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Optical networking market continues to grow

14 June 2011
 
The global market for optical networking grew 7% in the last year, according to industry analysts. Market research firm Ovum said the market reached US $3.5bn in the first quarter of 2011, while Infonetics Research said that spending on ROADM-based WDM optical network equipment in particular grew 20% since the first quarter of 2010. 
 
Infonetics says that despite industry concern about the outlook for 2011, it is confident that its single-digit growth forecast for 2011 is achievable. “There has been lots of client calls in the first half of the year wanting to talk numbers,” says Andrew Schmitt, directing analyst for optical at Infonetics Research. “When it [the market] is uncertain, customers put more time into understanding what is going on.”
 
Ovum expects 6% global growth this year. “Most of the growth will come from North America – general recovery, stimulus-related spending, and LTE [Long Term Evolution]-inspired spending; and from South and Central America, mostly mobile and fixed broadband related,” says Dana Cooperson, network infrastructure practice leader at Ovum.
 
The market research firm also reports that optical networking annualised spending for the last four quarters (2Q10—4Q11) went into the black with 1% growth, to reach $14.6bn. Annualised share figures are a strong indicator of longer-term market trends, says Ovum.
 
Factors accounting for the growth include demand for optical equipment for mobile and broadband backhaul. Carriers are also embarking on a multi-year optical upgrade to 40Gbps and 100Gbps transmission over OTN and ROADM-based networks, says Infonetics. ROADM spending in particular set a new high in the first quarter, rising 4% sequentially.
 
According to Ovum’s market share research, Alcatel-Lucent was the top-performing vendor in the last quarter with $645m revenues, up 17% compared to the same quarter a year ago and equating to over 18% market share.
 
The Americas accounted for most of the market growth; spending remains flat in Asia Pacific and Europe, Middle East and Africa.
 
Infonetics also highlights strong optical spending in North America which held steady in the first quarter of 2011 compared to the previous quarter, bucking normal seasonal trends. Infonetics also says that optical equipment spending is up year-over-year in all regions except Asia Pacific. 
 
Roy Rubenstein