Analyst Sees Booming Optical Growth
In his opening address at Light Reading's Future of Optical Networking conference here in London today, Heavy Reading's chief analyst, Scott Clavenna, told the audience of more than 100 industry executives, including representatives from European fixed and mobile carriers, that there are "many reasons for the optical companies to be positive," as "deployments are strong, from the access to the core."
Clavenna said the long-haul DWDM market, which "took the biggest hit" when the bubble burst after 2000, will generate sales of more than $1.45 billion this year, grow to more than $1.6 billion next year, and nearly reach $1.8 billion in 2008.
The metro DWDM market is the brightest sector in terms of growth, as "there's a real nice impact from video here," noted Clavenna. "There are lots of ways to send video over the core -- by satellite for example -- but once you get to the regions" it's going to be over a fixed optical network and carriers will need local capacity, with needs varying depending on where the content is stored and whether local content is generated and delivered.
Here, Heavy Reading's market figures show this market to be worth about $1.6 billion in 2006, up from $1.3 billion in 2005, and growing to more than $2.1 billion in 2008, topping $2.6 billion in 2010.
Clavenna also noted that the ROADM market has hits its stride in 2006, having suffered from high prices, a lack of operations, administration, and maintenance (OA&M) capabilities, and problematic OSS support in the past. "Now it's a much more mature technology that the RBOCs are using to support their triple-play service rollouts."
He said the ROADM systems market was worth $187 million in 2005, but will grow to be worth $266 million this year, more than $470 million in 2008, and hit $920 million in 2011. (See HR: ROADM Market Primed to Boom and IPTV Delays Could Hurt ROADM Deployment.)
But one sector that's set to flatten out is the MSPP market, noted Clavenna, though, he added, "it's huge!" For "huge," read about $3.7 billion this year, up from about $2.6 billion in 2004. But there's no more room for spectacular growth, with the market set to top out at just more than $4 billion by 2009.
Now what the optical market needs is more innovations, such as the introduction of photonic integration that "is already underpinning one successful new entrant" and should "drive cost reductions across the industry." Clavenna didn't name that "new entrant," but he was referring to Infinera Corp. (Nasdaq: INFN), which has turned the long-haul market on its head in the past year or two. (See Ciena, Infinera Push 100-GigE, Ciena CEO: Watching Infinera, and Infinera Goes Live).
This is a market that rewards innovation," added the analyst, who said the next key area that demands new breakthroughs is "packet/optical convergence. Packet awareness in optical is a key development."
— Ray Le Maistre, International News Editor, Light Reading