Techno-economic evaluation of the island based introduction of optical cross connects in an IP-over-WDM network

This article compares several traffic grooming approaches, based on expected capital expenditures (capex) to dimension and expand the network. For small traffic demands, the link-by-link grooming approach (efficiently filling SDH frames) is most interesting. We illustrate that, as traffic increases, there comes a point where the savings in IP layer expenses realized by end-to-end grooming compensate the extra expenses of introducing the needed optical cross connects (OXCs). We study the network-wide migration from link-by-link towards end-to-end grooming at a single point in time, as well as a possible migration path, where OXCs are introduced gradually in so-called end-to-end grooming islands. This approach can lead to important savings in capex. We study total equipment costs as well as incremental and cumulative costs, indicating the total expenses to be paid by the operator over a certain time. The use of the Net Present Value (NPV) technique is clarified. Finally, also the sensitivity of the obtained results to changes in the component costs is studied.

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