Report: Optical Network Equipment up 8% in 4Q11 as big vendors surge

On Friday, market research firm Infonetics Research released a new report stating that spending on optical gear grew 8% globally in the fourth quarter of 2011 (4Q11) over the previous quarter.



On Friday, market research firm Infonetics Research released a new report stating that spending on optical gear grew 8% globally in the fourth quarter of 2011 (4Q11) over the previous quarter.


“Regional spending trends for optical network hardware were volatile in the final quarter of 2011, with North America down and the rest of the regions up sequentially, including a huge 63% gain in Latin America – a region showing very positive long-term trends,” says Andrew Schmitt, directing analyst for optical for Infonetics Research (Campbell, Calif., USA).


According to Schmitt, while the typical end-of-year budget flush failed to materialize in North America due to AT&T (Dallas, Texas, USA) and Verizon (New York) spending less, it did appear in full effect in EMEA, especially in Europe, who was up almost 11%.


The surge in Europe was mainly due to a surge in legacy SDH spending rather than of new WDM gear, says Schmitt. Rising legacy spending is a negative leading indicator, as is the reversal in EMEA’s rolling four-quarter revenue, which turned negative in 4Q11 after only two quarters of gains.


According to the report, the global optical network equipment market, including WDM and SONET/SDH equipment, grew 8% sequentially in 4Q11, from $3.4 billion to $3.6 billion. For the full year 2011, the overall optical network hardware market is up 9%.


In 4Q11, the largest optical vendors benefitted most – with the exception of Cisco (San Jose, Calif., USA) – including Huawei (Shenzhen, P.R.C.), who was up 35%, Alcatel-Lucent (Paris), who was up 20%, and Ciena (Linthicum, Md., USA), up 10%.  


In 2011, WDM optical spending grew 22% while SONET/SDH spending shrank 6%, as carriers continued to abandon investments in legacy technology in favor of ROADMs, coherent optics, packet-optical transport, and optical transport network (OTN) equipment, says Infonetics. ROADM spending is on a 7-quarter streak of consecutive gains, with shipments up 36% in 2011 over 2010.