Cost modeling and evaluation of capital expenditures in optical multilayer networks

Optical multilayer networks offer a high degree of freedom in network design, adapting to actual network requirements (demand types, topologies, etc.) and achieving cost-efficient realizations. Capital expenditures are one of the key differentiators for the evaluation of multilayer networks. A realistic cost model for Internet protocol/multiprotocol label switching (IP/MPLS), carrier-grade Ethernet, synchronous digital hierarchy/optical transport network (SDH/OTN), and WDM equipment from which overall capital expenditures can consistently be derived is contributed and discussed. A comprehensive collection of detailed cost values for different equipment types is presented. Furthermore, the cost model is applied to two case studies, one IP/MPLS-over-WDM study and one WDM study with two topologies, showing substitution effects of network elements to achieve overall capital expenditure minimization.