The status of silicon photonics - an ECOC interview
Daryl Inniss and I being interviewed at ECOC by Adtran’s Gareth Spence about the state of silicon photonics.
Click here for the interview.
Fibre to everywhere
For years, passive optical networks (PON) were all about fibre-to-the-premise, particularly fibre-to-the-home. Japan, South Korea, and China led the market with massive PON deployments.
“Now the focus is on fibre-to-everywhere, whether it’s a home, a business, a school, a university, an enterprise, a traffic light,” says Julie Kunstler, chief analyst, broadband access intelligence at Omdia.
Meanwhile, in the US, government funding is spurring fibre deployments, especially in underserved areas.
PON usage
Omdia conducted a 25-gigabit and 50-gigabit PON survey (see chart above) earlier this year that included basic questions such as how operators use PON infrastructure.
Many service providers use PON for other applications besides residential services to grow revenues.
“There are a good number of operators that are using that same PON infrastructure for business services, especially with XGS-PON 10-Gigabit PON,” says Kunstler. “A symmetrical 2-gigabit, 5-gigabit, 8-gigabit link is certainly enough for many small and medium-sized businesses.”
This requires the operator to undertake software integration involving the operations support system (OSS) and business support system (BSS) to manage subscriptions and billing for the two classes of customers.
The survey also highlighted PON being used for transport, not just wireless backhaul but traffic aggregation. “Once you have XGS-PON in place, you have a lot of capability to haul data around,” says Kunstler.
Vendors have responded with more varied equipment, not just PON optical line terminals (OLTs) for the central office.
For the central office, a key driver has been to reduce the space a PON chassis occupies, requiring denser line cards and port densities per line card. But OLTs are also being deployed in the field that support residential users and other applications with requirements such as low latency.
Government funding
Funding for broadband in the US, Europe, and the UK have increased since Covid, highlighting its crucial role.
“It [Covid] created two classes of people, those that could participate in the remote hybrid work environment, and those that could not,” says Robert Conger, senior vice president of technology and strategy at Adtran.
Conger stresses there has always been government funding for broadband, but it was a fraction of what is now being earmarked.
In the US, two significant funds have been added to the Rural Digital Opportunity Fund (RDOF), the Federal Communications Commission initiative that existed before Covid. RDOF is a $20.8 billion programme funded in two phases.
The two significant new funds are the American Rescue Plan, a $25 billion to invest in affordable high-speed internet and connectivity and the $42.5 billion for deployments in underserved areas, known as the Broadband Equity, Access, and Deployment (BEAD) programme.
“The funding will find its way into the service providers’ hands late next year, while 2025 and 2026 will be the big years,” says Conger.
The European Union (EU), comprising 27 member countries, has defined broadband as an essential service for its citizens, like electricity and water. The EU’s goal is to offer complete coverage (100 megabit-per-sec) in rural areas by 2025, while by 2030, the goal is to deliver a gigabit network to all EU households.
In Italy, for example, the plan was to spend 3% ($8.3 billion) of an EU emergency package on broadband, 5G and satellite infrastructure. The EU package was awarded in 2021 to aid Italy’s recovery following Covid.
Meanwhile, the UK government has the £5 billion ($6.4 billion) Project Gigabit to provide broadband to rural areas currently ignored by the CSPs.
These fundings enable operators to deploy ‘fibre all the way’ and use the infrastructure for applications alongside residential services. Indeed, the funds can be seen as a one-off subsidy enabling fibre deployments in regions previously ignored by operators due to the lack of a viable business case.
Broadband solutions
The US broadband funding has also grown the PON vendor landscape and diversity of solutions, says Kunstler.
PON equipment can be added to switches and routers and to digital nodes being deployed by cable operators. Such equipment enables the operators to make pointed PON deployments, which Kunstler calls ‘surgical PON’. This allows an operator to deploy quickly to benefit from regions where a quicker uptake is expected or to respond to competition.
“We’re seeing that type of surgical approach being done by the larger US cable operators and by several telcos,” she says.
