North American cloud and telco spending slide to last until at least 2H21: Cignal AI
Reiterating the findings of a previous report (see “Cignal AI analyst on 4Q20 North American optical transport market: ‘It's really, really, really ugly. Really.’”), Cignal AI confirms that spending among traditional telco operators (incumbent and wholesale) and cloud services providers in North America tanked in the fourth quarter of last year. The drop was particularly acute among the traditional telco segment, where spending on optical and packet hardware dove almost 40%, the market research firm states in its recent 4Q20 Transport Customer Markets Report. And this downturn may last until at least the second half of the year.
“North American network operators spent much less than usual in 4Q20 as they installed and used capacity acquired earlier in the year amidst COVID uncertainties,” explained Scott Wilkinson, lead analyst for transport hardware. “This will change in 2021 as first cloud and then traditional operators resume normal spending patterns.”
Such positive changes will occur as COVID restrictions are lifted, operational difficulties are resolved, and businesses resume normal operations, according to Cignal AI. The company notes that spending slipped in the Europe/Middle East/Africa (EMEA) segment in 4Q20 as well. However, the declines in North America and EMEA were offset somewhat by an increase in spending among cloud and colocation services providers in the Asia Pacific region.
Looking at 2020 as a whole, Huawei maintained its spot atop the market share leaderboard for both optical and packet transport equipment sales to traditional telcos. Cignal AI notes the growing political pressure being placed on the company in EMEA but adds that Huawei’s market performance hasn’t yet suffered as a result. Within the cloud/colo segment, Ciena lost market share in optical transport equipment to Huawei, Nokia, and Infinera in 2020 but remained the top supplier.
Cignal AI’s Transport Customer Markets Report tracks global optical and packet transport equipment spending by end-customer market type, including incumbent, wholesale, cloud and colocation, cable MSO and broadband, enterprise, and government network operators. The report includes historical market share and market size and five-year market size forecasts.
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About the Author
Stephen Hardy
Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
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