5G & 400GE to Boost SP Router Market – Report

Dell'Oro Group suggests telecoms and cloud operators will spend more than $75 billion on IP gear in the next five years.

Anne Morris, Contributing Editor, Light Reading

February 4, 2020

2 Min Read
5G & 400GE to Boost SP Router Market – Report

Worldwide sales of service provider router systems will exceed $75 billion during the five-year period of 2020-2024, with 5G and cloud service trends expected to drive investments in IP network infrastructure, according to a new report from Dell'Oro Group.

As 5G service uptake grows, the need for backhaul capacity to support burgeoning data, video and cloud-related traffic over service provider networks cannot be overstated -- network operators cannot afford data traffic bottlenecks between their edge/aggregation nodes and their metro transport networks.

And the ever-growing demand for bandwidth-hungry services, driven largely by the need to connect to data center sites (whether centralized or distributed) will fuel upgrades to backbone networks involving investments in 400 Gigabit Ethernet (GE) technology, which is now coming to the market in a significant way: Indeed only today wholesale network operator giant Telia Carrier announced a major 400GE upgrade based on the latest Cisco router platforms.

Indeed, Dell'Oro predicts that revenue from 100GE and 400GE technologies will account for almost half of router revenue by 2024.

Shin Umeda, vice president at the analyst firm, said the overall service provider router market is expected to grow at modest, low single-digit rates during the next five years, "but there are network use cases such as mobile backhaul and backbone transport that will surge due to the uptake of 5G and cloud services, respectively."

Umeda added that vendors with the appropriate hardware and software solutions will benefit from the growth opportunities, but noted that geographic presence "will also play a big part in a company's success." For example, the Asia-Pacific region, led by China, is expected to produce the highest growth during the next five years.

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— Anne Morris, Contributing Editor, Light Reading

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About the Author(s)

Anne Morris

Contributing Editor, Light Reading

Anne Morris is a freelance journalist, editor and translator. She has been working in the telecommunications sector since 1996, when she joined the London-based team of Communications Week International as copy editor. Over the years she held the editor position at Total Telecom Online and Total Tele-com Magazine, eventually leaving to go freelance in 2010. Now living in France, she writes for a number of titles and also provides research work for analyst companies.

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