Optical networking growth in Asia Pacific slows down

The Asia-Pacific (AP) optical networking (ON) market will
reach revenues of $6.4 billion by 2016, as the sector’s overheated market goes
through a cooling down period, according to Ovum.

Though the AP market will grow at a compound annual
growth rate (CAGR) of 4 percent from 2010 to 2016, the growth will be much less
than the astonishing 25 percent CAGR achieved from 2005 to 2010.

Ovum’s figures show that the market in Asia-Pacific
contracted by 2.2 percent last year and will contract by a further 3.2 percent
in 2011 due to different reasons. The 2010 reduction was due to a dry market
in Japan and a government-induced freeze in India, while the Chinese market
grew. For 2011, we predict growth again from Japan and India but a slowdown in
China, caused by an overheated market that needs a little cooling-down period,”
said Ian Redpath, principal analyst at Ovum.

China will not cede its place as the second highest
contributing country to the global ON market, however the country’s
contribution will not likely grow in 2011. At this point, no other countries
are candidates to replace China and its rapid growth. The US and the northern
European countries collectively are expected to exhibit steady, respectable
growth in 2011. The return of extraordinary growth will most likely come from
China when another build cycle comes around, for example  4G wireless,
very-high-speed data to the enterprise, or another new service driver.


Ovum’s global forecast report shows a marked improvement
for the market when compared to the recessionary period, however it falls short
of a strong bounce back. We expect yet another year of muddling out, with
North America continuing to gain momentum; Europe, the Middle East, and Africa
(EMEA) improving from contraction to modest growth; and Asia-Pacific beginning
a modest retreat,” added Redpath.

There will be a solid growth for North America in 2011 of
12 percent, up from 7 percent in 2010. Emerging technologies will be the
driving force in North America. Ovum expects adoption of 100G network building
to gain momentum from both carriers and non-carriers.

In EMEA, which contracted by 10 percent in 2010, Ovum
predicts that 2011 will be a turnaround year, with 3 percent growth and a CAGR
of 5.5 percent from 2010 to 2016. Developing economies in EMEA still need basic
infrastructure and the developed ones are due for a network refresh after two
long years of recession-induced restraint.

By TelecomLead.com Team
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