Global manufacturer revenue from optical transport network (OTN) transport equipment and switching equipment will reach $10.6 billion by 2015, according to a new research report.

OTNInfonetics Research's first OTN Hardware Market Outlook report also said that Huawei was the leader in both the OTN transport and the switching markets, thanks to its large telecom customers in China that were among the first to readily embrace all-OTN networks, including the largest installations of OTN switching.

"There has been a lot of discussion about the increasing use of OTN in carrier networks, but until now, little effort by the analyst community to quantify the size of the market," said Andrew Schmitt, directing analyst for optical at Infonetics Research. "Our OTN report is unique in that it not only tracks OTN hardware, but it makes the important distinction between mature OTN transport equipment and nascent, fast-growing OTN switching equipment. Each segment is in a different stage of adoption and has a wildly different growth rate.

"Case in point: OTN switching revenue jumped 132 percent in 2010 over 2009, while OTN transport revenue grew 9 percent. Both segments are growing at a pace that far outstrips the 3.7 percent CAGR of the overall optical market."

Other highlights from the report included:

  • In 2011, OTN transport equipment spending made up 92 percent of the overall OTN hardware market, while OTN switching made up 8 percent; with the OTN switching segment growing much faster than OTN transport, these proportions will change significantly by 2015.
  • Rapid growth in the OTN switching market is expected to continue as 40G and 100G coherent technology rollouts catalyze the deployment of new technologies, including OTN switching.
  • OTN switching and transport hardware together made up 45 percent of global optical equipment spending (WDM and SDH/SONET) in the first half of 2011 and are expected to grow to 70 percent of the total by 2015.