Date: 05/12/2012

Telecom n/w implementation: 100G; full speed, 400-500G; normal, and 1T; not-in-hurry

Backhaul networks are growing both in density and speed all around the world to meet the ever growing need of information-flow. One of the leading tele-communication network equipment maker Infinera is in sync with the market’s technology demand in terms of speed. Here below Andrew Bond-Webster, Vice President, Asia Pacific, Infinera, answers to the some of the questions related to tech, business, and geographic trends in the backhaul high speed fiber networks.

Q- What are the latest technology trends for backhaul networks like connecting inter-networks or city to city networks? How is Infinera addressing those trends?

Andrew - Infinera’s focus is very much on the long distance and the Intra city fibre network environment. The key areas in which we can bring value to our customers and to our potential customers in India are in providing that inter-city regional connectivity. What we see is network operators or network service providers have to cope with ever increasing volumes of data and traffic and they are therefore looking for solutions that they can deploy which would enable them to not only meet the demands for the current environment but also to scale into the future. So being more specific in terms of Infinera solutions around that, we see a lot of opportunity and demand for the DTN-X platform which we launched last year, we saw preliminary customers in Q3 and Q4 of 2012. That platform is a 100G based platform. So when you are looking for beyond 100G based services, we can offer that DTN-X solution which has the capacity of 500G on the line side, give or take.

Q- Isn’t the industry now moving to 400G and 1 T? What are the bottlenecks that you or the industry sees and how is Infinera solving these bottlenecks?

Andrew - People are talking about 400G. We are already beyond that, we are talking about 500G. The DTN-X Platform already has 500G line side capability in the platform. So we see the PIC technology, which we have pioneered and are unique in our solution, will scale in time upto 1 T. We are already looking at 500G longhaul super channel type of solutions and that is what we are delivering to the customers today. The challenge then is and our focus is that we are looking at the volumes of data in traffic that are expanding and exploding across the globe for our service provider customers, we need to be delivering PIC based technology which is scalable and which can operate on the current platform upto 1T and potentially beyond.

Q- The present technology available in the market for 400G may not support 1T. So, if you handle 1T, what’s the kind of technology you are really pushing your designers to develop? How are you planning to develop them?

Andrew - Our technology from Day 1, even in our initial DTN was Photonic Integrated Circuit technology (PIC technology) and we are unique in the industry in using PIC technology to deliver solutions to our customers capacity based solutions. Our technology is very much focused on developing and continuing to develop the PIC technology that we develop and manufacture in house from Infinera. We have already surpassed the 400G of what you are talking about. We have 500G.

Q- What is the market requirement when it comes to high speed? Are they really looking for 1 Tb on an immediate basis? And what kind of applications are driving the 1T requirement?

Andrew - Let me take this in sequence, is there really any demand for 1 T today, frankly no. The reason why we focus on 500G super channels is that the market demand is still very much at that level. And while data volumes are increasing, they are not yet at the change where operators are demanding 1 Tb capacity on the line side. The 500G requirement we are more than able to provide to customers today. In fact I will also add that in some instances, 500G on the line side in that kind of volume and capacity still remains an aspiration to some network operators in Asia. Currently, everybody wants a 100G platform but they won’t be able to scale that platform over time as their volumes increase and they don’t have half that demand today, which is why we have introduced the instant bandwidth solution. This means that they can buy a 500G line side PIC and use it at only 100G but using software selection to increase the capacity at a 100G increment as the operators, customers, customer base and traffic volumes grow to meet that demand. So the market would undoubtedly get there but at this point in time none of the markets are there. With 500G capacity in one PIC, the DTN-X capacity has been able to satisfy the market requirements today and we expect it to probably continue satisfying this in the next 18 months. So the demand for 1Tb will come but exactly when that’s going to come is difficult to predict right now.

Q- So you are ahead of the market in terms of technology?

Andrew - One thing if I may just say is one analyst company has actually recognized our leadership in this respect, where they actually analyzed the global market for a 100G approach and Infinera accounts for 38% of all the longhaul 100G ports sold globally in Q3 2012 and 22% of the total market since they started measuring it in 2010.

Q- What share do you have in China?

Andrew - We are very selective about the markets where we want to make our investments and India as a market is of larger focus for us.

Q- What are your plans for India?

Andrew - Well, one of the markets where we are very focused on India, because of two reasons. One is that we have a facility in Bangalore that has completed 10 years. We are in the 11th year in India and that facility is a fundamental part of the R&D process within Infinera. So for global solutions and platforms that we deliver to the market, the development of key components is done in Bangalore.

Q- So is the India facility also planning to carry out local domestic manufacturing? As the
market is growing big and the fibre network is going to be implemented everywhere, are you planning to set up any manufacturing facility in India?

Andrew - We do not do manufacturing in India. Our manufacturing processes and some of the packaging processes are done in the US.

Q- But do you have any plans to do some part of it in India?

Andrew - Our plans are to continue to focus our efforts in India on R&D and the software development capabilities and expertise in India, maintain the current manufacturing base in the US. For us in India the other component is obviously the opportunity in the market is where new and existing network operators and service providers are looking to build out their national networks and upgrade their networks to 100G based networks and that is where we see a lot of opportunity and is a key focus for Infinera.

Q- Do you have any manufacturing unit outside the US or do you have everything in US?

Andrew - Our principle manufacturing of the PIC technology including all that goes with it is in the US. So that’s where we made our investments in manufacturing. We do our software development, which you could argue in some respect is the brains of the platform, in other parts of the world and a key part of that is done in India.

Q-Do you foresee IP networks replacing traditional circuits switch completely?

Andrew - Not only globally but in India, the deployment and the expansion of the fibre based network, the nature of the traffic, the growth in IP Traffic, whether it’s video, whether it’s VoIP, whether it’s data, everything is driving towards growth in IP and the IP traffic. The deployment and expansion of the fibre networks are going to drive that. In my opinion, it is leading to a decline in the more traditional areas of network technology and network protocol. So our focus is very much on the optical network or DWDM and ultimately how we will integrate other network protocols into our platform so that we can offer a converged solution to the market place. Factors such as cost have a significant impact on the economics of the network operator and they are always looking for means by which the cost could be reduced. India is a very competitive market. So if we can help our service provider customers and operators drive our cost through integration and consolidation of network protocols and architectures into single platform, we believe that will be the way in the future that will enable us to deliver value to our customers.

Q- Where is cloud computing in your strategy? How do you relate to those opportunities?

Andrew - Very simply put, I like cloud computing because for us it drives traffic on the network. Infinera is very much an innovation based company as you can see by the PIC technology that we have developed. Cloud computing clearly establishes or creates this virtual computing environment. Data centers and all those things consume network capacity. So anything that drives network demand, demand for network capacity or bandwidth is good news for Infinera. We provide network technology to a cloud computing services company that deliver computing capacity and provides cloud capacity services to their customers. Some of our other customers are also very much in the cloud computing space and that is all driving demand for bandwidth and is contributing very significantly to bandwidth growth in India, globally and that in turn is seen to Infinera as a demand for 100G DTN-X platform.