Optical network spending set to surge

Market will exceed $17.5bn in 2018 as 100G booms

Tags: Ovum
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Optical network spending set to surge
By  ITP.net Staff Writer Published  November 18, 2013

The optical networks (ON) market will exceed $17.5bn by 2018, for a 3.1% CAGR from 2012, predicts global analyst firm Ovum.

An exceptionally strong second quarter has signaled the beginning of a spending bounce-back in the ON market. Q2 was the strongest quarter in the past six and was the seventh highest quarter in the past 10 years.

In a new forecast analysis, global ON is projected to be up 1.1% in 2013 compared to 2012 based on positive growth forecasts for North America, Asia-Pacific and South & Central America.

“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,” said Ian Redpath, analyst, Network Infrastructure, and author of the report.

“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."

However, not all regions demonstrated growth. The Europe, Middle East and Africa (EMEA) region remains mired in an economic malaise, Ovum says. “We expect 2013 ON sales to come in at a dismal negative 9.6% versus the 2012 level,” Redpath said.

“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.”

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