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Study: Optical network equipment up 8% in Q4

Fri, 02/17/2012 - 2:28pm
Mike Robuck

Driven by a surge from large vendors, spending on optical equipment grew 8 percent globally during the fourth quarter.

According to a new report by Infonetics Research, the global optical network equipment market, including WDM and SONET/SDH equipment, grew 8 percent sequentially in the fourth quarter – from $3.4 billion to $3.6 billion.

In the fourth quarter, the largest optical vendors benefitted the most – with the exception of Cisco – including Huawei (up 35 percent), Alcatel-Lucent (up 20 percent) and Ciena (up 10 percent).

For the full-year 2011, the overall optical network hardware market was up 9 percent.

"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 percent gain in Latin America – a region showing very positive long-term trends," said Andrew Schmitt, directing analyst for optical at Infonetics Research. "While the typical end-of-year budget flush failed to materialize in North America, with AT&T and Verizon spending less, it did appear in full effect in EMEA, particularly Europe, up almost 11 percent. But the surge in Europe was due mainly to a surge in legacy SDH spending rather than of new WDM gear.

"Rising legacy spending is a negative leading indicator, as is the reversal in EMEA's rolling four-quarter revenue, which turned negative in Q4 2011 after only two quarters of gains."

Ciena and Infinera bucked the North American downward trend by posting positive optical revenues.

In 2011, WDM optical spending grew 22 percent, while SONET/SDH spending shrank 6 percent, as carriers continued to abandon investments in legacy technology in favor of ROADMs, coherent optics, packet-optical transport and optical transport network (OTN) equipment.

ROADM spending continued a seven-quarter streak of consecutive gains, with shipments up a whopping 36 percent in 2011 over 2010.

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