Telecommunications service providers of all types deploy a variety of retail services for business and residential subscribers and wholesale services to other service providers. Service providers need to continually innovate by deploying new types of services to meet changing subscriber demands or reduce costs through the deployment of new technologies to maintain or grow margins in highly competitive markets. Service providers must continually reduce operational expenses (OpEx) that are highly impacted by the soaring cost of energy and the introduction of new technology. Service provider OpEx is often over 70 percent of their total expenditures. Non-facilities-based service providers are extremely sensitive to OpEx this since they lease their network connections and co-location facilities for their point of presence (PoP) in the network.

These challenges require service providers to take an evolutionary approach in their network migration from traditional TDM-based networks using SONET/SDH to more packet-based transport networks. This pragmatic approach enables the service provider to make pragmatic technology choices to maximize operational efficiencies to minimize OpEx while balancing their capital (CapEx) outlay to contain their OpEx growth while enabling service revenue growth.

One common challenge facing network operators is the increase in high bandwidth applications that are reshaping telecommunications networks. Probably the most significant applications driving this change are video applications of all types over wireline and wireless networks and mobile wireless data applications. For network operators, profitable growth requires evolution to an infrastructure that is optimized for these new generation applications.