Benefits of Transparent Optical Networks in the Presence of Transponder Price Erosion

In this paper a detailed cost analysis of several opaque and transparent network architectures is presented taking the impact of many parameters like transponder reach, traffic volume and network protection requirements into account. Cost studies are based on a new equipment cost model and the application of several heuristic network dimensioning algorithms working on different layers. In addition to previous work the sensitivity of cost benefits on the transponder costs is addressed in the paper. This is an important aspect since new technologies are expected to lead to significant transponder price reductions in the future. The results show high cost savings by transparent solutions of up to 50% for current transponder prices provided that the traffic load is high and that transponders with limited reach can be employed. We find that transponder price erosion has only a moderate effect on cost efficiency of transparent networks as compared to opaque solutions.