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The optical transport network (OTN) based on 43-Gb/s channels is expected to be the carriers' next-generation core network. This paper discusses its system architecture, from the requirements of services, protection, and management, and shows a feasible scenario to ensure the rapid penetration of the 43-Gb/s-based OTN. It also describes the design concept and functions of the first 43-Gb/s OTN line terminal. The line terminal deploys time-division multiplexing to handle client signals and provides high-quality, multiple transparent services, such as synchronous optical network/synchronous digital hierarchy and gigabit Ethernet. The configuration and features of the actual fabricated system are described.