Squeeze is on for metro optical vendors, reports Probe Group

18 August 2003 Cedar Knolls, NJ Lightwave--Metro optical equipment revenues are being adversely affected by a number of trends, according to a new report by Probe Group. These include: less than anticipated traffic demand; further carrier capital expenditure (capex) reductions; carrier consolidation and consequent availability of used/auctioned optical equipment; slow onset of delivering profitable new data services in the metro; and price pressure.

Aug 18th, 2003

18 August 2003 Cedar Knolls, NJ Lightwave--Metro optical equipment revenues are being adversely affected by a number of trends, according to a new report by Probe Group. These include: less than anticipated traffic demand; further carrier capital expenditure (capex) reductions; carrier consolidation and consequent availability of used/auctioned optical equipment; slow onset of delivering profitable new data services in the metro; and price pressure.

Metro optical equipment vendors are also facing increasing pressure from carriers to produce equipment that is soft not only on carrier capex, but also on operational expenditure. In response, many metro vendors have scrambled to release more compact, dense platforms as well as increased software automation features, this according to Probe vice president Maria Zeppetella. "It is fair to say that much of the research and development budgets of optical equipment makers has been focused on enhancing their metro product lines."

Still, metro optical revenues for 2002 were lower than those of 2001 by 46%. "First quarter 2003 revenues appear sluggish as well, although the metro optical market still looks rosier than that of long haul, which is still clearly suffering from overbuild," observes Zeppetella. She predicts a slow recovery in 2004 for the metro optical market, with metro SDH expected to account for the largest portion of metro optical revenues.

Probe's report, "Global Metro Optical Markets, 2002-2008," examines key market trends and market sizing, provides forecasts through 2008, and offers vendor revenue market shares for the metro optical equipment market for 2002 and the first quarter of 2003.

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