Carriers May Face Higher Costs for Addressing Bandwidth Demands: Dell'Oro
A Dell’Oro analyst warned Wednesday that carriers may face higher capital costs unless technological advances come along that keep costs low. The demand for capacity in long distance networks has been growing at an average annual rate of 30% for…
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the past decade and that growth is expected to continue for the next 10 years, blogged Jimmy Yu, vice president-optical transport. But carrier capital expenditure costs haven’t increased at that rate because of improvements in spectral efficiency (SE), he said. Yu blamed Shannon’s Law, a theorem on the limits of channel capacity. “Increasing SE was the biggest lever to reducing the price-per-Gbps. However, due to Shannon’s Limit, future SE gains are harder to realize,” Yu said: “New technical innovations must be created. Otherwise, one day, service provider Capex will need to grow exponentially to keep up with user demand for bandwidth.”