Such cable operators have already invested heavily in their networks, and with the deployment of DOCSIS 3.1 technology, their coax networks continue to support increased broadband speeds. But such cable operators can now add PON selectively where there is more demand or competition.
Equally, the US has many small cable operators with pockets of subscribers, each with typically several thousand consumers. Instead of upgrading to DOCSIS 3.1 running over their coax cable assets, small operators may decide to go to fibre and use PON to serve such users.
Another broadband technology suited to more remote deployments is fixed wireless access. To date, fixed wireless access remains the most successful 5G business case in generating new revenues for an operator.
Fixed wireless access’s issue, says Kunstler, is that it is not the best use of finite spectrum, and the service has experienced consumer churn as the quality of experience decreases as more subscribers join.
However, Omdia does see the value of fixed wireless access for some rural regions and urban neighbourhoods.
25G and 50G PON
A key advantage of fibre is its ability to support bandwidth increases. “You can easily increase your bandwidth over fibre by changing out the GPON for XGS-PON or, in the future, 25-gigabit or 50-gigabit PON and whatever comes after that,” says Kunstler.
A benefit of PON is that such upgrades can be done without touching the optical distribution plant.
The cost of customer premise equipment has also come down such that several US operators are deploying fibre and XGS-PON or 10G-EPON with 10-gigabit endpoints because it costs less than doing a truck roll when the customer eventually upgrades.
“We are seeing a very strong appetite for 1 gigabit and multi-gigabit services,” says Kunstler. A multi-gigabit service to the home only costs a few dollars more, and no household users complain when there is ample bandwidth to be shared.
Another factor is energy savings for the operator. XGS-PON has a 4x bandwidth increase on GPON but doesn’t consume 4x the power.
Meanwhile, Adtran’s Conger believes that a lot of fibre will be put into the ground in the US over five years, involving many smaller operators.
Conger’s parents live in a rural area of the US and do not have broadband, but at last, a local utility is installing fibre. “They will have it soon, so it [the government programme] is having an impact,” he says.
ADVA Optical Engines adds bidirectional multiplexing
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ADVA expands its multiplexing modules to include the network edge
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The company is developing optical modules as part of a three-pillar business strategy
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ADVA’s merger with ADTRAN is approaching its conclusion
ADVA has expanded its family of multiplexing optical modules with a 40km bidirectional design for access networks.
Until now, ADVA’s three multiplexer optical module products have focussed on IP routing and switching.
The multiplexing modules combine lower-speed optical interfaces into a higher-speed port.
The company unveiled its 4-by-10-gigabit MicroMux Edge BiDi, its first multiplexer module for the network edge, at the OFC show held in March in San Diego.
ADVA Optical Engines
As the capacity of switching and routing equipment increases, so does the speed of the electrical serialiser/ deserialiser (serdes) interface. What was at 10 gigabits is now at 50 and 100 gigabits. Yet legacy 1-gigabit and 10-gigabit streams remain.
“You need to find a way to support these legacy services while your network capacity goes up,” says Saeid Aramideh, vice president of business development at Optical Engines, ADVA. “So you need a multiplexing solution.”
Aramideh joined ADVA after working at firms CoreOptics, acquired by Cisco Systems in 2010, and then Ranovus. He mentions how, at an analyst presentation day, the CEO of ADVA, Brian Protiva, detailed three focus areas: entering non-telecom markets, software services, and becoming a more vertically integrated company.
“That includes differentiated products, products that don’t exist in the industry, based on ADVA’s IP (intellectual property),” says Aramideh.
The IP covers lasers, silicon photonics, software, and integration. ADVA aims to make industry solutions that customers can’t get elsewhere.
ADVA will also make products that do exist in the marketplace in order to ensure security of supply for its customers while enabling ADVA to reduce its product costs.
“That is the spirit of the business unit that we call ADVA Optical Engines,” says Aramideh.
MicroMux product family
The advantage of fitting the multiplexing within a module is that there is no need for additional networking equipment or a multiplexing line card.
