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Case studies • •

Author: Virginia Petrou

Telco chooses TXO’s optical transceivers & saves millions

It’s our mission to save operators millions on their optical transceivers annually.

With robust testing & guaranteed supply, you won’t need to compromise on quality or lead times. Here you’ll learn how one of the largest telecom providers in the world did just that!

Challenge

Our client was under pressure to drastically reduce their costs whilst maintaining high levels of service and increasing levels of demand. When they scrutinised their major expenditures they concluded that the group were spending in excess of $100 million on optical transceivers annually. The client was determined to end the policy of buying overpriced optical transceivers from vendors that do not even manufacture them, but there were numerous challenges to overcome.

Chiefly was the concern about the quality and reliability of an alternative source of optical transceivers.

Another principal concern was that because the network vendors themselves are heavily reliant on the high profits generated from their optical transceiver product sales, they would threaten to withhold support if non-vendor optical transceivers were used in the client’s network.

Lastly, the client needed to remotely identify every installed optical transceiver to monitor batches and reliability due to the isolated nature of many of their points of presence (POPs).

Solution

Our solution began with consulting with technical leaders across several of the client’s business units to get a complete understanding of their network landscape. Through this consultative approach we were able to quickly understand the client’s biggest pain points. As a result of joint venture and co-operation, we created a comprehensive and unique range of optical transceiver solutions tailored to meet the client’s complex and multi-faceted requirements:

  • Our universal range of optical products offer the same benefits as the vendor equivalent range, but in addition they are engineered to be interoperable across two or more systems and/or applications. This enabled simplification of the client’s procurement chain, reductions to their stock holding, and made it easier for engineers to identify spares in a hurry.
  • In 95% of cases the vendors limit the range of their optical transceivers to between 70km and 80km. We manufacture SFPs which can span distances up to 240km, meaning that the client could design-out unnecessary POPs, repeaters and drop-offs which will save them millions of dollars in switches, amplifiers and remote facilities for the client’s mobile network.
  • We designed and created a receive-only dual rate SFP+ for use in the client’s network monitoring systems, saving an additional 60% on the cost for the duplex parts they were using previously. In addition, these modules are very low power and generate little heat which is good for the environment. We have also designed a double density version which means that the client only has to roll-out half the monitoring switches that they originally budgeted for.
  • We coded every optical transceiver bespoke to the client’s specification. This meant that the client could remotely identify, track, trace and monitor every single TXO branded device.

In providing these customised solutions, our team of engineers worked closely with the same contract manufacturers that produce vendor branded optical transceivers incorporated within the client’s networks. Ordinarily this would ensure that our branded optical transceivers are at least as reliable as those sold by the vendors. However, we took reliability and quality even further by conducting 100% in-system testing of their transceivers. This is over and above that which the OEM and the vendors can offer.

We have seen countless scenarios of clients being threatened by vendors over the use of non-approved transceivers. Therefore we could help the client to prove points of law that prohibit vendors from withdrawing support and other benefits due to the proposed use of non-vendor optical transceivers. In response to this lobbying, once the client started rolling out installations of our optical transceivers they found that any resistance from the major vendors ceased.

Result

We worked closely and collaboratively with our client on many levels in order to demonstrate significant cost savings and improved reliability. The client also created many internal case studies that prove for themselves the significant cost savings they enjoy year-on-year. These are derived not only from the reduction of capital outlay, but also from ongoing saving of support costs and running costs.
Some key points of the many advantages of switching from major vendor sourced optical transceivers to those from us at TXO included:
Savings of up to 97% of the vendor list price which, in real terms, meant that they can purchase in the region five TXO branded optical transceivers for the same cost as one equivalent device from the vendor. On just one purchase order for 2,000 units the client confirmed they saved $1.8million, against vendor pricing, with a total cost of only $400k from us.
Our quality processes meant that they have had zero in-system failures from a TXO branded optical transceiver in the last 2 years. The same cannot be said for their vendor sourced optics.
Our no-quibble warranty provides annual savings of compulsory support costs levied by vendors.
Five years’ worth of savings of vendor support adds up to the cost of seven additional modules from us. For the above example of 2,000 units, the client saved a further $800k in support and maintenance costs.
The client is projecting to spend less than half of what they would have previously with the traditional vendor sourced optical transceivers.
They also expect to have less than half as many failures as they have had in the past.
“I have been really impressed by the quality of TXO’s optical transceivers. Over the past two years we have had zero in-system failures from a TXO optic. The same cannot be said for our non-TXO sourced optics.”

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