US optical bandwidth services market to top $4.5 billion by 2006, says CIR

April 30, 2003
30 April 2003 Charlottesville, VA Lightwave -- The market opportunity for services provisioned over optically based circuits will grow from $2.08 billion this year to $4.62 billion by 2006, contends a new report from industry analyst firm CIR Inc.

30 April 2003 Charlottesville, VA Lightwave -- The market opportunity for services provisioned over optically based circuits will grow from $2.08 billion this year to $4.62 billion by 2006, contends a new report from industry analyst firm CIR Inc.

According to CIR analysts, SONET-based OC-n services will dominate the overall market, capturing a 60% share each of the next four years as wavelengths have not and will not cut into SONET private lines the way some startups expected they would during the optical boom. However, CIR did find that wavelength services in both the wholesale and retail markets will enjoy reasonable growth opportunities beginning this year with total sales of $353 million and reaching $800 million by 2006.

"While these figures do not reflect the conventional market hype of 2001 that saw obscene market projections of $8 billion wavelength services markets based upon non-correlated events like growth in total US population instead of termination points within carrier PoPs, the numbers do point to an upward trend worth watching," contends the report.

Wavelengths have been a successful substitute for dark fiber in some cases, but they have not meant the end of dark fiber sales. Large carriers in particular want access to a full fiber strand and not just a slice of its capacity. Two additional factors in the sale and use of fiber are also worth noting, says CIR. Utility companies that built high-capacity networks across their home regions in the late 1990s and now helping each other expand by swapping dark fiber. Also, carriers with large amount of fiber thanks to capacity overbuilding often prefer to sell entire fibers and are pricing them accordingly. On the other hand, wholesale wavelengths and SONET lines are dropping in price and leases are becoming less restrictive for the customer. Smaller carriers and ISPs, therefore, are less likely to purchase dark fiber and will instead seek service agreements.

For more information about the report, "Bandwidth Services Forecast Report: 2003-2006," visit www.cir-inc.com.

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