Dell'Oro: 400 Gbps to drive sp router growth, enabling telco and cloud expansion

Cloud service providers segment projected to grow faster than telco. #pressrelease

August 16, 2022

2 Min Read

REDWOOD CITY, Calif. – According to a recently published report by Dell'Oro Group, the trusted source for market information about the telecommunications, networks and data center industries, global cumulative Service Provider (SP) Router and Switch market revenues are projected to approach $76 billion by 2026, representing a 2 percent CAGR for the forecast period. The adoption of 400 Gbps routing technologies is expected to continue driving the overall market growth, allowing both Telecom and Cloud Service Providers to expand their networks and increase revenues.

Additional highlights from the Service Provider Router and Switch July 2022 5-Year Forecast Report:

  • The Cloud SP Segment is projected to grow faster than the Telco SP segment over the forecast period. 400 Gbps technology adoption in wide area networks (WAN) and Data Center Interconnect (DCI) applications should continue to drive the growth in this segment.

  • ZR Optical Modules—long-distance optical modules that support distances of up to 120 km and are based on 400ZR specifications—will create new use cases for SP Core Routers. We project a gradual increase in the number of 400ZR modules used with 400GE port shipments over the forecast period.

  • China has recently embarked on an infrastructure spending spree to address the economic slowdown caused by the country's recurring COVID-19 related lockdowns. It is not yet clear how much China plans to spend on the new infrastructure plan. However, according to official Chinese government statistics, investment in infrastructure generally jumped by over 8 percent in 1Q 2022. Further, the Chinese policymakers who are directing the infrastructure overhaul appear to be emphasizing technology: specifically, new facilities for supercomputing, cloud computing and artificial intelligence. If this level and focus of government stimulus are sustained for the next four quarters, Chinese SPs are likely to accelerate and expand their spending on network investments.

About the Report

The Dell'Oro Group Service Provider Router & Switch 5-Year Forecast Report offers complete, in-depth coverage of the Service Provider Router and Switch market for future current and historical periods. The report includes qualitative analysis and detailed statistics for manufacture revenue by regions, customer types and use cases, average selling prices, and unit and port shipments.

Read the full press release here.


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