Huawei and ZTE lead in global ON market

ovumZTE has overtaken Alcatel-Lucent to slot just behind leader Huawei in the global optical networking (ON) market. This is the first time that Chinese vendors are holding the top two ranks in ON, according to Ovum.

Ovum’s analysis of Q1 results in the US$14.5b global ON market has highlighted that growth in 100G remains a bright spot as annualised revenues exceeded $1b for the first time ever. However, market growth overall remains difficult and challenging equipment vendors with only Fujitsu posting sequential and year-over-year gains.

“While it is not uncommon for the market to decline going into the first calendar quarter, the decline is worrisome as this is the fifth straight time the market has declined versus the prior year’s quarter, and quarterly revenues are the lowest they’ve been in six years,” said Ron Kline, Network Infrastructure Analyst at Ovum.

In a new market share analysis, the global industry analysts verify that besides 100G, sales of next-gen converged packet-optical gear, including OTN switching gear, is up compared to the year-ago quarter, although annualised sales of 40G gear declined for the first time, indicating perhaps that the 40G market is starting to slow as vendors price 100G aggressively.

From a regional perspective, Ovum reveals that spending compared to the year-ago quarter dropped in Asia-Pacific and EMEA, remained flat in North America, and grew 15 percent in South & Central America.

The global industry analysts believe the current downturn is being driven by a quickening in the shift in spending to non-IP/Ethernet aggregation equipment, faltering economic growth in Europe, and lower pricing due to intense vendor competition.

“Ovum is projecting the ON market will exceed US$17.1b by 2018, for a 2.7 percent CAGR from 2012. We project that all ON market regions will resume growth in 2013 as carriers who exercised fiscal caution and deferred spending in 2012 restart their plans. Growth of IP, video, mobile data, and data center expansions occurring in urban and more remote areas will be an ongoing catalyst for network footprint extension and capacity growth. Submarine network footprint and capacity will also expand in 2013,” said Kline.



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