Service-provider router market shows signs of rebound

25 February 2003 -- The market for service-provider routers rose to USD1.9bn in 2002, says Gartner Dataquest.

25 February 2003 -- The worldwide market for service-provider routers (SPRs) rose to USD1.9bn in 2002 as carriers such as AT&T, WorldCom and Verizon Communications used the devices to provide new telecoms services and move to next-generation infrastructure, according to a new study by Gartner Dataquest. The worldwide telecommunications and networking group defines SPRs as carrier-class routers capable of providing multigigabit bandwidth to support high-speed wide area network (WAN) interfaces.

Core routers that provide backbone services got a boost from edge routers, which consolidate high-speed Internet traffic and provide IP services, since an increase of traffic at the edge eventually resulted in more bandwidth requirements in the backbone.

Sales of routers to telecoms service providers ended 2002 on a high note. In Q4/2002, the market reached USD485m, indicating that excess capacity may have been depleted and that carriers might resume spending in this market. However, this still suggested only a small upswing in spending for the networking technology in the carrier market.

"Although the SPR market showed signs of levelling off at the end of 2002, the outlook for the market remains relatively flat in 2003," said principal analyst Jennifer Liscom. "Strong sales in edge and broadband aggregation routers will lead to recovery in the core, but recovery for the SPR market is still not expected until early 2004."

Cisco Systems and Juniper Networks accounted for most SPR revenue in 2002. Cisco led with 59.6% share, followed by Juniper with 27.3%.

Cisco also led the market in terms of shipments, garnering 55.3% of the market. Juniper was in the second with 28.7% of the market.

More in Market Research