Worldwide wavelength service revenue to top $3 billion by 2005

Wavelength services using DWDM as an alternative to SONET-based private lines are forecast to grow from $1 billion worldwide this year to more than $3.3 billion in 2005.

Wavelength or ‘lambda’ services using dense wave division multiplexing (DWDM) as an alternative to structured high-capacity SONET-based private lines are forecast to grow from $1 billion worldwide this year to more than $3.3 billion in 2005, according to Dataquest, a unit of Gartner.

Wavelength growth has been powered by the worldwide expansion of bandwidth demand, including for the Internet and Internet Protocol (IP), dramatic increases in WAN and LAN traffic, computer data centers, storage area networks (SANs), new optical services such as public Ethernet.

The globalisation of businesses and the former regional carriers that serve them is another crucial market driver.

‘Wavelength services are a rapidly growing alternative to structured high-end SONET-based private lines as well as dark fibre,’ said Steve Koppman, senior analyst for Gartner Dataquest’s Telecommunications and Networking group.

‘While at least half wave revenue today is carrier wholesale and at least half the remainder sales to ISPs, enterprise retail will grow over the next few years, approaching or exceeding 20 percent of the market.’ Wavelengths have a number of potential advantages over both conventional private line and unlit ‘dark fibre.’ Long-haul waves are sold primarily on an ‘unprotected’ basis, allowing customers lower prices than conventional private line while waves are at the same time typically more economical than bringing up a business customer’s own national or international dark fibre network.

Wavelengths can also mean more available carrier bandwidth supply, faster provisioning and greater flexibility, scalability and protocol independence.

They will tend to facilitate deployment of new optical technologies like public Ethernet in long-haul and metropolitan networks, though at least in the near term, the economic case for waves is not as strong in the metro as the long-haul.

Additional information is available in the Gartner Dataquest Perspective ‘Lambdas Worldwide: The New ‘Wave’ in Dedicated Services.’

This market analysis examines the advantages and problems of wavelength services and provides a worldwide forecast by region.

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