“There is nothing as good as a module that does muxing because the solution has zero-footprint,” says Aramideh. “There is a network element already there; just plug the module in and do the muxing.”
ADVA’s first multiplexing module product is the MicroMux, a 10-by-10-gigabit QSFP28 optical interface feeding into a 100-gigabit port.
The MicroMux has multi-mode and 10km single-mode variants. “Over 10,000 units are in deployment with probably one of the largest IP router companies out there, carrying traffic in the network,” says Aramideh.
ADVA has also developed the MicroMux Nano, a 10-by-1-gigabit design in an SFP+ pluggable that supports single-mode and multi-mode fibre.
The MicroMux Quattro addresses 400 gigabits. Here, a QSFP-DD module multiplexes four 100-gigabit optical streams.
As well as the -SR4 interface, the Quattro multiplexes 100-gigabit CWDM-4 and LR4. “Those are the two categories that don’t exist in the marketplace, so the product is unique,” says Aramideh.
MicroMux Edge BiDi
At OFC, ADVA announced its first access product, the 4-by-10-gigabit MicroMux Edge BiDi with a 40km reach, to address fixed and wireless traffic for consumers and enterprises.
One fibre sends and receives data in a bidirectional (BiDi) design. Data is transmitted using two wavelengths: 1270nm and 1330nm. Bidirectional communication benefits areas of the network where fibre is scarce.
The Micromux Edge Bidi supports four individual 10-gigabit optical channels multiplexed in the QSFP+ module, a single fibre carrying each stream.
An example application is sending 10-gigabit traffic between a wireless antenna site to a central office. “This is one connection on a single fibre, and four fibres are coming into the module,” says Aramideh.
Another benefit of using fibre for two-way communications is that latency is symmetrical.
This benefits applications where avoiding added latency is essential.
Mobile networks, especially in the fronthaul, need precise timing references for the radio heads for coordinated multi-point solutions. If the signals up and down travel on the same fiber, the dynamic delay variations are fewer. CIPRI fronthaul, for example, requires nanosecond accuracy and a single fibre is a solution of choice.
“As you start going into more enterprise applications, this becomes more and more important,” says Aramideh. “Some applications are susceptible to this.”
ADVA says one carrier customer for its edge multiplexer will start deployments this year.
Optical component innovation
The multiplexing products use ADVA’s vertical integration IP including laser and IC technologies.
ADVA has developed a multi-link gearbox chip based on OIF standards, for example, to enable aggregation of lower-speed data rates.
“We are working with a partner on the packaging capabilities to reduce that massive number of lasers and detectors into small form factors,” says Aramideh. “So there is a lot of innovation from an optical components perspective.”
ADTRAN merger
ADTRAN and ADVA announced their intention to merge in August last year.
Adtran’s shareholders have since approved the deal as have ADVA’s.
The deal has also gained UK approval and now requires the same in Germany.
Α closing date will then be set.
ADTRAN-ADVA's metro-access play
ADTRAN and ADVA have agreed to merge after a long courtship.
The two CEOs have spoken regularly over the years but several developments spurred them to act.
The merger combines ADTRAN’s expertise in access technologies with ADVA’s metro wavelength-division multiplexing (WDM) know-how to create a ‘metro-core-to-door’ company with revenues of $1.2 billion.
ADTRAN and ADVA a better path forward together than separately
As such, the merger promises to double their size and networking skills. Yet the stock market appeared underwhelmed by the announcement, with ADTRAN’s shares down 16% for the rest of the week after the deal was announced.
Market research analysts, however, are more upbeat.
“ADTRAN and ADVA have a better path forward together than separately,” said John Lively, principal analyst at LightCounting Market Research, in a research note.
The deal is expected to close in the second or third quarter of 2022 but only after several hurdles are overcome in what is described as a complex deal.
Motivation
The two companies describe the merger as a logical outcome given recent developments in the marketplace.
“Our combination will make us one of the largest Western suppliers for the markets we serve,” said Tom Stanton, CEO and chairman of ADTRAN, on the call announcing the deal. The word “Western” is noteworthy, reflecting how geopolitics is one catalyst motivating the merger.
