Ovum: Global optical networking worth $20 billion in 2016

Market research and analysis firm Ovum predicts that revenues within the global optical networking (ON) market will hit $20 billion by 2016, a compound annual growth rate of 6%. This growth won’t be spread evenly across all regions, however, according to Ovum’s new ON Forecast Report: 2011-16 report.

Market research and analysis firm Ovum predicts that revenues within the global optical networking (ON) market will hit $20 billion by 2016, a compound annual growth rate of 6%. This growth won’t be spread evenly across all regions, however, according to Ovum’s new ON Forecast Report: 2011-16 report.

North America will get things started this year, with a predicted growth rate of 12% in 2011.

Said Ian Redpath, Ovum analyst and author of the forecast, “Increasing bandwidth from residential broadband networks, mobile networks, and enterprises is the key driver of the growth. Carriers are investing in access networks, and mobile long term evolution (LTE) rollouts are beginning to gain momentum. The ON market is also reaching a watershed moment in terms of technology. Networks based on 40G and 100G wavelengths are now poised for mass-market deployment.”

Yet improvement will not be consistent across regions. While North America motors ahead and the Europe/Middle East/Africa (EMEA) segment is expected to evolve from contraction to modest 3% growth in 2011, Asia-Pacific will head in the opposite direction. The former engine of the ON market will throttle back to what Redpath termed “a modest retreat” for the second consecutive year.

Looking more closely, the EMEA market should expand at a CAGR of 5.5% from 2010 to 2016. “Developing economies in EMEA still need basic infrastructure and the developed ones are due for a network refresh after two long years of recession-induced restraint,” said Redpath.

Meanwhile, Ovum estimates the market in Asia-Pacific contracted by 2.2% last year and will contract by a further 3.2% this year. “The 2010 reduction was due to a dry market in Japan and a government-induced freeze in India, while the Chinese market grew,” Redpath explains. “For 2011, we predict growth again from Japan and India but a slowdown in China, caused by an overheated market that needs a little cooling-down period.”

More in Business