Next-Gen SONET/SDH market to hit USD18bn by 2006

18 June 2002 -- Optical networking intelligence analyst KMI Research is predicting that next-generation SONET and SDH equipment will experience healthy growth from USD1bn in 2001 to nearly USD18bn in annual sales for 2006.

18 June 2002 -- Optical networking intelligence analyst KMI Research is predicting that next-generation SONET and SDH equipment will experience healthy growth from USD1bn in 2001 to nearly USD18bn in annual sales for 2006.

KMI, Providence, RI, USA, says that next-generation equipment will largely replace traditional SONET and SDH equipment, in its new report Optical Networking: SONET/SDH/Next Generation Equipment. By 2006, about 90 percent of SONET equipment sales will be next-generation equipment.

Several trends have increased the adoption of next-generation equipment over traditional SONET/SDH systems over the past three years, according to KMI. These include the need for better aggregation equipment at the edge of the network, the migration of optical solutions to access networks, cost-competitiveness of next-generation equipment, the move to adopt more efficient technologies, and usage of existing deployments.

KMI forecasts that traditional SONET and SDH markets will decline from a high of USD17.4bn in 2000 to USD4.6bn in 2006. The remaining market for SONET and SDH transport equipment will be sales to fill excess capacity on legacy networks. In addition to the transport market, next-generation equipment will make inroads into the digital cross-connect (DXC) market, the report says.

The more flexible platforms and switching capabilities available in this equipment make them ideal tools for DXC functions. But other emerging technologies, such as optical cross-connects and super-band switches, will erode more traditional broadband and wideband DXC markets.

This will bring the combined SONET and SDH DXC market down from USD4.0bn in 2000 to USD2.6bn in 2006, KMI says. The industry downturn of 2001 also drove companies to develop new approaches to efficiency maximization in network planning. In
anticipation of a rebound in fibre-optics equipment sales, many vendors are developing next-generation SONET and SDH products. This will take revenues away from the traditional equipment markets. KMI's report details the trends driving this new equipment strategy.

Optical Networking: SONET/SDH/Next Generation Equipment contains up-to-date information of value to telecommunications executives, financial analysts, business development managers, telecom service providers, systems manufacturers, component suppliers and fiberoptic cable vendors.

www.kmiresearch.com

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