Optical network hardware market resurgent

Revenues from the sale of optical network hardware reached US$4.1 billion at the end of the second quarter of 2008, a 14% increase on the first quarter of the year, according to analysis firm Infonetics.

According to Infonetics the improvement is a result of strong performances by manufacturers Alcatel-Lucent, Huawei and ZTE. These results were in part due to an increase in business activity in China.

“China’s telecom restructuring projects and associated announcements indicate increasing optical network hardware capital investments in China over the next several years, and have started already in 2008,” said Michael Howard, principal analyst at Infonetics Research.

In terms of individual results, both Alcatel-Lucent and Huawei each posted double-digit increases in revenue. ZTE moved into third place ahead of Nortel and Siemens thanks to triple digit gains.

Packet optical transport system (POTS) hardware sales are a growing portion of the optical network hardware market, currently comprising 11% of worldwide sales. POTS sales are predicted to reach 17% by 2011.“Optical spending by carriers in most Asia Pacific regions generally remains strong for the next few years, particularly in Korea, Japan, and Hong Kong. Carriers in India are buying more optical equipment as well, starting this year, and will continue ramping up spending over the next few years,” concluded Howard.