Cisco, Huawei, Alcatel-Lucent and Juniper Networks are leading the service provider router and switch revenue market in 2013, said Infonetics Research.

Cisco, Huawei, Alcatel-Lucent, and Juniper together took 83 percent of global carrier router and switch revenue.

Over the past 2 years, Huawei has increased its market share the most of any vendor.

In 2013, service provider router and switch revenue — including IP edge and core routers and carrier Ethernet switches (CES) rose 2 percent to $14.5 billion.

In Q4 2013 carrier router/switch revenue decreased 4 percent from the same period a year ago.

SDN challenges

Infonetics Research noted that telecoms are proceeding cautiously with router and switch spending, in part because they are trialing SDN (software-defined networking) or just beginning to figure out how to proceed with SDN.

Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research, said: “The fourth quarter is usually an indicator for the current year and sometimes a bellwether for the future. In Q4, North America had a double-digit sequential decline in carrier router/switch revenue rather than the usual budget flush, with weakness coming mostly from Verizon and AT&T, among the global leaders of SDN activities.”

Prompted by the move to 100GE, the core router refresh is still mildly in motion: Core routers are up 3.3 percent for the full year 2013, but flat quarter-over-quarter.

There is focus on multiple content delivery networks (CDNs) and smart traffic management across routes, aimed at making routers and optical gear cooperate more closely.

With SDN hesitation slowing router and CES spending, Infonetics now expects worldwide service provider router and switch revenue to grow at a low single-digit CAGR from 2013 to 2018, when it will reach $17.2 billion.

Mobile backhaul equipment market

Dell’Oro Group earlier said the mobile backhaul equipment market, consisting of transport and routers & switches will reach $8 billion by 2018.

Jimmy Yu, vice president of Mobile Backhaul Market Research at Dell’Oro Group, said:  “We anticipate the pace of cell site deployments will gradually increase over this period as operators expand their LTE footprint and begin to roll out small cells.  We also expect outdoor small cell backhaul to drive at least 10 percent of mobile backhaul revenue by 2018.”

Routers & Switches for mobile backhaul are projected to grow at a five percent compounded annual growth rate and to comprise nearly 35 percent of total mobile backhaul market revenue by 2018. The primary growth driver will be the shift to a packet-based backhaul network as operators roll out LTE and LTE-advanced.