Mobile traffic helps push up optical demand

Spending on fiber network equipment should rebound this year, analyst firm Dell'Oro Group said

Demand for high-speed links to cell sites and homes will rejuvenate sales of optical network equipment this year and help to create a US$16.6 billion worldwide market for it by 2014, according to research firm Dell'Oro Group.

Sales revenue for optical gear fell about 10 percent in 2009, only partly because of the economic downturn, according to Dell'Oro analyst Jimmy Yu. Service providers also had reached the end of an upgrade cycle. Now another construction cycle is beginning to take shape, as carriers upgrade their metropolitan fiber networks to keep up with mobile and home Internet traffic, Yu said.

Dell'Oro expects overall optical-equipment revenue to rise 2 percent this year, to nearly $12.3 billion, from about $12 billion in 2009. Spending for long-haul fiber equipment, which goes into the national backbones of carriers, will lag behind the overall market. It will decline about 2 percent this year as carriers focus their investments on metropolitan areas. But this is still a big rebound, because long-haul revenue fell nearly 20 percent in 2009.

Optical networks carry huge amounts of data on specific wavelengths of light, many of which can travel over one strand of fiber. Carriers build out their optical capacity when they forecast the demand for it, but they do so in long projects that take advantage of the next generation of equipment. The emerging set of optical network equipment will use 40G bps (bit-per-second) and 100G bps technology, which can send those amounts of data over a single wavelength, Yu said. Investment in 40G bps technology soared 80 percent last year.

The exploding growth in mobile data use is a major factor driving the need for more bandwidth on fiber networks, because mobile operators need to set up fatter pipes to each cellular base station and build capacity all along the network to handle the traffic generated by millions of mobile devices. For example, AT&T, one of the mobile operators most under pressure to improve its network, said earlier this year that it added 1,900 new cell sites in 2009 and has activated HSPA 7.2 (High-Speed Packet Access with 7.2M bps downstream), a faster 3G technology.

Looking forward, new and faster standards for Ethernet are also likely to make carriers add to their networks, Yu said. Sometime this year, the IEEE is expected to approve standards for 40-Gigabit and 100-Gigabit Ethernet, which will be different from the 40G bps and 100G bps optical technologies. The fastest standard Ethernet ports now run at 10G bps. Service providers are likely to use the new Ethernet standards to offer business customers high-speed services, which would create a need for the faster speeds within the carriers' optical backbones as well.

Huawei Technologies, which was already the world's largest seller of optical equipment by revenue, continues to gain market share. In the third quarter of 2009, the Chinese company held nearly 23 percent of the market, up from just 15 percent in the third quarter of 2008, Yu said. Its gains were partly driven by rapid network-building in its home market, he said. Alcatel-Lucent was close behind Huawei in 2009's third quarter, with about 20 percent, although its share has been shaved down recently, according to Yu.

Join the PC World newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags mobile broadbandoptical fibreDell'Oro GroupNetworkingmobile servicesmarket research

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?