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Smart grids in China a big opportunity for PON technology, says Ovum

Global analyst firm Ovum says in a new report that demand for PON systems to enable smart grids in China could be worth $1.5 billion to $2 billion to FTTx PON optical component and equipment vendors. That’s because the State Grid Corporation of China (SGCC) could decide to provide communications services with the same infrastructure, according to The Merger of China’s Smart Grid and PON – A Potential Perfect Storm.

The SGCC has yet to formally announce such plans. Nevertheless, technology vendors should pay close attention, Ovum asserts. “We believe that the ultimate goal of a fiber-based smart grid is to support advanced communications services,” explains Julie Kunstler, principal analyst of components at Ovum. “Building a fiber-based smart grid communications network creates a very large market opportunity for PON vendors.

“This potential market is important, as Ovum forecasts declining PON OLT port shipments beginning in 2013, following major FTTx network buildouts in China,” she adds.

Ovum notes that several PON communications equipment vendors already have developed products that meet smart grid requirements as well as support triple-play communications services provision. The deployment in China of a PON-based smart grid would benefit such OLT equipment vendors as Huawei, ZTE, Alcatel-Lucent, and FiberHome. Vendors of ONTs and such components as fiber splitters, optical transceivers, BOSAs, PON MAC chips, and optical interface chips also would benefit. “A PON-based smart grid deployment would also benefit the fiber cabling manufacturers, such as Yangtze Optical Fibre and Cable (YOFC), Corning, and Prysmian,” Kunstler adds.

Kunstler cautions that even if SGCC moves as expected, winning business will not be child’s play. Price pressures will likely be “brutal,” as an Ovum press release put it, and therefore vendors will have to squeeze every penny out of their bills material. Meanwhile, good relationships with in-country smart meter companies, PON equipment vendors, and the relevant governmental agencies, also will be important in winning business.

Finland's Funet trials 100-Gbps technology

Finland’s state-owned CSC — IT Center for Science Ltd. says it has successfully tested 100-Gbps line speeds on the country’s Finnish University and Research Network (Funet). The trial ran between Espoo and Oulu, a distance of approximately 1000 km, and was conducted in November 2012.

Nokia Siemens Networks and Ekinops provided the 100-Gbps optical transport technology used in the trial, which also included routers from Juniper Networks. The optical transmission connections used Nokia Siemens Networks’ 1+1 backup via two light paths.

“With the new channel capacity, the Funet Network can transmit data at a speed of 4 Tbps per one link connection. Funet member organizations can use the 100-Gbps services by means of a light path. CSC is also preparing to gradually update the Funet IP Network for the speed of 100 gigabits. The service will probably be first used in the data infrastructures of international research projects,” explains Juha Oinonen, development manager at CSC.

“K&K Active Oy and Ekinops are proud to be able to take part in the tests and assist CSC in its work to update its network for future needs. K&K has supplied Ekinops DWDM systems for data center and transport network environments for many years. However, this is the first time when we are able to test our 100-Gbps product in a real production environment in Finland. Our belief is that 100-Gbps connections will already be in use in Finland in 2013,’ says Harri Räty, product area manager at K&K Active Oy.

Infonetics: Tunable transceivers, 100G pace optical transceiver growth

Once the final numbers for 2012 are tallied, sales of optical transceivers and transponders will have risen 7% this year, believes market research firm Infonetics Research. Tunable transceivers and 100-Gbps transceivers will have set the pace, Infonetics analysts say. The news should continue to be good in 2013 as well, the company expects.

The announcement comes as Infonetics preps its 10G/40G/100G Optical Transceivers market size and forecast report, which tracks such devices sold for optical transport, enterprise, data center, and carrier routing and switching applications. The estimation is slightly more aggressive than that of LightCounting, which recently suggested the market will have grown 6% this yea.

