Mass adoption of optical switching to begin in 2003, says report

January 23, 2002--The worldwide optical switching equipment market is forecast to jump from its $307-million mark in 2001 to $6.45 billion by 2006, claims a new report from Surrey, UK-based research firm ARC Group.

Jan 23rd, 2002

The worldwide optical switching equipment market is forecast to jump from its $307-million mark in 2001 to $6.45 billion by 2006, claims a new report from Surrey, UK-based research firm ARC Group. After 2006, optical switching technology is expected to dominate the telecommunications markets in North America, Western Europe, and parts of Asia, while deployment will be slower in developing regions like Africa, the Middle East, and Latin America.

Optical switching technology is becoming more mature, says the report, and prices--already on the decline--will decrease even more rapidly with the move to volume manufacturing, anticipated in the second half of this year.

"If 2000-2002 is the period of testing optical switching technology, 2003 will definitely be the year that will mark mass adoption of this technology around the world," claims the report. Several carriers, including Global Crossing, France Telecom, and Japan Telecom have already announced their satisfaction with the performance of optical switching systems they have tested and plan to deploy the technology extensively in their networks in the 2002-2003 timeframe.

Optical switching is expected to help enable dynamic and automated service provisioning while helping to reduce carrier spending in such areas as network maintenance, network control, and network power consumption.

Many carriers have announced plans to reduce capital and operational expenditures in 2002-2003 by as much as 30% over 2001. However, data traffic--driven by broadband service demand--continues to grow. If carriers do not respond to this growth, warns the report, their network utilization could reach the maximum toleration ratio of 40% as early as the second half of this year, making it critical for carriers to choose the right switching equipment to upgrade their networks and reduce expenditures.

ARC Group's report, "Optical Metropolitan Networks and Optical Switching Systems," examines the competition, deregulation, pricing, performance, and deployment evolution of the optical switching equipment market by region in both the metro and the long haul. For more information, visit the company's Web site at www.arcgroup.com/.

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