Optical Share of the "Last Mile:" AON Technologies, Strategies, and Emerging Markets

Report Highlights

• The global value of the AON market for all technology types reached $138 billion in 2003. The market is expected to rise at an average annual growth rate (AAGR) of 5% and reach $178 billion by 2008.
• In 2001, only 17% of companies in the sample were showing a profit or not showing losses. Annual reports for 2003 for 100% of public companies sampled are projecting growth and/or stability in 2004.
• Technologies showing strong projections for 2004 are materials, optical terminals and transmission systems.
• As more metropolitan areas replace copper infrastructures with fiber to interconnect to dark fiber available through carriers, there will be an increase in revenues associated with fiber materials, cables and services.

INTRODUCTION

While carriers have dark fiber excess and fiber manufacturers see a glut, all optical network (AON) equipment and service companies are taking advantage of the existing fiber infrastructure. With increasing market demand for bandwidth in local and remote applications, industry is developing and deploying communications networks to accommodate the demand by resolving “last mile” limitations. Two major types of AON technology evolved in this effort: wavelength division multiplexing (WDM) and time division multiplexing (TDM).

Some maturity was achieved with WDM optical networks and end-user technologies. However, bandwidth capabilities still are too limited to meet current market demands alone. TDM optical networks and end-user technologies have been shown to greatly increase bandwidth capabilities and are capturing market share even though the technology type still is considered immature.

Transitioning from current legacy network strategies has presented multiple challenges globally. Industry coalitions are emerging to address the need for new global standards and cooperation. This is necessary to reduce or eliminate limitations in technology and increase available bandwidth in the current infrastructure.

This BCC report forecasts emerging AON markets and assesses growth potential over a five-year period through 2008. Key objectives were: to examine strategies for resolving “last mile” limitations, provide a comprehensive comparative analysis of technologies, review related research and development, and forecast the future direction of AON markets.

SCOPE OF STUDY

The report provides:

• Market forecasts by technology, including TDM, WDM and components
• Market forecasts by application, including broadcast television, telemedicine/videoconferencing, tactical internetworking and legacy telecom/network systems
• Forecasts for deployment and implementation of all optical networks in domestic, European, Asian and other markets
• Analysis of research and development, funding and deployment limitations.

INFORMATION AND SOURCES

Forecasts are based on current industry data, SEC filings, government databases, inputs from industry experts, and standard technology forecasting methodologies. Information sources include extensive interviews with key players in the telecommunications markets, market and scientific researchers, academicians, and leading stakeholders in emerging standards and industry organizations. In addition, trade magazines and industry reports were consulted. ADC, ADVA Optical, Cogent Communications, and Marconi Corporation provided specific permissions for company profiles. All inputs were greatly appreciated. Some of the related BCC publications include but are not limited to: