TeleChoice Fiber Model Shows Risk of Rapid Consumption of Unlit Fiber
Next Phase of Carrier Data-Driven Model Shows Existing Dark Fiber Connecting Major Cities May Be Consumed by 2004
Tulsa, OK (September 10, 2001) – Dark fiber capacity in the nation’s long-haul telecommunications network could get used up in rapid fashion, according to a new report from TeleChoice, Inc., the leading telecommunications catalyst firm. The firm has released the next phase of capability and analysis from its Model for Advanced Capital Planning (MADCAP) framework, the MADCAP Growth Planning Module.
The analysis being released today uses the new module to evaluate three potential growth scenarios for the existing lit and unlit bandwidth linking the top twelve cities in the U.S. Results show that, in two of the three scenarios, presently unlit fiber – representing approximately 80% of the nation’s fiber supply – is used at an alarmingly rapid pace, exhausting fiber supply among major hubs within the next three years.
“There’s a core assumption that there is so much unlit fiber in the ground that it could take forever to use it up, given the concurrent increased capacity of fiber transport equipment in the industry,” says Russ McGuire, Chief Strategy Officer at TeleChoice. “But some forms of traffic can eat into that fiber supply very fast.”
The analysis performed using MADCAP considered different scenarios using reasonable mixes of the latest and projected optical transport equipment and technologies. The MADCAP model is built upon actual carrier data, and is possible through the cooperation of major bandwidth providers in the U.S.
The results are summarized in a report, “The MADCAP Report: U.S. Telecom Transport Supply and Demand,” available for free to MADCAP subscribers and for $2500 to non-subscribers. The report is available and shipping today.
The MADCAP framework is a comprehensive, route-by-route modeling tool designed to assist long-haul carriers in making critical capital investment decisions. MADCAP enables extensive what-if scenario playing as part of the carrier’s strategic planning activities.
Three Scenarios Analyzed in Report
"We’ve taken the MADCAP tool and used it to explore three different possible industry outcomes," says Russ McGuire, Chief Strategy Officer at TeleChoice. "This exercise is similar to what carriers are doing as part of their strategic planning process. We’ve captured the key industry implications on transport supply and demand and the secondary strategic implications on carriers and their vendors."
One of the several surprising findings of the analysis is that, under two of the three scenarios, all existing dark fiber on the major routes studied would be consumed by 2004.
“This finding clearly contradicts the recent assumptions that there is a glut of dark fiber,” McGuire says. “It is critical for carriers and vendors to consider the implications that such a near-term dearth of fiber would have on their business models.”
The three scenarios capture the different dimensions of growth in supply and demand for capacity on long-haul networks. The report looks at the four possible permutations for low and high supply growth versus low and high demand growth. One of the combinations, high supply/low demand growth, is not a likely scenario in the present capital markets, so the three following environments were evaluated:
The Doom & Gloom Scenario is based on a view that capital markets will be closed to all telecom infrastructure investments. The result will be slow deployment and slow adoption of broadband access+metro services, slowed growth in Internet users, and the lack of near-term “killer applications.” (Low Supply/Low Demand)
The Rational Expansion Scenario is based on a view that capital markets will remain closed for speculative investments in long-haul infrastructure, but that the capital markets will support aggressive investments to “debottleneck” local infrastructures. The result will be somewhat higher adoption of broadband access+metro services as well as the emergence of new broadband-enabled applications. Long-haul carriers will continue to invest in their infrastructure on a success-led basis, slightly leading demand with supply as has been the industry’s nature throughout its history. (Low Supply/High Demand)
The Free Money Scenario is based on a view that capital markets will recover for all telecom infrastructure builds and enable more free flowing investment in this area. The result will be similar demand growth to the Rational Expansion Scenario, but a return to speculative investment in new long-haul capacity, resulting in significant transport oversupply across all modeled routes. (High Supply/High Demand)
“Our analysis includes thinking about future, unanticipated new applications. By their nature, these are impossible to predict, but one that we believe in is machine-to-machine traffic, which can explode overnight as small amounts of status and alerting information start proliferating the network,” says McGuire. “You have major movement in the wireless endpoint technologies like 802.11 and Bluetooth that are going to bring a whole range of devices online for maintenance and presence-based alerting. This has the potential to drive a whole range of small, regular streams of data that will start walking up the base usage of the network to some very high levels.”
The report is available now for $2,500 and can be ordered from TeleChoice’s website at
telechoice.com.
Carriers need a tool to assist them in navigating through the challenging strategic choices they face in this uncertain environment. The visibility beyond their current infrastructure and the ability to perform what-if planning is critical when the future is as uncertain as it has become.
Technology vendors need a tool to understand the impact that different scenarios will have on their market opportunities and for working with their carrier customers to uncover the optimal timing for introducing new technologies into their networks. MADCAP has also proven quite helpful in proving the value of specific solutions within individual carrier networks.
"The MADCAP tool has given us the first discrete data-based ability to create market projections for our products under different industry scenarios," said Kristin Rauschenbach, CEO of PhotonEx Corp., a developer of 40 Gbps and faster optical systems for core networks. "As we’ve worked with it internally, we’ve also gained new insights into how the value proposition for our products can play out in specific customer applications and how it can work with individual customers in addressing their particular situations."
EDITORS: Graphs from the executive summary of the MADCAP report and screen shots of the MADCAP model are available on demand.
MEDIA ALERT: Attendees to the Networld+InterOp Fall 2001 show in Atlanta can hear more about this topic at the breakfast round-table “Glut-ster vs. Gap-ster” Debate, Wednesday, Sept. 12, at 8:00 a.m. in the Georgia World Congress Center, Rm. 312 East, hosted and moderated by the Net Economy.
ABOUT THE MADCAP REPORT: U.S. TELECOM TRANSPORT SUPPLY AND DEMAND
The MADCAP Report: U.S. Telecom Transport Supply and Demand, offers the only detailed route-specific analysis of the bandwidth linking the top twelve major metropolitan areas in the U.S. This report evaluates three different yet plausible scenarios for network applications growth, as evaluated using the TeleChoice, Inc. MADCAP (Model for Advanced Capital Planning) tool. The MADCAP framework enables users to perform capital strategic planning using detailed current and projected applications demand, as well as the key determinant factors influencing industry and carrier-specific growth. This is compared against available supply. More information about MADCAP is available at telechoice.com.
An executive summary and table of contents for the report may be viewed at: telechoice.com.
telechoice.com |
