Optical cross connect market to yield $6 billion by 2006

Nov. 15, 2001--As telecommunications carriers continue to build new infrastructure to accommodate increased network traffic and higher-bandwidth applications, they will increasingly turn to optical cross connect (OXC) equipment, reveals a new report from San Antonio-based research firm, Frost & Sullivan. Worldwide OXC revenues for long haul and metro networks totaled $336 million this year, but analysts forecast robust growth beyond $6 billion by 2006.

As telecommunications carriers continue to build new infrastructure to accommodate increased network traffic and higher-bandwidth applications, they will increasingly turn to optical cross connect (OXC) equipment, reveals a new report from San Antonio-based research firm, Frost & Sullivan. Worldwide OXC revenues for long haul and metro networks totaled $336 million this year, but analysts forecast robust growth beyond $6 billion by 2006.

While other optical networking equipment market growth has been sluggish, the optical cross connect market will grow exponentially, says the report. OXCs are capable of 10 to 20 times the bandwidth of traditional equipment, allowing service providers to scale network traffic without expanding their workforce.

"Optical cross connect systems are the ultimate bandwidth productivity tool," contends Frost & Sullivan analyst Mark Storm. "The technology dramatically reduces capital and operational expenses, while increasing network manageability. Optical cross connects systems' undeniable cost-saving benefits are attracting carriers that have reduced budgets to sustain profitability."

While other analysts have predicted that the market could reach between $15 billion and $20 billion, Storm advises industry participants to take a more conservative approach.

"The promised benefits of optical cross connects have been hyped-up and overestimated during the last several years," he says. "Previous forecast estimates will not be realized, despite the true growth that will occur over the next six years."

The optical cross connect market will grow at the expense of other market segments, however. Service providers are transitioning their network from equipment types widely deployed in the 1990s, including SONET and SDH systems, to next-generation systems designed for multi-wavelength networks, including optical cross connects, DWDM, and data-aware SONET and SDH technologies.

"To win contracts, optical cross connect providers need to identify which of the eight distinct types of design strategies network operators will purchase, and which they will not," says Storm.

For more information about the report, "World Optical Cross Connect (OXC) Markets for Core Long Haul and Metro/Regional Networks," visit the company's Web site at www.frost.com.

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