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Metro, I am actually more and more optimistic around our position in Metro. First, as we talk about SSE, that's a really, really substantive win. We talk about breaking up the BT lock on internet access in the U.K. and SSE going after that with us, displacing an incumbent. Clearly, the low power, the ease of use, the density of the program, really, against everybody. And we opened that door and I think it's going to be a very long program for us that'll be very, very good over time. And once again, it's a new benchmark in the industry where we can go leverage that. So I'm excited about Metro. One of the things that I am also excited about Metro is the Coriant acquisition will give us a very good Metro core. And it's very complementary to what we get with the XTM. The XTM is more of an access edge play. When you look in about power, cost, density, it's a clear leader. When you have to go into integrated switching, when you going into redundant control, the [Enterra] will be a great complement for that. So I think it opens up a big opportunity as the Metro core continues to expand. And then clearly, in the Metro, 5G and fiber deep are going to be the big plays over the next several years. I think we were well positioned before as we add the Coriant portfolio, particularly of their new vibe capabilities and the rest of their portfolio around automation and XTM, I think, we'll have a incredibly compelling solution. When that really starts, I'm not sure. But it's going to start sooner rather than later and it's going to be, I think, quite large and I do think we are well positioned both from a technology perspective but also now from a customer perspective. Dave, if you could answer Vijay's question on speed transitions, I'd appreciate it.
That 19's in the 38, Alex. I'm pushing both trials of new products. They're new customers, they're old customers with new technology and there's Open, which is typically or often, as we said, 9 of them had not historically been Infinera customers. So I'm, quite frankly, excited about all the trials and I think it speaks well to our opportunities over the next several quarters, Open to me is strategically important.
If you think about the PIC going from 500 gig to 1.2 terabits, right, that leaves a lot more ability for customers to add incremental bandwidth over time. Our installed base of fillable I bandwidth grows dramatically. As we win these new customers, and we're meaning more than we have, now that we have our full ICE4 portfolio out, large percentage of them are now buying with I-Bandwidth. I think, in our script, we said, half -- the second half of the year, as I recall, which is up substantially from what we have historically done. I think that's great. We're using I-Bandwidth to lower the customers' first in cost. That is a critical buying decision as first in cost. And then for no incremental cost, we basically got them locked in for years of capacity expansion. So I-Bandwidth as a percentage going up is important. The fact that the PIC capacity is more than double isn't important. And the fact that we're winning new footprint, the one in Asia that we won, is a substantive rollout in Q3. SSE starts to roll out in Q3. We've just been given a letter of intent for their Tier 1, new customer for us. Down in LATAM, that'll open up in the second half, maybe not Q3, we'll see if we can deploy by then, but in the second half. It'll also be I-Bandwidth. And interestingly enough, it's a customer that started, it's in the lab because we have Open ICE, and we've been certified now across all their vendors' amplifier systems. So we're winning footprint. It comes with a cost but mostly, the dynamics are very positive in regard to why Q3 margin is under a little bit of pressure.
It's not a step up in pricing pressure. We are seeing probably a disproportionate of new footprint wins and deployments in Q3.
When the Instant Bandwidth infrastructure is already deployed, they can very easily put out very small amounts of incremental CapEx to open up new markets. So we have found that for the larger carriers, the adoption is actually fairly fast. The other thing that is important to understand as an investor, when we sell a fully loaded unit versus an Instant Bandwidth loaded unit over time, our margin on the Instant Bandwidth loaded product is actually better. That's part of how we pay for it. We're financing it. And I think that it works great for our customer. It also works great for our shareholders. And the great part to me is, once you have that infrastructure in place, that next 100 gig is coming to us, because it's the cheapest, easiest, fastest way for our customer to deploy that next 100 gig.
Yes, and I'm going to add on a comment here. I want to make sure that the value of Instant Bandwidth, it is more valuable to the customer because of the reconfigurability that the Instant Bandwidth enables them in their marketplace, right? And then I've seen this and many of our customers, the -- Tom has spent mostly in the financial side, talking about the ability to turn on and align with their revenue stream. There's an added value on there that we get highly significant upside from is that a licensed network can be reconfigured instantaneously for that as their patterns demand or if a catastrophic event has happened that allows them to move those licenses around to where the system is operational and that adds a significant amount of value to them. That's the primary reason why the margin for this capability is higher.
It's really -- and Dave talks about this a lot around -- the industry's talking about network automation. This is a real use of network automation. Today, I have capacity from point A to point B that I bought. Tomorrow, I need it from C to D. With our Instant Bandwidth, you actually just move the license from C to D. You don't have to do anything else. We're really working hard to create network as utility. And I think that we're the only people that have the toolbox to bring that to life. |
