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Technology Stocks : Fiberspace Investing

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To: Sam Citron who wrote (511)5/10/1998 9:05:00 PM
From: Hiram Walker  Read Replies (1) of 525
 
Sam, you should have picked another poster. I think CSCO is losing its lead,it has no fiber optics,nor cable modems right now. Though I think CSCO will buy Terayon. I think NT is much more powerful than LUcy,and is the only company to beat. I don't rely on conventional wisdom,maybe I have no wisdom?
You know me, leaning towards HLIT,as the next CSCO. Looking at UNPH humbly as a giant killer.

Reality intervenes

Even with such capacities and features available, most DWDM systems deployed have been fewer than 16 channels, and in most cases not all the available channels are active.

"You can't look at the rate of systems growth as the rate of network growth," says Bob Tkach, division manager for Lightwave Networks Research at AT&T. "You upgrade a couple of fibers on a route [to WDM], then upgrade the others over a few years."

Still, the vendors believe that it is in their best interest--and the carriers'--to keep pushing the capacity and channel density envelope.

The more bandwidth end users get, the more they want, says Jeff Santos, technical marketing manager for Alcatel's Optinex division.

The explosive growth of data traffic and the Internet also has led some carriers to buy systems with higher channel counts and greater capacities than will be needed for immediate use.

Discussions with service providers indicate that although the full range of functionality of a 32-channel, 320 Gb/s system, which Fujitsu has developed, isn't needed immediately, the ability to expand to such levels and beyond is highly desirable, says Pawan Jaggi, manager of Fujitsu Network Transmission's optical networking group.

Despite the rapid advances in WDM, carriers are still struggling to meet demand for bandwidth.

"We're all in a bandwidth crunch," says Tkach. "We're limited by our ability to deploy equipment." It takes millions of dollars to deploy systems and activate channels, he says. "Good luck if you're able to put a system in and use all the channels."

Even though carriers may be facing similar challenges in meeting the ever-increasing demands being placed on their networks, their philosophies about buying and deploying such equipment differ.

There seems to be a consensus that Sprint is the most aggressive in deploying WDM systems. Although most carriers have deployed eight-channel systems, Sprint has plunged forward with 16-channel systems and higher. This month the carrier will deploy Ciena's MultiWave 4000, 40 channels scalable to 96 (Figure 2).

Sprint's aggressive approach with WDM is a cost-effective way of future-proofing the network, says Marty Kaplan, Sprint's senior vice president and chief technology officer. By installing systems capable of greater capacities than are needed immediately, the company is ready when demand spikes.

"As you look at WDM, one thing you can do is put in the infrastructure and add one channel at a time," Kaplan says.

Not all vendors and carriers are eager to press forward for the greatest capacities possible. Northern Telecom's flagship product in WDM is still a 16-channel, 160 Gb/s system, says James Frodsham, optical networks director for Northern Telecom. The company isn't trumpeting an ultradense system yet, and Frodsham gives no indication that it will do so any time soon.

Nortel believes that its 16-channel system offers the best combination of performance and cost per bit, and there's no reason to try to keep up with the Joneses in terms of channel counts and multihundred-gigabit capacities.

"We see no value in overhanging the marketplace," Frodsham says. "Our customers drive our product development system. We're working closely with our customers to provide optimum solutions as they grow their networks."

MCI also is taking a slower approach to deploying new systems. The interexchange carrier mixes equipment from various vendors rather than locking into proprietary systems from individual vendors.

"We're trying to use an open system, a passive system," says Shawn O'Donnell, MCI's transmission and engineering standards director. That means transponders aren't required to tune the lasers creating the optical channels to meet the specific needs of certain vendors equipment.

"We put the lasers right into the dense WDM system. Transponders add another element of cost," O'Donnell says.

Unlike Sprint, MCI has not been forced by exploding traffic demand to adopt the highest capacity systems available as fast as possible.

The IXC is looking at ultradense systems, O'Donnell says. "We expect to deploy 16 wavelengths in 1999, and we're looking at 32 wavelengths as well."

Still, deployment that is slower than product development should not slow vendors' initiatives in developing greater capacity products for future demand.

"The development cycle for a manufacturable product is a few years," O'Donnell says. Vendors should always be ahead of the carrier. Ten years ago, MCI didn't think it would ever use the capacity that was available then, he says.

Thats from internettelephony.com

Hiram
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