IPTV Delays Could Hurt ROADM Deployment

The imminent explosion in networked video traffic will have a dramatic impact on the market for reconfigurable optical add/drop multiplexing (ROADM) equipment in the next five years, according to an upcoming report from Heavy Reading.

The market for ROADM systems, which give network operators far greater flexibility and efficiency in their networks, and greatly improved service activation times, is set to grow by more than 40 percent in 2006 from $187 million in 2005, and will grow by a further 32 percent in 2007, according to the report titled, "ROADM & WDM Worldwide Market Forecast, 2006-2011," which will be released next week.

The report's author, Heavy Reading chief analyst Scott Clavenna, believes IPTV is the main catalyst for carrier uptake of ROADM systems. "Where IPTV rollouts occur (and are planned), ROADMs will follow," writes Clavenna, who is this week hosting the Light Reading Live! Optical Expo 2006 event in Dallas, where ROADM developments will be among the topics discussed.

But there's a flip side to that positive outlook. "If telco IPTV buildouts get scrapped or postponed, the ROADM market will clearly suffer," warns Clavenna. "Given the current momentum of IPTV, such moves are unlikely during the next two years, but beyond 2008 this is something to watch."

Clavenna also finds that carriers aren't about to deploy ROADM gear in every metro or regional build, as "ROADMs are more expensive than traditional WDM systems, so operators will use them only when and where needed." Surveys of carriers have found that traditional WDM nodes will be used more often, notes the analyst.

Among the current vendors, Cisco Systems Inc. (Nasdaq: CSCO) leads the ROADM market, but Clavenna notes that both Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY) and Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA), the other two vendors with double-digit market share, have scored significant deals with their WSS (wavelength-selective switch) products that should deliver further success. (See Tellabs Victorious at Verizon and AT&T Shines a Light on Lightspeed.)

Among the other vendors vying for carrier attention with their ROADM products are: Movaz Networks Inc. , which is now part of ADVA Optical Networking ; Nortel Networks Ltd. ; OpVista Inc. ; and Tropic Networks Inc. (See ADVA to Marry Movaz, OpVista Racks Up $28M, and Tropic Ramps Up Sales.)

— Ray Le Maistre, International News Editor, Light Reading

Interested in learning more on this topic? Then come to our upcoming conference, Optical Expo 2006. This conference and exhibition will be staged in Dallas on September 19 & 20, 2006. Admission is free for attendees meeting our prequalification criteria. For more information, click here.

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