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 newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Networkingmarket researchmobile broadbandmobile servicesoptical fibreDell'Oro Group

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

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?