APAC ON gear market to grow 3.1% in 2013

Ian Redpath/Ovum
07 Nov 2013

Ovum recently released an updated optical networks (ON) forecast for 2012–18, prompted by an upbeat 2Q13 and brisk sales of 100G equipment. We now expect the ON market to exceed $17.5 billion by 2018, for a 3.1% CAGR from 2012.

Ethernet, IP VPN, and mobile voice and data services provide a solid baseline of revenue-generating traffic growth bolstering sales of ON gear. Data center interconnect and cloud service adoption provide further traffic growth upside.

With the exception of Europe, regions are in a build cycle. Our 9.1% growth projection for North American ON for 2013 reflects that this is a solid bounce-back year for the region after two years of non-growth. Network core investments are resuming, and 100G is being deployed in volumes. The North American tier-1 CSPs and cable operators are investing in core network to support all traffic types.

The market for submarine line terminating equipment (SLTE) is projected to achieve modest growth of 3.3% in 2013. The catalyst for further subsea growth will be large-scale new builds. Those builds will come in time based on bandwidth, country, diversity, security, and latency needs.

Our growth projection for Asia Pacific ON in 2013 is 3.1%. Strong growth in the ASEAN-5 countries (Indonesia, Malaysia, Philippines, Thailand, and Vietnam), China, and Australia and New Zealand will mitigate projected market declines in Japan and India.

ON revenues in South & Central America (SCA) are projected to grow at 1.6% for 2013. Since 2005, SCA has had quite a good run, with the ON market more than doubling and passing the $1 billion mark as the SCA economies continue to grow and diversify.

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