North America, CALA drive service provider router market to overall growth in 2022: Dell’Oro

March 14, 2023
Double-digit sales growth in North America and strength in the Caribbean and Latin America (CALA) region overcame weakness elsewhere in the world to drive overall year-on-year growth in the service provider (SP) router market, according to a new report.

Double-digit sales growth in North America and strength in the Caribbean and Latin America (CALA) region overcame weakness elsewhere in the world to drive overall year-on-year growth in the service provider (SP) router market, according to a new report by Dell’Oro Group. The market research firm states in its recently released Service Provider Router & Switch Report that sales in the segment exceeded $14 billion in 2022.

"In North America, sustained demand for IP routers drove the market as telecom and cloud SPs continued upgrading their networks with products providing 400-Gbps technology capabilities and expanding network capacity to accommodate increasing traffic levels," commented Ivaylo Peev, senior analyst at Dell’Oro Group. "CALA’s SP router market surprised us with exceptional performance in 2022, recording 15% year-over-year growth. The region’s growth reflected telecom SPs increasing investments in 5G buildouts, as well as in mobile backhaul infrastructure in Brazil, Columbia, Mexico, and Puerto Rico. In addition, strong demand for residential broadband across the region led to meaningful revenue contributions.

Things were not as rosy elsewhere in the world, however. Dell’Oro says that decreased spending by Chinese SPs on routers led to a double-digit reduction year-over-year across Asia Pacific (APAC) in 2022, for example. "We believe that the limited access of Chinese router vendors to 400-Gbps-capable ASICs is another key factor that is depressing investments in SP core networks across China, because operators want to upgrade their networks with the newest available technology,” Peev stated. “A slowdown of 5G network buildouts and the associated expansion of mobile backhaul networks in China were responsible for the decline of APAC’s SP edge and aggregation switch segment in 2022. We expected investments to shift to SP core and metro networks but delays in the planning of China’s SP core network expansions triggered a decline in China’s core router segment in 2H 2022."

Cisco topped the vendor list for worldwide SP router and switch sales in 2022, followed by Huawei, Nokia, Juniper, and ZTE, in ranked order. Juniper, Ciena, and Cisco gained the largest market share in 2022.

Dell’Oro’s Service Provider Router & Switch Report covers the SP router and switch market for current, future, and historical periods. The report includes qualitative analysis and detailed statistics for manufacturer revenue by region, customer type, and use cases, average selling prices, and unit and port shipments.

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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.

You can connect with Stephen on LinkedIn as well as Twitter.

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