The deal will also reposition the two companies with their rivals. ADTRAN will distance itself from broadband competitors such as Calix while ADVA will diversify its business from its current larger competitors, Ciena and Infinera. The new company’s revenues will also approach those of the two players.
The product portfolios of ADTRAN and ADVA have almost no overlap. ADTRAN offers fibre access and connectivity solutions while ADVA addresses metro WDM, data centre interconnect, business Ethernet, network synchronisation and network functions virtualisation (NFV) expertise.
Once combined, each company will seek to expand its sales in the other’s main market.
The US accounts for 74 per cent of ADTRAN’s revenues, while Europe accounts for 21 per cent. Meanwhile, Europe accounts for 62 per cent of ADVA’s business while the US is 29 per cent. The remaining revenues come from the Asia Pacific: ADTRAN, 5 per cent, and ADVA, 9 per cent.
Also cited as a factor is the wave of investment in fibre, not just by communications service providers (CSPs) and public utilities but also government-backed stimulus plans in the US and Europe.
In the US, $66 billion in investment was mentioned spread across programmes such as the infrastructure bill, the second phase of the Rural Digital Opportunity Fund (RDOF), and state-level funding for high-speed broadband.
In Europe, the sum is similar: $35 billion in government funding for high-speed broadband in the European Union, and $30 billion in public and private funding for fibre builds in the UK alone.
“There is an ongoing global fibre investment opportunity that we believe will create sustained momentum for years to come,” said Stanton.
Moreover, having access and second-mile technologies, the new company can better win business. “There is not a customer that we sell to today that, when they are upgrading their access infrastructure, is not also upgrading their middle-mile,” said Stanton.
Becoming a larger player will help, he said: “We see our customers making a significant capital investment to transition their supply chain to trusted vendors.”
Another merger catalyst is the opportunity created by US and European service providers that no longer use Chinese vendors and in some cases are replacing equipment already deployed.
In the US, this is less of an issue due to the fewer deployments while in Europe the process started 18 months ago. Stanton expects Latin America to follow.
“The market opportunity is not just created by all the stimulus but it is also because of the displacement of Eastern vendors,” said Stanton.
There is a land grab going on, he says, and the company that gets there first wins.
“Once you get entrenched in a carrier, regardless of size – the larger ones tend to have two [vendors] and the smaller ones, one – once you are entrenched, it is very difficult to get pulled out,” said Stanton.
Analysis
LightCounting’s view of the merger is positive.
Lively says the merger will not reshape the optical networking industry but it will be attractive to Tier 2 and Tier 3 CSPs that want to buy access and aggregation equipment from a single supplier.
LightCounting notes that the deal values ADVA at $931 million, 1.3x its most recent four quarters of sales.
This is a relatively low valuation: the 2015 Infinera-Transmode merger was 2.6x while the Cisco-Acacia Communications deal, which closed earlier this year, was 7.7x. Of recent deals, only the 2020 Ribbon-ECI Telecom deal was lower, at 1.2x.
LightCounting says one reason for the lower valuation could be ADVA’s port shipments; the vendor is one of the smallest dense WDM suppliers.
The merger’s impact will mostly be felt by the competitors of the existing two companies, says Lively. The new ADTRAN’s sales will be 20 per cent greater than Infinera but still a third of the size of Fiberhome and Ciena.
The importance of size is something both companies stress.
“Our industry has been consolidating and there is an underlying notion that scale matters,” says Stephan Rettenberger, senior vice president, marketing and investor relations at ADVA.
Doubling in size, the new company will be in the same bracket as Infinera while Ciena will be about 3x its size, notes Rettenberger: “The companies that we used to worry about the most are not as distant as before.”
At first glance, the merger between a US and an European company raises questions about the integration challenge. But both firms have American CEOs and both have operations in the US and Germany.
ADTRAN acquired Nokia Siemens Networks’ fixed-line broadband access unit in 2011 while ADVA more recently acquired US firms, MRV Communications and Overture.
