WAITING FOR THE WAVE TO CREST

Telecom has turned into a complex game in which service providers must leverage their existing assets and fixed overhead. Wavelength services promise to accomplish both, especially because of the high margins they offer carriers. However, providers aren't exactly rushing to offer them.

Problem is, most customers simply aren't biting on wavelength services, at least not on a broad basis.

“With a few exceptions, wavelength services have stalled,” said Karl Toompuu, director of product line management at long-haul optical start-up Ceyba.

Because of that slow adoption and low take rate, providers aren't likely to build out or completely overhaul their networks just so they can offer wavelength services. “Realistically, no one could go and present a business case for wavelength services [alone],” Toompuu said.

So what's the holdup? For starters, the industry downturn stalled wavelength services adoption just as it was starting to take hold. That has been compounded by other factors such as concerns over service provider longevity and debates over the need for so much capacity. Now, no matter how easy wavelength services are to implement or what benefits they offer, with customer demand so low, mass adoption isn't likely to happen soon.

Simply put, wavelength services should be the icing on the cake. They are cheap and easy to implement for service providers that have already incurred the expense of building out and lighting fiber optic networks.

“People are much more financially driven now,” said Sunit Patel, chief financial officer at metro service provider Looking Glass Networks. That in turn may drive some to wavelength services, Patel said.

The margins for wavelength services are good, according to Danny Bottoms, CEO of OnFiber Communications, a metro optical service provider. “Wavelengths are our best-selling product,” Bottoms said. However, he acknowledged that confusion surrounding wavelength services still exists, which has been part of the reason for their slow adoption (see sidebar below).

The slow economy has also contributed. “The meltdown disrupted the adoption of [wavelength services],” said Brian Van Steen, a senior analyst with PointEast Research. But despite their slow start, there is definitely a market for such services in the future, he added.

Essentially, wavelength service consists of an unprotected 2.5 Gb/s or 10 Gb/s wavelength that a provider can sell to enterprises or another provider. “Unprotected wavelengths are cheaper to offer and customers get more bandwidth for less price,” Patel said. “They don't get the backup, but for a lot of applications, they don't need it anyway.”

Customers typically use protected lines when they transport voice traffic, but other applications such as data traffic don't need that protection. A wavelength service is also protocol-agnostic, making it applicable for both long-haul and metro applications because traffic can be aggregated to better utilize the bandwidth.

When a provider signs on a new customer, it assigns a particular wavelength or multiple wavelengths to that customer and runs a connection to the customer premises if necessary.

One advantage to wavelength services is their quick turn-up time. Where a link is already installed to a customer, wavelength service can be turned up in less than 10 days, according to Tim Johnson, vice president of engineering at service provider Progress Telecom.

Other providers such as Broadwing Communications have also boasted of remarkably short turn-up times. Those low numbers contrast greatly to competitive options such as lighting dark fiber or setting up private lines.

Even though the market may turn around and boost wavelength services usage, some feel it's cheaper to take other routes. Fiber is so inexpensive and equipment costs have come down so much that it's often more economical to build an OC-192 than lease an OC-48, according to Paul Haddad, director of optical marketing at Nortel Networks.

“You can go and deploy your own lambda at better economics than leasing,” Haddad said. “Twelve to 18 months ago it was the opposite.”

Some providers such as Broadwing take issue with that stance. “It's more economical to lease,” said Jamey Heinze, director of optical services for Broadwing.

But for many customers, the need to take on a 2.5 Gb/s or 10 Gb/s fiber is just too much. “We are seeing little demand for customers wanting to buy wavelength services,” said Paul Montahan, product marketing manager at U.K.-based service provider Neos Communications, which primarily sells Ethernet services over wavelengths. “2.5 or 10 Gb/s is a lot more bandwidth than they need. They want megabits, tens of megabits or hundreds of megabits.”

Haddad said those issues are compounded by fears of carrier viability and full service transparency. If a customer has a wavelength from only one provider, that transparency is easy to accomplish. It's when multiple providers become involved that the real headaches turn up, he said.

However, most agree that the technological and image problems associated with wavelength services aren't as much of an issue as the market dynamics.

When those dynamics will change remains a big question. But even in the last 45 days, Progress Telecom has seen a lot more interest in the wavelength services, Johnson said. “A lot are still just shopping, but the interest is there,” he said.

Plus, people need to remember that the slow adoption of wavelength services isn't an indication of their viability, said PointEast's Van Steen. After all, many potential users of wavelength services have simply disappeared.

DIFFICULT TO DEFINE

Even though wavelength services have been around for some time, a cloud of confusion has kept such services from mass adoption, according to many.

“For a lot of people, the hardest thing was figuring out what the definition of a wavelength service was,” said Karl Toompuu, director of product line management at Ceyba.

For starters, many marketing initiatives called everything a wavelength service. Providers would offer basic Sonet service, but because they were doing it over a wavelength it instantly became a “wavelength service.”

To confuse things even more, wavelength services can come in three flavors: unprotected, line-side protected and fully protected (see box). Unlike private-line services, which are run over a protected Sonet OC-48 or OC-192 ring, wavelength services are unprotected and carry 2.5 Gb/s or 10 Gb/s of capacity.

“There's an education curve, but the confusion in the market is getting better,” said Danny Bottoms, CEO of service provider OnFiber Communications. “As more people understand what they are, usage will go up.”

Tim Johnson, vice president of engineering at Progress Telecom, agreed. “A lot of people don't understand the savings they can get and how efficient they are,” he said, pointing to the ease with which changes can be made to wavelength services.

Indeed, some believe that confusion can be cleared up quickly once the facts about wavelength services are laid out. “The granularity of the definition is much better now and very well defined,” said Sunit Patel, chief financial officer at provider Looking Glass Networks.
— Liane H. LaBarba

THREE PROTECTION SCHEMES

• Unprotected:

  Both line side and client side of the circuit are unprotected.

• Line-side protected:

  Line side of circuit is protected; customer side is not.

• Fully protected:

  Both line side and client side of circuit are protected.