Fiber optics are poised to play a major role in most parts of Europe, reveals Frost & Sullivan researchers, noting strong traction in the European fiber-optic test equipment (FOTE) markets and passive optical network (PON) enhancements across Europe that will bolster fiber to the home (FTTH) deployments.
New analysis from Frost & Sullivan, “European Fibre Optic Test Equipment Markets,” reveals that the market earned revenues of more than $140.4 million in 2010. The market is estimated to reach $165.4 million in 2015.
“The United Kingdom is showcasing its broadband initiative, and FTTH deployment in most of England is triggering growth in the FOTE market,” says Frost & Sullivan Research Analyst Sujan Sami. “Besides FTTH, other segments stoking growth in this domain are 3G, cell backhaul, and dense wavelength division multiplexing (DWDM).”
FTTH and 40 Gbps are driving market growth in Germany. The Czech Republic, Slovakia, Hungary, and Scandinavia are showing promise. Russia may see significant growth with reinvestments in the fiber-optic space.
R&D efforts are underway to enable the roll out of better technology. Agilent Technologies exited the installation & maintenance (I&M) application segment and is focused on R&D, says a spokesperson.
Although the prospects for the market look upbeat, some aspects cloud its landscape: Vendors find it difficult to replace existing underground cables with fiber-optic cables in certain parts of Europe, especially in Germany. Despite great demand for FTTH, vendors face a challenge in laying cables as right-of-way access is restricted with existing laws. It has hindered the growth of the market, and this trend is expected to continue in the foreseeable future.
The ripple effects of the global economic downturn were felt in the European FOTE market. France and Germany are yet to recover, and growth in these regions is expected to be lackluster. Competition is intense among test vendors in this space, making price pressure significant in the region and hindering vendors’ growth. Increasing the price-to-performance ratio of products is critical for vendors to prosper in this region.
In this scenario, vendors must contribute to lowering the cost of testing, as well as optimize customer workflow and end-user requirements, in order to establish their market presence, reveals an analyst. With new and emerging technologies, such as reconfigurable optical add-drop multiplexer (ROADM), 40 Gbps and 100 Gbps, standardization is key for getting consensus among test vendors, while developing new products.
“In the future, the uptrend in demand will continue for higher bandwidth speed, installation of FTTH capacity, and more wavelength,” concludes Sami. “This, in turn, will spike demand for sophisticated equipment in the core network.”
“European Fibre Optic Test Equipment Markets” is part of the Test & Measurement Growth Partnership Service program, which includes research in the following markets: SONET/SDH test equipment, Gigabit Ethernet test equipment, and wireless test equipment.