Optical network equipment market to reach $17 bn by 2019

The size of the global optical network (ON) equipment market will be $17 billion by 2019, growing by 3 percent per year, said Ovum.

Demand for interconnecting data centers will be the primary growth driver for the 3 percent growth in the optical network equipment market till 2019. Revenues for data center interconnect (DCI) equipment have crossed $3 billion on an annualized basis, with Internet content and cloud providers emerging as an important new market segment.

The impact can be seen in North America where many Internet and cloud providers have networks connecting hyper-scale data centers.

In a December 2014 report, Ovum said Internet content provider (ICP) Capex will reach nearly $57 billion in 2014 against $18.3 billion five years ago. Some of the ICPs include Google, Apple, Facebook, Alibaba, and many others.

Ian Redpath, principal analyst, Ovum, said: “Our Capex research indicates that Internet content providers and carrier-neutral providers are spending heavily on data center infrastructure, including optical transmission for DCI.”

Adva Optical Networking, Alcatel-Lucent, BTI Systems, Ciena, Cisco and Infinera are some of the DCI vendors.

Ovum said China is the second largest market for the ON equipment sector after North America.

ON equipment market in China will grow at 9 percent in 2014 as Chinese telecom carriers invested in LTE and fixed broadband rollouts. ON equipment market will have 4 percent CAGR for China over the next five years.

The CAGR growth for rest of Asia & Oceania (RoAO) region will be 4.7 percent to 2019. The RoAO region is modernizing network infrastructure and optical networks are being upgraded to support wireless growth.

ON spending in Europe and MEA will be down for the year but will resume growth in 2015, while North America is projected to grow at a 3.2 percent CAGR to 2019 largely driven by growth in DCI applications.

North America is expected to be the biggest region for DCI in 2015 due to the emergence of CN/ICP as an important segment, particularly for 100G.

Baburajan K
[email protected]