Lowering the Cost per Bit in Access Networks: A Guide

Introduction

In the world of telecommunications, service providers face a fundamental challenge. Network traffic is growing exponentially, fueled by streaming services, cloud computing, and the ever-increasing number of connected devices. However, operator revenues are not increasing at the same steep rate. This disconnect means that network operators cannot allow their infrastructure spending to grow in lockstep with traffic demands, as depicted in Figure 1.

Figure 1. Graphical depiction of the fundamental telecommunications cost problem. Traffic volume increases exponentially, but operator revenues do not. Therefore, operators cannot allow their costs to increase exponentially to meet the traffic demand.

Reducing the cost per bit transmitted is therefore a fundamental mandate for telecommunication providers. This objective takes on added importance in access networks, where end-users connect to the main network. These networks are the final link in the data delivery chain and are expensive to upgrade and maintain due to the sheer volume of equipment required to reach each customer.

EFFECT Photonics, a leading provider of optical solutions, is on a mission to leverage its technology to reduce the cost per bit in access networks. This article will explore three key pillars that can help achieve this goal: manufacturing at scale, photonic integration for power savings, and Dense Wavelength Division Multiplexing (DWDM).

Manufacturing at Scale

The rise of integrated photonics has revolutionized the deployment of optical technology. Previously, installing optical links required investing in large and expensive transponder equipment on both sides. Integrated photonics has reduced the footprint, energy consumption, and cost of coherent transceivers.

Crucially, the economics of scale principles that rule the semiconductor industry also apply to optical chips and transceivers. The more optical components that can be integrated into a single chip, and the more optical System-on-Chip (SoC) devices that can fit on a single wafer, the lower the cost of each component becomes.

Researchers at the Technical University of Eindhoven and the JePPIX consortium have modeled this effect, as shown in Figure 2. If production volumes can increase from a few thousand chips per year to a few million, the price per optical chip can plummet from thousands of Euros to mere tens of Euros.

Figure 2: Modelling of photonic integrated chip (PIC) cost as a function of aggregate number of PICs produced per year. Exponential increases in production lead to an exponential decrease in cost. Source: Model and graph provided by Prof. Meint Smit, TU Eindhoven.

Furthermore, by integrating all optical components on a single chip, the complexity shifts from the assembly process to the much more efficient and scalable semiconductor wafer process. Assembling and packaging a device by interconnecting multiple photonic chips increases complexity and costs. In contrast, combining and aligning optical components on a wafer at high volume is much easier, driving down device costs.

Integration Saves Power (and Energy)

Data centers and 5G networks may be hot commodities, but the infrastructure that enables them runs even hotter. Electronic equipment generates substantial heat, and the more heat energy an electronic device dissipates, the more money and energy must be spent to cool it down.

These issues not only affect the environment but also the bottom lines of communications companies. With the exponential growth of traffic and the deployment of 5G networks, cooling costs will increase even further. Integration is vital to reducing this heat dissipation and associated costs.

Photonics and optics are following a similar blueprint to the electronics industry, improving integration to reduce power consumption and cooling expenses. For example, over the last decade, coherent optical systems have been miniaturized from large, expensive line cards to small pluggables the size of a large USB stick.

Figure 3: Coherent module size and power consumption evolution from OIF MSA line card modules to pluggable modules like CFP and QSFP.

These compact transceivers with highly integrated optics and electronics have shorter interconnections, fewer losses, and more elements per chip area. These features all lead to reduced power consumption over the last decade, as shown in Figure 3.

DWDM Gives More Lanes to the Fiber Highway

Dense Wavelength Division Multiplexing (DWDM) is an optical technology that dramatically increases the amount of data transmitted over existing fiber networks. Data from various signals are separated, encoded on different wavelengths, and multiplexed (combined) into a single optical fiber.

At the receiving end, the wavelengths are demultiplexed (separated) again and reconverted into the original digital signals. In other words, DWDM allows different data streams to be sent simultaneously over a single optical fiber without requiring the expensive installation of new fiber cables. It's like adding more lanes to the information highway without building new roads!

Figure 4: Example of a bidirectional DWDM system. At the central office, transceiver modules pick different wavelength channels for transmission, and these channels are combined into a single fiber through a device called a multiplexer. A demultiplexer splits the wavelength channels into separate fibers and the receiving modules on the remote end. Since this is a bidirectional system, transmission can go opposite too, from the remote end to the central office.

The tremendous expansion in data volume afforded by DWDM can be seen when compared to other optical methods. A standard transceiver, often called a grey transceiver, is a single-channel device – each fiber has a single laser source, transmitting 10 Gbps. Coarse Wavelength Division Multiplexing (CWDM) has multiple channels, although far fewer than DWDM. For example, with a 4-channel CWDM, you can transmit 40 Gbps.

DWDM, however, can accommodate up to 100 channels. At that capacity, you can transmit 1 Tbps or one trillion bps – 100 times more data than grey optics and 25 times more than CWDM.

While upgrading to DWDM requires some initial investment in new and more tunable transceivers, the use of this technology ultimately reduces the cost per bit transmitted to the network. Demand in access networks will continue to grow as we move toward IoT and 5G, and DWDM will be vital to scaling cost-effectively. Self-tuning modules have also helped further reduce the expenses associated with tunable transceivers.

Conclusion

As data traffic continues its exponential growth, reducing the cost per bit in access networks has become a critical objective for telecommunications providers. EFFECT Photonics has outlined three key strategies to achieve this goal:

1. Manufacturing at scale to reduce the cost of optical chips and transceivers, leveraging the economies of scale and efficiencies of semiconductor wafer processes.

2. Photonic integration to lower power consumption and save on cooling costs, following the blueprint of the electronics industry.

3. Dense Wavelength Division Multiplexing (DWDM) to significantly increase data transmission capacity over existing fiber without deploying new cables.

4. By embracing these technologies and strategies, network operators can ensure efficient, cost-effective, and scalable data transmission to meet the ever-growing demands of the future.

Reference

[2] EFFECT Photonics, "Reducing the Cost per Bit in Access Networks," March 6, 2024.