Optical Transport Network - Top wireline technologies in 2013

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What is it? Optical transport networking (OTN), like many of the other technologies on our list, takes off where a much older technology, SONET, left off.

OTN is a collection of Optical Network Elements (ONE) connected by fiber links that are able to provide various functions, including transport, multiplexing, switching, and management of optical channels carrying end-user traffic.

For traditional telcos, it provides everything that they know and love about SONET, including Operations Administration Maintenance and Provisioning (OAM&P), but with the higher bandwidth capabilities of DWDM.

Sometimes referred to as the "digital wrapper," OTN is a is a method for encapsulating an existing frame of data, regardless of the native protocol, to create an optical data unit (ODU) similar to what existed in SDH/SONET. Two of the International Telecommunication Union (ITU) key standards relevant to OTN are: G.878, which specifies OTN architecture, and G.709, which defines the frame format and payload mapping for carrying Ethernet, storage and SONET/SDH signals.

Why is it important? Optical transport network (OTN) switching may still be a minority part of the overall OTN market, but a recent Infonetics report forecasts that the OTN market, including both transport and switching, will grow at a 13 percent compound annual growth rate through 2016. The research firm expects OTN vendor revenue to total $7 billion, or 65 percent of all optical equipment spending.

An earlier Infonetics report said that while wavelength efficiency was a key OTN application, "service providers are rolling out more sophisticated management control planes as part of OTN switching deployments."

Service providers are using OTN in their metro networks and long-haul networks as they migrate from SONET/SDH to WDM. Verizon (NYSE: VZ), for instance, is deploying Ciena's 5430 Reconfigurable Switching System, a packet optical transport system (P-OTS)--a device that includes OTN (Optical Transport Network) aggregation and switching to extend control plane technology--in the United States—as part of its ongoing 100G optical rollout.

At a time when service providers are looking to expand their metro networks to support higher demands of their business customers and backhaul their consumer traffic, having a common architecture that can support multiple traffic types with a more flexible architecture OTN is going to fit that bill. With more service providers turning to OTN, the vendor community will also have new opportunities to pursue.