Importance of the maturity of photonic component industry on the business prospects of optical access networks: a techno-economic analysis

  • Authors:

  • Dimitris Varoutas;Thomas Kamalakis;Dimitris Katsianis;Thomas Sphicopoulos;Thomas Monath

  • Affiliations:

  • Department of Informatics and Telecommunications, University of Athens Greece;Department of Informatics and Telecommunications, University of Athens Greece;Department of Informatics and Telecommunications, University of Athens Greece;Department of Informatics and Telecommunications, University of Athens Greece;T-Systems Nova GmbH

  • Venue:
  • NETWORKING'07 Proceedings of the 6th international IFIP-TC6 conference on Ad Hoc and sensor networks, wireless networks, next generation internet
  • Year:
  • 2007

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Abstract

This paper discusses the influence of the maturity of the photonic component industry (PCI) in the business prospects of optical access network deployments. Using the TONIC techno-economic tool, the business prospects of such deployments (in terms of traditional investment indexes such as the Net Present Value - NPV or Internal Rate of Return - IRR) are related to the several factors which characterize the maturity of the PCI such as production volumes and component cost evolution. The analysis shows that even if the cost of Fiber-to-the-Home/Office (FTTH/O) and Fiber-to-the-Curb scenarios are mainly influenced by fiber installation costs, the price reduction rate of photonic components may also affect the investment strategies. To speed up the cost reductions, telecom carriers should therefore invest on optical technology research and development.