Next-generation packet-based transport networks economic study

This paper investigates the potential advantages of packet-based transport by providing a quantitative economic comparison between a model packet transport network (PTN) and a model circuit switched transport network (CTN). The paper addresses three economic metrics, CapEx, transport capacity efficiency, and OpEx. Quantitative measures are developed for the first two metrics. OpEx is considered on a more general basis, however a relevant publicly available metro Ethernet forum (MEF) quantitative study is summarized. The results of the economic comparison validate the theoretical advantages of packet-based transport for two different customer service demand scenarios: 1) all data 2) 25 % TDM and 75% data. For the all data demand scenario the PTN provides a 48% CapEx equipment cost advantage over the CTN. The PTN requires 70% less transport bandwidth than the CTN to transport the same set of service demands. This transport capacity efficiency advantage can be leveraged to route additional customer demands. For the 25 % TDM / 75 % data demand scenario, the CapEx cost advantage of the PTN over the CTN is reduced to 25 %, and the transport capacity gain is reduced to 57%.