Service provider core router market size will be $3.4 billion in 2020

India telecom tower
The size of the service provider core router market is expected to be $3.4 billion in revenue in 2020 as 100 GE port shipments spur growth, said Dell’Oro Group.

Deployments of 100 GE ports were significant, driven by the increase in IP traffic and the availability of higher capacity line cards. Price of 100 GE declined significantly in 2015 as there was a mix shift in the types of routers on which 100 GE ports were installed.

Alam Tamboli, senior analyst at Dell’Oro Group, said: “Previously, 100 GE was primarily installed on high-end core routers and now more are being installed on relatively lower-priced edge routers.”

Advanced optics in CFP2 and CPAK has pushed down pricing on 100 GE and will lead to 100 GE selling at a price per bit transmitted below that of 10 GE in the 2018 time frame. CFP4 and QSFP28 will lead to denser optics and price reductions.

Global telecom industry expects that 100 GE ports will shift from backbone core deployments and into metro core deployments, further driving demand, as the pricing points become less cost prohibitive.

Mobile Backhaul

Dell’Oro Group earlier predicted that the Mobile Backhaul Transport market, comprising of wireless and fiber/copper backhaul systems, will drive $5.3 billion annually over the next five years as a near term rise in wireless backhaul equipment will energize the Microwave Transmission equipment market.

Small cell backhaul will contribute approximately 25 percent of the Mobile Backhaul Transport revenue by 2020. Demand for Microwave Transmission radio transceivers, used in a number of applications including mobile radios, is forecast to grow at an average annual rate of 8 percent through 2020.

Ethernet Switch market

Meanwhile, Dell’Oro Group said technology transitions will propel sales of the Ethernet Switch market over the next five years as 25 Gbps spurs the Cloud to upgrade the Data Center while 2.5/5.0 Gbps rallies the Enterprise to upgrade Campus networks.

The Cloud is driving the data center through at least three major product cycles by 2020, starting right now with the migration towards 25 Gbps, and the magnitude of the Cloud will cause several records to be set in the Ethernet Switch market during each product cycle.

Enterprise campus switching is moving away from 1 Gbps, toward 2.5/5.0 Gbps, to support higher bandwidth access points with security being a feature most customers are looking towards as they evaluate their upgrade path.

The Ethernet Switch – Layer 2+3 5-Year Forecast Report also predicts the bulk of the revenue growth during the forecast period will come from 25 Gbps and 100 Gbps while both 10 Gbps and 40 Gbps will decline significantly.