The acceleration of broadband deployment by Verizon and other phone companies will increase demand for SONET/SDH systems, reveals a new market study by Insight Research (Boonton, NJ). Insight contends that a gradual return to network infrastructure investment by carriers could begin as early as the fourth quarter of this year. Even as carriers ratcheted back their capital spending in 2001, end-user demand for bandwidth continued to grow—a demand carriers met by using up existing spare capacity in their networks. Now that recent regulatory rulings have given local carriers the incentive to begin reinvesting, the research company's analysts predict real growth will return to the optical equipment market. Insight forecasts compounded growth from 2003 to 2008 of more than 50% in the SONET/SDH terminal market and an 18% CAGR in the fiber-optic-cable market.
"Providers have squeezed excess capacity out of existing facilities for the last couple of years to meet bandwidth demand of their end customers," explains Insight president Robert Rosenberg. "The recent UNE-P broadband ruling gives the local carriers an incentive to begin reinvesting, and local access trends are the drive wheels powering the entire telecommunications industry. We expect SONET/SDH upgrades in metropolitan areas to become a major carrier priority."
For more information about the report, "Optical Networks: DWDM and SONET 2003-2008," call 973-541-9600 or visit www.insight-corp.com.