Brian Protiva, CEO of ADVA and a co-founder of the company in 1994, is the longest-serving CEO in the optical industry. As such he will have thought long and hard about the deal.
“This business combination is not only about growing the business,” says Protiva. “These two businesses fit perfectly together to address existing market and technology requirements, and we are well-positioned to lead the transition to access and edge convergence.”
Service providers do not need separate infrastructure for business services, residential broadband, and/ or 5G xHauling, he says.
Mechanics
The proposed deal is an all-stock one with ADTRAN and ADVA combining to form ADTRAN Holdings.
Each ADVA share will be swapped for 0.8244 shares of the new company while ADTRAN shares will be exchanged on a one-for-one basis. ADTRAN shareholders will own 54 per cent of the combined company while ADVA shareholders will own 46 per cent, assuming all of the ADVA shares are swapped.
But the new holding company must first be approved by German regulators, expected to occur by November. A three-month offer period then starts during which a minimum of 70 per cent of ADVA shares must be surrendered.
Stanton will continue as CEO and chairman at the new company while ADVA’s Protiva will join as executive vice chairman.
“I’m convinced that Tom is the right person to run the combined company,” says Protiva. “He executes to plan, is well-liked by customers, and thinks very similarly to our ADVA leadership around people first and the customer experience.” Stanton is also a long-serving CEO, heading ADTRAN since 2005.
Protiva will support Stanton during the integration period and then be involved in the corporate strategic direction of ADTRAN, as a board member, using his many long-term relationships in the combined markets.
After that, Protiva says he may return to Egora, a holding company out of which ADVA was born.
ADVA’s CTO, Christoph Glingener, will retain his role with the new company. ADTRAN and ADVA will have a combined annual R&D budget of $250 million.
”The stock exchange offer needs to pass all types of regulatory groups and needs to be accepted by the ADTRAN and ADVA shareholders,” stresses Rettenberger. “There is still a long path to closing.”
Sckipio’s G.fast silicon to enable gigabit services
Sckipio’s newest G.fast broadband chipset family delivers 1.2 gigabits of aggregate bandwidth over 100m of telephone wire.
The start-up’s SCK-23000 chipset family implements the ITU’s G.fast Amendment 3 212a profile. The profile doubles the spectrum used from G.fast from 106MHz to 212MHz, boosting the broadband rates. In contrast, VDSL2 digital subscriber line technology uses 17MHz of spectrum only.
“What the telcos want is gigabit services,” says Michael Weissman, vice president of marketing at Sckipio. “This second-generation [chipset family] allows that.”
G.fast market
AT&T announced in August that it is rolling out G.fast technology in 22 metro regions in the US. The operator already offers G.fast to multi-dwelling units in eight of these metro regions. The rollout adds to the broadband services AT&T offers in 21 states.
AT&T’s purchase of DirecTV in 2015 has given the operator some 20 million coax lines, says Weissman. AT&T can now deliver broadband services to apartments that have the DirecTV satellite service by bringing a connection to the building’s roof. AT&T will deliver such connections using its own fibre or by partnering with an incumbent operator. Once connected, high-speed internet using G.fast can then be delivered over the coax cable, a superior medium compared to telephony wiring.
Michael Weissman“This is fundamentally going to change the game,” says Weissman. “AT&T can now compete with cable companies and incumbent operators in markets it couldn’t address before.”
Sckipio has secured four out of the top five telcos in the US that have chosen to do G.fast: AT&T, CenturyLink, Windstream and Frontier. “The two largest - AT&T and CenturyLink - are exclusively ours,” says Weissman.
In markets such as China, the focus is on fibre. The three largest Chinese operators had deployed some 260 million fibre-to-the-home (FTTH) lines by the end of July.
Overall, Sckipio is involved in some 100 G.fast pilots worldwide. The start-up is also the sole supplier of G.fast silicon to broadband vendor Calix and one of two suppliers to Adtran.
