Dell'Oro sees recent growth in WDM, service-provider router markets

NOVEMBER 22, 2006 -- Newly published reports by Dell'Oro Group (search for Dell'Oro) indicate that the third quarter of this year was a good one for manufacturers of WDM and service provider routers.

Sales of WDM equipment reached almost $900 million in the third quarter, says Dell'Oro, in part on especially strong European region sales that increased 40 percent year-over-year.

"Service providers are focused on delivering new services, such as broadband and video to the residential market and Ethernet services to the enterprise market. As a result of this global trend, we have noticed increasing interest in WDM systems equipped with re-configurable optical add/drop multiplexers, or ROADMs," said Shin Umeda, vice president of optical transport research at Dell'Oro Group. "Service providers see ROADM technologies as a way to scale their networks and improve service delivery," added Umeda.

Meanwhile, Dell'Oro also reports that worldwide sales of service provider routers accelerated in the third quarter with a 30 percent increase over the same period last year. Cisco Systems was the clear leader with more than 55 percent revenue share, followed by Juniper Networks, Alcatel, and Redback Networks.

The Dell'Oro report also highlights the notably strong demand for edge routers, which grew at more than twice the rate of core routers and accounted for nearly two-thirds of the $1.5 billion service provider router market.

"Over the past three quarters, the edge router market growth has accelerated as service providers look to prepare their networks for next generation broadband services such as IPTV and VoIP," said Umeda, who is also vice president of router research at Dell'Oro Group. "At the same time, the core router market has slowed, but is still registering solid double-digit growth."

Worldwide Service Provider Edge Router Market Leaders (Revenue)