By Vladimir Kozlov, Founder and CEO, LightCounting Market Research
At the start of a busy week, Oclaro Inc. (OCLR) announced Monday morning that it has agreed to be acquired by Lumentum Holdings Inc. for $5.60 in cash per Oclaro share and 0.0636 of a share of Lumentum common stock. The transaction is valued at approximately $1.8 billion.
"Oclaro brings its leading indium phosphide laser and photonic integrated circuit and coherent component and module capabilities to Lumentum," said Alan Lowe, Lumentum's CEO, in a release. "The combined company will drive innovation faster and accelerate the development of products to enable our customers to win."
Nokia’s announcement of its Photonic Service Engine 3 (PSE-3) coherent chipset literally pushes optical transport technology to the Shannon Limit (the theoretical maximum capacity of optical fiber). This is potentially very good news for fiber manufacturers: network operators will have to deploy more fiber to increase bandwidth, once all the networks are running on PSE-3. However, this may take a few years, after PSE-3 becomes available across Nokia’s packet-optical portfolio in Q3 2018. Also, the little-used L-band is attracting more attention now.
Nokia’s PSE-3 enables transporting data at rates up to 600Gbps per wavelength and is the first coherent digital signal processor to implement probabilistic constellation shaping – one more trick to extract data from noisy optical signals and improve spectral efficiency.
Cisco, Coriant and Infinera also announced new solutions supporting 600Gbps per wavelength transmission. Coriant is relying on Acacia’s DSP and silicon photonics technology to reach 600G. Infinera is pushing the performance of its InP integrated chips to new limits and described even higher 1.2Tbps per wavelength capabilities in research publications. However, moving from 600G to 1.2Tbps does not improve spectral efficiency or the maximum capacity of optical fiber anymore.
Current solutions for DWDM transport rely on 100Gbps and 200Gbps per wavelength optics. Ciena started shipping 400Gbps per wavelength solutions in the second half of 2017. Huawei is starting to ship similar optics now. Collectively, Ciena and Huawei, shipped more than 50% of all 100G/200G/400G ports in 2017, when counted in 100G port equivalents. Having such strong positions in the market, neither Ciena nor Huawei are in a rush to introduce 600Gbps optics. The pricing of DWDM ports is very competitive and customers are getting used to having higher speed optics for the cost of legacy ports. LightCounting estimates that DWDM port shipments increased by 40% in 2017, but the revenues of suppliers were flat.
Investments into 600Gbps per wavelength technology are significant, but it is the price suppliers have to pay to stay in the game, maintain their market share, or even hopefully, win some additional market share. The race to higher data rates per wavelength is reaching its limit, but there are many other dimensions for vendors to compete in. CSPs and ICPs are looking for help in managing complex networks, enabling new services on the fly, and getting DWDM transport solutions adapted for connections to datacenters, cable and wireless networks. We will see more new product announcements at OFC 2018 along these lines; it is not all about the data rate.
Posted: 12 March 2018 by
Vladimir Kozlov, Founder and CEO, LightCounting Market Research
| with 0 comments