How much does network expansion cost without transponders? Calculating savings with 400G ZR+ modules

The anatomy of classic coherent link costs.

A traditional 400G DWDM connection consists of a router that sends a signal through a grey module to an external transponder. The transponder converts the signal into a specific DWDM wavelength and passes it to the optical line system, with an identical configuration operating in reverse at the other end of the link.

A single 400G link involves several cost items. Purchasing a pair of carrier-grade 400G transponders costs between $15,000 and $25,000, and that is just for the hardware alone, excluding installation and infrastructure. On top of that, there are two grey modules on the router side, costing $200 to $400 each, plus space in a chassis or transponder rack. In total, a single link costs between $15,400 and $25,800 in hardware alone.

In terms of energy, a 400G transponder typically consumes between 40 and 60 W. Two transponders per link, along with the grey modules on both sides, result in an effective consumption of about 120 W per link. With a Power Usage Effectiveness (PUE) of 1.4 and an electricity price of 0.12 EUR per kWh, this amounts to 1,763 EUR per year for a single link. Additionally, there is the operational cost of management, as each transponder is a separate inventory item, a separate record in the network management system, and a separate incident in the event of a failure. In a network with dozens of links, this means dozens more devices to maintain compared to an IPoDWDM architecture.

What the 400G ZR+ module changes

In an IPoDWDM architecture, a GBC Photonics 400G OpenZR+ module slides directly into the router's QSFP-DD port. The transponder disappears. The grey module on the client side disappears. The entire intermediate layer between the router and the optical network disappears.

A pair of GBC Photonics 400G OpenZR+ modules costs about $1,000 per link, with no chassis, no slot in a transponder rack, and no additional equipment required. Power consumption drops below 22 W per module, or 44 W per link—more than three times less than a pair of transponders. Using the same energy assumptions, this results in 647 EUR per year per link instead of 1,763 EUR. The energy savings amount to 1,116 EUR per year for a single link.

Calculation for three deployment scales

The following calculations are based on these assumptions: $20,000 for a pair of transponders as a mid-market range, $1,000 for a pair of ZR+ modules, a PUE of 1.4, an energy price of 0.12 EUR per kWh, and an exchange rate of 1 USD to 0.93 EUR. Operational management costs have been omitted; including them would only further increase the difference in favor of ZR+.

For ten 400G links, hardware procurement in a classic architecture costs $200,000, while in IPoDWDM with ZR+ it is only $10,000. Energy costs over five years are 88,150 EUR and 32,350 EUR, respectively. The total cost of ownership over five years is approximately 270,000 EUR for the classic architecture and approximately 40,000 EUR for IPoDWDM, resulting in a difference of 230,000 EUR. For fifty links, hardware procurement is $1,000,000 versus $50,000, energy over five years is 440,750 EUR versus 161,750 EUR, and the total cost of ownership is approximately 1,350,000 EUR versus 210,000 EUR, a difference of 1,140,000 EUR. For one hundred links, hardware procurement is $2,000,000 versus $100,000, energy over five years is 881,500 EUR versus 323,500 EUR, and the total cost of ownership is approximately 2,700,000 EUR versus 420,000 EUR, a difference of 2,280,000 EUR.

Three cost items that most calculations overlook

The first is fiber leasing. Where an operator leases dark fiber, DWDM with ZR+ modules means a radically lower number of leased fibers. For a 4.8 Tb/s deployment between two data centers in the US, classic 400G links would require 24 fibers at $133,920 per month, while DWDM with coherent modules on four fibers would cost $22,320 per month. The difference is $111,600 per month—over $1.3 million per year—and that is just on fiber leasing, without even considering equipment costs.

The second is rack space. ZR+ modules sit in router ports, so transponder chassis disappear from the rack. In data centers with per-U pricing, this has direct financial value, and based on completed deployments, operators report an 80 percent reduction in colocation space usage. The third is the time to launch new services. In a classic architecture, launching a new link requires ordering a transponder with a lead time of 6 to 12 weeks, shipping, installation, OTN configuration, and synchronization with the IP layer. In IPoDWDM, it comes down to sliding a module into an available router port and setting up the DWDM channel in 10 seconds via the SRD environment. For a network that is growing dynamically, shortening service activation time from weeks to hours has a real impact on revenue.

Conditions that must be met for the calculation to hold true

The figures above are accurate provided the deployment is carried out correctly. There are two scenarios where the savings shrink or disappear.

The first is a route that requires an additional amplifier. Most 400G ZR+ modules available on the market transmit a signal at -10 dBm, while DWDM systems are tuned for a range of -3 to 0 dBm at the multiplexer input. At -10 dBm, it is necessary to add an EDFA amplifier between the module and the multiplexer, which means additional purchase costs, higher power consumption, and a degradation of the OSNR parameter for the entire path. GBC Photonics OpenZR+ modules transmit natively at 0 dBm, without a miniature amplifier added as a workaround, so they integrate directly into existing DWDM systems without any modifications.

The second is a DWDM system that does not support a flexible channel grid. 400G OpenZR+ modules operate at 60 Gbaud and require a channel width of at least 75 GHz, while older systems with a fixed 50 GHz grid will limit transmission to a maximum of 200G instead of 400G. Therefore, it is necessary to verify the supported grid in the existing optical line system before the project, and if a WSS card replacement is required, its cost must be included in the calculation.