Nokia Siemens Network Vision

Nokia Siemens held a webinar yesterday discussing its vision for Telco networks. It made a couple of interesting observations. One is that traffic will grow by a factor of 100. Since revenues are not likely to grow significantly, the cost of delivering this bandwidth has to decrease by a factor of 100. It said that somewhere around 60 percent or so of this cost decrease will come from Moore's Law and the increased density and performance of the chips. The rest of the savings will come from the flattening and simplification of these networks.

It also discussed the results of a service provider poll that it held with 900 respondents. Improving service quality is the number one factor over time. However, reducing cost and simplifying networks are expected to become the the number two and number three priorities, respectively, in three years.

Nokia Siemens also explained its decision to deemphasize GPON development. Its first reason is that the prospects for selling significant amounts of GPON over the next few years are not good. The market is sluggish and moving slower than expected. It also believes that VDSL is a very good alternative to GPON in the short run.

What Nokia Siemens does believe is that new technologies such as Hybrid PON and DWDM PON will start to appear in 2012 and will provide major improvements over PON. In addition to increased performance, these technologies will have the capacity to support unicast IPTV and to enable a significant network consolidation by eliminating the need for the current end offices.

There is a lot to what Nokia Siemens had to say. I think its PON strategy will be a good one if it can maintain its focus and be a leader in the introduction of these new technologies and if the GPON market does not heat up in the mean time.