North American optical transport equipment market looks bleak, may rebound in 2002
New forecast figures from telecom market research firm RHK, Inc. show growth in the overall North American optical transport market will slow to 10 percent in 2001. This compares to a 1999-2000 growth rate of 67 percent and a previous RHK forecast of 37 percent for 2001.
RHK reports that, given the current uncertain economic environment, service providers are focusing on improving utilization of their existing networks, moving more cautiously in selecting new products to deploy, and taking advantage of a buyers' market to renegotiate vendor contracts. RHK expects the North American optical transport market to rebound in 2002, as service providers deploy new transport products and the long-haul WDM market begins to recover from flat sales in 2001.
RHK forecasts that the North American optical transport market will grow from $19.6 billion in 2000 to $21.6 billion in 2001 and $34.9 billion in 2004, a CAGR of 15 percent.
The new forecast analyzes how current macro-economic conditions have impacted specific segments of the optical transport market. Changes recorded in the metro segment, which includes WDM, SONET and DCS equipment used in metro applications, are moderate, with RHK expecting the $8.1 billion 2000 market to grow with a compound annual rate of 8 percent.
The long-haul market, which includes WDM, SONET and DCS equipment used in long haul applications accounted for 59 percent of total spending in 2000, was most affected by the softer market. Specifically, long-haul WDM has seen increased competition and decreased pricing of low channel count systems (forty or fewer wavelengths); OC-48 SONET equipment has seen decreased pricing due to increased competition among vendors (with Cisco's 15454 taking major market share); and several new product categories, super -broadband DCS, optical core switching, and ultra-long-haul WDM have gotten off to a slower than anticipated start. RHK projects that the 2000-2004 CAGR of the long-haul segment will be 20 percent.
"Cutting the forecast by technology, RHK expects the North American WDM market, which includes both metro and long-haul WDM equipment, to grow 37 percent in 2001, with a CAGR of 36 percent through 2004," predicts Dana Cooperson, Director of Optical Transport, North America. "The strongest growth rates will be in optical core switching and ultra-long-haul systems. In contrast, we expect traditional long-haul systems to be flat this year, as a result of pricing pressure and slower network expansion, and then begin to recover in 2002."
This new forecast along with other new research and analysis will be presented live at SUPERCOMM 2001 at the RHK booth, #4169. Complete forecast data is provided to clients of RHK's Long Haul Transport and Optical Networks - North America and Metro Transport and Optical Networks - North America services. The new forecast provides a range of 2001-2004 market scenarios and key indicators to monitor and anticipate likely developments. RHK is monitoring market trends and fluctuations and provides its customers with timely updates on material changes.
About RHK:
RHK Inc. is a global industry market research and consulting firm specializing in the analysis of advanced technologies for the public telecommunications network. The company provides subscription services and custom consulting to technology vendors, service providers and the investment community on North American, Asia-Pacific and European markets. For more information, visit www.rhk.com.