The global market for optical networking (ON) will generate more than $17.5 billion in revenue in 2018, growing at a compound annual rate of 3.1% over the 2012–18 period, according to new research from Ovum.
According to the market-research firm, the second quarter of 2013 signaled the beginning of a “spending bounce-back” after a difficult few quarters.
“Ovum’s 9.1% growth projection for North American ON sales in 2013 signals a solid bounce-back year after two years of non-growth” says Ian Redpath, an analyst with Ovum. “Network core investments are resuming and 100G is being deployed in volumes.
The North American tier-1 communications service providers (CSPs) and cable operators are investing in their core network to support all traffic types. ”
Ovum reckons the Asia-Pacific ON market will register 3.1% growth in 2013, thanks to strong demand in China, and says the South and Central American market is set to grow by 1.6%.
However, the Europe, Middle East and Africa region remains “mired in an economic malaise”, according to the company.
“We expect 2013 ON sales to come in at a dismal negative 9.6% versus the 2012 level,” said Redpath. “Spending has been down in four of the past five years, and under-investment in the region is becoming more acute. At some point, the CSPs will have to resume buying to make up for this prolonged period of under-spending.”
The major technology trend over the forecast period will be the ascendancy of 100G, notes Ovum, with revenues from 100G sales exceeding those from 40G sales for the first time ever in the second quarter of 2013.
“100G spending was up 233% for the first half of 2013 compared to the first half of 2012, achieving $1 billion in revenue … while 40G was down 24% [over the same period], with revenue dropping below the $1 billion level to $942 million,” said Ovum.