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Optical transport market down 5% in second quarter 2012

13 September 2012
Market research firm Dell'Oro Group has reported that the global optical transport equipment market in the first half of 2012 shrank 5 percent compared to a year ago to $6.1 billion (€4.8 billion).


The optical transport market declined overall due to lower spending in Europe and North America. Spending in China was also weaker, although Dell'Oro expects capital expenditure to pick up in the second half of the year.
Spending was up in two market sectors: WDM transport and packet-optical systems.
WDM was up 5 percent in the first half of 2012 due to demand for 40Gbps and 100Gbps. 
"At 100 Gig we are at an inflection point where demand growth rates are really high," said Jimmy Yu, vice president of optical transport research at Dell’Oro Group. Shipments doubled quarter-on-quarter in the second quarter of 2012, while for the year Dell'Oro expects 100 Gigabit to grow fivefold.
The market for 40Gbps is still growing. "It has been around for a few years so its growth rate is not as strong [as 100 Gig transport] but it is still a significant part of the market," said Yu.
The growth in high-speed optical transport is having a knock-on effect on the optical packet segment. Traditional packet-optical transport systems with their crossconnect and switching capabilities require bandwidth management with the move to higher speed 40- and 100-Gbps wavelengths.
Another factor is that operators want better support for Ethernet at the aggregation layer – traditional served by SONET/SDH – and are adding multiprotocol label switching, transport profile (MPLS-TP). 
"Combined, we are seeing this optical packet market has grown 12 percent year-on-year in the second quarter whereas the overall market has declined," said Yu.
Meanwhile, SONET/SDH sales in the second quarter of 2012 declined by 20 percent year-on-year as the market finally moves away from SONET/SDH.
By Roy Rubenstein