“Right now there are only two real deployments that are publicly announced - and I mean deployment volumes - AT&T and BT,” says Weissman. “The point is G.fast is real.”
Telcos have several requirements when it comes to G.fast deployment. One is that the technology delivers competitive broadband rates and that means gigabit services. Another is coverage: the ability to serve as high a percentage of customers as possible in a given region.
What the telcos want is gigabit services. This second-generation [chipset family] allows that.
Because G.fast works across the broader spectrum - 212MHz - advanced signal processing techniques are required to make the technology work. Known as vectoring, the signal processing technique rejects crosstalk - leaking signals - between the telephone wires at the distribution point. A further operator need is ‘vectoring density’, the ability to vector as many lines as possible.
It is these and other requirements that Sckipio has set out to address with its SCK-23000 chipset family.
SCK-23000 chipset
The SCK-23000 comprises two chipsets. One is the 8-port DP23000 chipset used at the distribution point unit (DPU) while the second chipset is the CP23000, used for customer premise equipment.
Sckipio is not saying what CMOS process is used to implement the chipsets. Nor will it say how many chips make up each of the chipsets.
As for performance, the chipsets enable an aggregate line-rate performance (downstream and upstream) of 1.7 gigabits-per-second (Gbps) over 50m, to 0.4Gbps over 300m. The DP23000 chipset also supports two bonded telephone lines, effectively doubling the line rate. In markets such as the US and Taiwan, a second wire pair to a home is common.
Vectoring density
Vectoring density dictates how many G.fast ports can be deployed as a distribution point. And the computationally-intensive task is even more demanding with the adoption of the 212a profile. “The larger the vector group, the more each subscriber’s line must know what every other subscriber’s signal is to manage the crosstalk - and you are doing it at twice the bandwidth,” says Weissman.
Sckipio says the SCK-23000 supports up to 96 ports (or 48 bonded ports) at the 212a profile. The design uses distributed parallel processing that spreads the vectoring computation among the DP23000 8-port devices used. “We are not specifying data paths between the chips but you are talking about gigabytes of traffic flowing in all directions, all of the time,” says Weissman.
The computation can not only be spread across the devices in a single distribution point box but across devices in different boxes. Operators can thus use a pay-as-you-grow model, adding a new box as required. “A 96-port design could be two 48-port boxes, or an 8-port box could [be combined to] become a 16- or 24-port design if you have a smaller multi-dwelling unit environment,” says Weissman.
Sckipio’s design also features a reverse power feed: power is fed to the distribution point to avoid having to install a costly power supply. Since the power must come from a subscriber, the box’s power demand must not be excessive. A 16-port box is a good compromise in that it is not too large and as subscriber-count grows, each new 16-port unit added can be powered by another consumer.
“You can only do that if you can do cross distribution-point-unit vectoring,” says Weissman. “It allows the telcos to do a reverse power feed at the densities they require.”
Dynamic bandwidth allocation
The chipsets also support co-ordinated dynamic bandwidth allocation, what Sckipio refers to as co-ordinated dynamic time assignment.
Unlike DSL where the spectrum is split between upstream and downstream traffic, G.fast partitions the two streams in time: the CPE chipset is either uploading or downloading traffic only.
Until now, an operator will preset a fixed upload-download ratio at installation. Now, with the latest silicon, dynamic bandwidth allocation can take place. The system assesses the changing usage of subscribers and adjusts the upload-download ratio accordingly. However, this must be co-ordinated across all users such that they all send and all receive data simultaneously.
“You can’t, under any circumstances, have lines uploading and downloading at the same time,” says Weissman. “All the systems that are vectored must be communicating in the same direction at the same time.” If they are not co-ordinated, crosstalk occurs. This is another crosstalk, in addition to the crosstalk caused by the adjacency of the telephone wires that is compensated for using vectoring.
“If you don’t co-ordinate across all the pairs, you create a different type of crosstalk which you can’t mitigate,” says Weissman. “This will kill the system.”
Sckipio says the SCK-23000 chipsets are already with customers and that the devices are generally available.