Synchronous optical network (SONET) and synchronous digital hierarchy (SDH) achieve synchronous data transmission over fiber optic networks. SONET is the US version of the standard published by American National Standard Institute (ANSI). SDH is the international version of the standard published by ITU.

The first-generation SONET/SDH equipment was added drop multiplexer (ADM) which was based on the original set of standards. Next generation test equipment was SONET/SDH switch, with the mechanism of mapping Ethernet on SONET. The third generation test equipment uses tools like virtual concatenation (VCAT), generic framing procedure (GFP), and Link capacity adjustment scheme (LCAS). Next generation SONET/SDH devices are supporting resilient packet ring (RPR) for scalability, bandwidth efficiency, and class of service support features.

SONET/SDH is preferred more than plesiochronous digital hierarchy (PDH) because of its compatibility with standard equipment from different vendors. When sophisticated services with high bandwidth are required, SONET/SDH finds its importance. SONET/SDH capitalizes the voice transport ability with high vendor interoperability.

For the constantly evolving standards interoperability poses a serious challenge as compatibility between the equipment and network is required VCAT in next generation products improves the Ethernet transport efficiency and LCAS can change the transport bandwidth required. Scalability and interoperability are the two major challenges to the next-generation SONET/SDH equipments.

The major factors determining market growth of the world SONET/SDH test equipment market include:

Drivers

• User demand for Ethernet-based services is the major driver for this market.
• High bandwidth requirement, along with the integrated product functionality (generic framing procedures and virtual concatenation) drive the world SONET/SDH test equipment market.
• Movement towards optical and data convergence is also driving demand for SONET/SDH test equipment.

Restraints

• End user spending condenses demand in the SONET/SDH test equipment market.
• There is a slow adoption rate of next generation SONET/SDH test equipment as users are not willing to let go off their existing equipment and hence are not upgrading.
• As there is not much technological development, sale in the new test equipment market is retarded.

Challenges

• The Slow capital expenditure (CAPEX) situation is dampening demand for SONET/SDH test equipment market.

• The complexity of Next generation SONET/SDH test equipment poses a serious challenge to test vendors.

• End user requirements challenging vendors of SONET/SDH test equipment in terms of product development. Quality of service is also representing a significant challenge for vendors.

Future Outlook
The SONET/SDH market experienced a downward spiral in the last few years. However, the future looks positive. The price of this equipment is in parity with asynchronous equipment and is expected to decline further. Next generation SONET/SDH technologies are main driver for the growth of SONET/SDH test equipment market.

Prathima Bommakanti, Research Analyst, Frost & Sullivan