Next-Gen Optical Net Tested

Vendors complete the first live 40-Gbps optical transmission trial.

Ericsson and Telstra have successfully completed the world's first live network trial for next-generation 40Gbps optical transmission technology in Australia.

The technology trial demonstrated that Telstra's existing 10Gbps Dense Wave Division Multiplexing (DWDM) transmission technology, which carries voice, data and video, can be increased to 40Gbps without major changes to the network.

Telstra's network and technology executive managing director, Dan Burns, said the trial was commissioned as a part of Telstra's forward planning to meet expected growth on the inter-capital networks.

Burns said it demonstrates the capability of the Telstra Next IP network and positions Telstra at the forefront of industry development to implement high capacity long distance transmission.

"Enabling 40Gbps connections between Telstra's IP core routers, will allow us to expand our network capacity in line with expected growth in IP traffic," he said.

The trial was conducted over Telstra's existing 10Gbps 1,121 km coastal and 1,244 km inland optical fiber routes from Sydney to Melbourne.

Ericsson Australia/New Zealand CEO, Bill Zikou, CEO, said the trial was conducted over a 10Gbps network with no modification to the existing optic fiber infrastructure.

"Ericsson's DWDM solution, Marconi MHL 3000, provides a seamless in service upgrade of capacity with minimal investment. This means that with Ericsson they would have no need to change the existing optic fiber infrastructure," he said.

This will allow network operators to respond to expected bandwidth increases caused by new residential, mobile and business, packet-based broadband applications.

Ericsson's next-generation 40Gbps optical transmission technology is based on the new modulation format which exhibits high robustness against PMD (Polarization Mode Dispersion - a fiber characteristic which can limit high-speed transmission).

Ericsson has provided Telstra's transmission infrastructure in Australia for a number of years and this infrastructure is part of the Telstra Next IP network.

Only this week telecommunications research firm, Ovum, posted a new five-year forecast for service provider revenues and capital spending.

For the Asia Pacific region (excluding China), Ovum said wireline revenues will decline slightly over the next five years, from A$89 billion (US$73 billion) in 2006 to $84 billion in 2012.

However, mobile revenues will grow two to three percent each year on average, reaching $167 billion by 2012.

Ovum forecasting vice president, John Lively, said Japan and Australia have the largest share of the Asia Pacific region's fixed telecom services market, and competitive pressures combined with mobile substitution are hobbling service revenue growth in both countries.

"In turn, the continued erosion of fixed voice revenues means companies cannot afford to grow capital spending," Lively said.

"Mobile revenue and capex, on the other hand, will continue to grow. The main drivers will be subscriber growth and the adoption of 3G services, which will offset price declines in basic mobile voice. "

The one technology that will be in high demand, according to Ovum, is video on demand (VoD) with revenues reaching $12.7 billion worldwide in 2011, making it one of the fastest-growing digital content services in the next five years.

Starting from a base of $2.7 billion in 2007, Ovum expects to see more telcos across the globe launching their on-demand content propositions, moving themselves into content distribution.

Ovum media and content analyst, Aleksandra Bosnjak, said VoD isn't a revenue generator at the moment but it is a 'must have' vision of the future in terms of both cash flow and telcos' content business survival. "From a content provider's perspective, telcos and ISPs will be the new contributors to content distribution and film finance, especially over the long term as the service improves and reaches a more significant scale and enhances its on-demand functionalities," Bosnjak said. Telcos are facing competition from all kinds of players - from old pay TV media to new digital distribution entrants - and the pressures of network convergence. With this in mind, Bosnjak believes that over the next five years, 50 percent of telcos' costs will come from content acquisition and related activities.

Ovum's view is that a careful content strategy and locally adapted VoD proposition will be a major driver of telco VoD service revenues, now estimated to comprise one third of the whole VoD revenue pie, depending on the country.

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