BOSTON, May 10 -- Tunable lasers will start appearing in live networks by the end of 2001 and will continue their penetration in the marketplace for major applications such as replacement of source lasers and wavelength routing, said a report from the Yankee Group. Yankee predicts that tunable lasers should also reach price parity with fixed-wavelength lasers by 2003 and projects that the worldwide market for tunable lasers will grow from $50 million in 2001 to $2.32 billion in 2005. Jay Patel, a senior analyst for the Yankee Group's Carrier Convergence Infrastructure research and consulting practice, states, "Network operators are facing the challenge of deploying increasingly higher-bandwidth networks at increasingly lower costs. Further, these networks respond poorly to the operators' need for dynamic bandwidth, resulting from either a change in bandwidth demands or network failures. Existing networks are also technologically inflexible in providing next-generation optical services such as bandwidth-on-demand. In other words, though high-capacity networks, they are static, not dynamic, and certainly can use some more intelligence." Patel adds: "Tunable lasers address the issues faced by network operators and present those operators with promising opportunities for the future."