Lumen and Zayo hold strong as U.S. wavelength service leaders

The top four spots on Vertical Systems Group's Wavelength Services Leaderboard went unchanged in 2022, with Lumen, Zayo, Verizon and AT&T maintaining their positions from the prior year, in that order, based on billable circuit share.

Those companies each have 4% or more of the U.S. market for retail and wholesale wavelength services -- which involve the allocation of capacity on an optical network, essentially creating dedicated highways for data. 

High bandwidth requirements are driving the growth of wavelength services in the U.S., according to Vertical Systems Group Principal Rick Malone.

Telecom carriers use wavelength services to extend their core backbone networks, connect mobile towers and strengthen the resiliency of their network infrastructures, while hyperscale network operators employ wavelengths for data center interconnectivity, cloud computing, business continuity and backup/disaster recovery.

“Enterprises are purchasing wavelength services for their backbone networks, driven by IT cloud transformations, and for specific applications requiring predictable latency and low jitter,” Malone explained.

Vertical Systems Group found that expansion of the U.S. base of wavelength circuits is being driven by double-digit growth for 100+ Gbps connections and expects that to continue through 2027.

Malone said that key U.S. providers have upgraded their fiber footprints to support wave services above 10 Gbps, with general availability of 100 Gbps circuits nationwide.

“At the same time, fiber footprints have been expanded to include buildings that previously may have had only a single fiber provider,” he told Fierce. “And with multiple wavelength providers in a building, customers are negotiating more favorable pricing terms.”

Billable installations of 400+ Gbps services are emerging as wavelength providers expand availability and roll out new services to support higher speeds across a wider footprint. Many are actively planning for 400 and 800 Gbps service deployment in response to “early adopter requirements,” according to Malone.  

Zayo recently debuted a new Waves on Demand product for customers looking to rapidly light up added bandwidth, for example. Waves on Demand will initially focus on providing 100G services across eight routes, though a 400G route between Newark, NJ and New York is available. 

Similarly, Lumen this spring made progress with its ongoing 400G network upgrade, completing enough routes to launch inter-city wavelength services covering 70 markets. 

Lumen SVP of Core Network Solutions Miriana Martinova told Fierce those 400G wavelength upgrades are designed to provide comprehensive coverage across the U.S., with redundant route options on its own network. She noted Lumen exceeded its budget goals for 400G in 2022 and thinks it will have an even stronger year in 2023 given it is in active negotiations with enterprise customers.

Operators are also adding features like circuit protection, channelization, low latency and encryption, Malone noted.

“We expect steady growth of the wavelength market during the next several years, with double digit growth for the higher speeds. As a point-to-point service, wave is positioned to interconnect the densest traffic sites in within high connectivity architectures like SD-WAN,” Malone said.

Arelion (formerly Telia Carrier), Cox Business, Crown Castle and Windstream all received a nod from Vertical Systems Group as challengers in the wavelength services leaderboard. Those companies hold between 1% and 4% share of the U.S. wavelength market, and also appeared on the 2021 leaderboard.