The data suggests that the hype surrounding 100-Gbps technology was well founded. "100G continues to surpass even our most optimistic projections," reports Andrew Schmitt, principal analyst for optical at Infonetics Research. "There's been a flurry of prototyping, sampling, and trial activity all around the world, including China, where plans for 100G have been bumped up by 12 months since we spoke to operators there last spring. In line with our aggressive forecasts, worldwide shipments of 100G coherent transceivers more than tripled in 2012, and will at least double in 2013."

Many 100G transceiver shipments this year came from network equipment vendors, a trend Infonetics expects to continue for the foreseeable future. In fact, the company forecasts that systems houses will supply more than 75% of 100-Gbps long-reach ports by 2014-2015.

Combined sales value of 40-Gbps and 100-Gbps optical modules should equal that of 10-Gbps optical transceivers by 2015 as well, which further testifies to the shift toward high-speed fiber-optic networks. Concurrently, revenues for 10G and 40G devices are being pressured by price declines and the growing popularity of 100G.

"The other big deal in the transceiver market is that the pricing gap collapsed between tunable and non-tunable XFP, further spurring adoption of tunable XFP technology," Schmitt adds.

The overall growth comes against backdrop of capex declines and macro-economic uncertainty. Nevertheless, Infonetics remains bullish on the optical transceiver/transponder niche, forecasting the space will see double-digit growth in 2013. That will place market value near $2 billion, Infonetics concludes.

O2 Picks Nokia Siemens's 4G

Nokia Siemens Networks has been selected by O2 (Telefónica UK) to prepare its network to deliver 4G - Long Term Evolution (LTE*) - services across London and the South East of England. The UK operator is anticipating a rapid launch of 4G following Ofcom’s spectrum auctions scheduled for early 2013.

The decision to upgrade its network to 4G was made after a successful 12 month LTE network trial involving hundreds of consumers and businesses across parts of London. O2’s investment in its UK network with Nokia Siemens Networks includes an upgrade to its existing GSM and 3G (HSPA) network with the latest radio access technology.

Nokia Siemens Networks is also enabling O2’s radio access network (RAN) sharing.

“We’re investing in our network now to ensure we’re able to make 4G available to our customers as soon as possible following next year’s spectrum auctions,” said Andrew Conway, Head of Mobile Access for O2. “Our choice of vendor was based on the positive experiences we’ve had implementing Nokia Siemens Networks’ Liquid Radio solution in our network.”

Nokia Siemens Networks

Telefonica picks Cisco routers for global network upgrade

Cisco says Telefonica Global Solutions, part of the Telefonica Group, has selected Cisco for its enhanced Internet Protocol next-generation network (IP NGN). Telefonica's network connects more than 100 locations in more than 60 cities and 40 countries, including the main cities of Europe, Latin America, the United States, and Asia.

The upgraded network will support new and future revenue-generating services and help ensure that Telefonica has the capacity to meet the needs of its global customer base. Integral to supporting this Internet growth will be the deployment of the IPv6-compliant Cisco CRS-3 and ASR 9000 Series routers for enhanced capacity, high resiliency, and robust IPv6 support, according to Cisco.

Cisco says the CRS offers the possibility of future upgrading capacity for its core network with up to 400-Gbps-per-slot capability, high resiliency, and a cost-effective intelligent core solution to improve the return on investment for its core network. Cisco's new elastic core capabilities make it possible to seamlessly add a second chassis without the space and cost of a separate fabric chassis (see “Cisco tackles 100-Gbps IP/optical convergence with nLight and elastic core”).

Both the Cisco CRS and ASR 9000 Series use the modular Cisco IOS XR software operating system, which is designed to simplify network operations and enable comprehensive system redundancy and network resiliency.

Alejandro Martínez, VP of Telefonica Global Solutions, Global Network and Platforms said, "Telefonica is committed to using the most innovative technology for all its services and products. As a global company with a network spanning Asia, Europe, and the Americas we're committed to leading the world in high speed infrastructure that will ultimately give our customers more choice, flexibility and innovation. This network expansion helps ensure that Telefonica can meet that commitment."

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