40G component market to net $500M by 2012

Telecommunications equipment manufacturers will purchase approximately $500 million worth of 40-Gbit/sec transponders and components by 2012, according to a new report from market research and industry analysis firm CIR.

Having run the gamut from over-hyped “next big thing” to dead and buried, 40G has once again emerged as a topic of conversation in the market, say CIR analysts. The difference today is that real deployments are beginning to happen and advances in technology and the availability of 40G transponders have made the technology into something worth considering.

According to CIR’s newest report, the market currently resides at the very short reach (VSR) level (2 km) with deployments mainly limited to core routers. While several carriers, including AT&T, Sprint, and SOFTBANK, have announced plans to upgrade to 40 Gbits/sec, CIR believes that industry-wide 40-Gbit/sec rollouts will not ramp until 2010. Whether 40G achieves the market prominence of today’s 10G remains to be seen, but at a minimum, that won’t happen until at least 2015, say the analysts.

Nonetheless, 40G will find sizeable markets much earlier than that, and CIR expects the escalation in the 40G market will be driven by new technology enablers, cost improvements, and escalating bandwidth demand. The most important recent innovation has been the emergence of advanced optical modulation schemes and improved dispersion compensation, both of which make 40-Gbit/sec transmission over existing networks a much more practical proposition.

For more information about CIR’s new report, “The Transition to 40Gbps,” visit www.cir-inc.com.

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