounting what about 2014?
VK: A major focus is to look at how the cable service provider’s revenue, in particular, how the additional revenue from FTTx services.
AT & T and Verizon Q313 results are good. With the growth of revenue from FTTx cable, which will encourage operators to invest more to support these services. I was thinking, this is not the beginning of a long-term trend of the future.
Today, AT & T and Verizon customers are willing to pay a little more for faster connections, but to jump to the next level, you also need to develop new applications for end users. Some applications have emerged, but we do not know what specifically. I suspect that Google offers 1Gbps FTTH services in the United States for several communities is one of the reasons end-user needs through research to discover these new applications.
A related topic is whether the deployment of broadband services to improve economic growth and how to improve. We have high expectations for this, but I want to see in 2014 in this area if there is more data.