Optical-network hardware, PON markets rising

Worldwide optical-network (ON) hardware revenue increased 3% between the first and second quarters of this year, with slow growth projected through 2007, according to Infonetics Research’s (San Jose, CA) quarterly report, “Optical Network Hardware.” In addition, its quarterly “PON Hardware” report reveals that PON optical-line-terminal revenue will increase 85% between last year and this year, with a major chunk coming from Verizon and NTT.

Metro optical hardware accounts for nearly three-fourths of all ON hardware revenue, while the long-haul sector continues to decline. Increased corporate network traffic and storage networking, consumer broadband, and service-provider wireless-network backhaul are driving metro spending. All metro categories are growing, except legacy SONET/SDH; carriers will virtually stop buying legacy and buy only intelligent SONET/SDH gear by ’07.

SONET/SDH is the mainstay op- tical technology worldwide, accounting for 68% of optical equipment sales. Intelligent ON hardware increased its share of the total ON hardware revenue to 87%, while the market for legacy equipment continues to decline. Alcatel is the worldwide ON hardware revenue market share leader, followed by Nortel Networks, then Fujitsu and Huawei, which are tied for third. In the emerging metro WDM category, Nortel remains in the lead, but Cisco now ties ADVA for second.

Asia remains the major action point for PON, thanks to NTT West’s BPON rollout in Japan and the planned EPON rollouts from NTT East and Yahoo Broadband. Almost half of all metro PON OLT revenue comes from Asia-Pacific and 39% from North America. PON is slowly lifting off in North America though; by ’07, its share will increase to comprise over half of all revenue.

For more on Infonetics’s quarterly reports, visit www.infonetics.com.

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