A new cycle of investment in optical networking in taking place in all regions around the world except Europe, the Middle East and Africa (EMEA), says market research company Ovum.
Market growth is being led by North America while spending in EMEA will again be down in 2013. The global optical networking market will grow to $17.5 billion (€13.1 billion) by 2018, a compound annual growth rate of 3.1 percent.
Ovum forecasts a 9.1 percent growth in North American optical networking spending in 2013 after two flat years. North American tier-1 communications service providers and cable operators are investing in the core network to support all traffic types, and 100G is being deployed in volume.
Growth in Asia Pacific will be 3.1 percent in 2013. Strong growth in the ASEAN-5 countries – Indonesia, Malaysia, Philippines, Thailand, and Vietnam – and in China, Australia and New Zealand is countering market declines in Japan and India. South and Central America are also projected to grow, at 1.6 percent for 2013.
Optical networking sales in EMEA will contract by nearly 10 percent in 2013. “Non-spending in Europe is the major factor in the overall EMEA decline,” said Ian Redpath, principal analyst, network infrastructure at Ovum.
EMEA optical networking spending has been down in four out of the past five years, and the lack of investment is becoming acute, says Ovum. Given that communications service providers are stretching their existing networks, spending will have to take place eventually to make up for the prolonged period of inactivity.
For large WDM systems, 100G is becoming the wavelength of choice with sales surging. Spending on 100G has now overtaken spending on 40G, which declined in the first half of the year. “The major technology trend for this forecast is the ascendancy of 100-gig, whose sales exceeded 40-gig revenues in 2Q13,” said Redpath.
By Roy Rubenstein
Ovum: Optical networks forecast: top line steady, 100G surging