Metro core optical transport equipment market to net $2.5 billion in 2005

The market opportunity for vendors supplying SONET, DWDM, and optical Ethernet transport systems in the U.S. metro core will exceed $2.5 billion by 2005, driven by the increasing diversity of ports within the space, claims a new study from Communications Industry Researchers (CIR) Inc. (Charlottesville, VA). While CIR analysts predict continued pressure on capital spending for metro carriers, they also see some positive growth for the market in the area of wholesale wavelength services.

The metro wholesale wavelength services market could jump from $30 million this year to almost $900 million over the next five years, due to the increasingly attractive value of wavelength services over that of dark fiber, as well as the gradual penetration of metro DWDM systems into carrier networks.

While the metro DWDM market has failed to live up to industry expectations, CIR's research indicates that 2003 will be the first big year for metro DWDM deployments in the United States, with the market netting $500 million by 2005. Among the RBOCs, Verizon is expected to be the biggest buyer of metro DWDM ring equipment, followed by the regulated portion of Qwest.

Development of the metro optical-networking market will remain "in neutral," admits Mark Lutkowitz, vice president of optical-network research, until the RBOCs and other metro carriers embrace DWDM ring technology.

CIR analysts believe most carriers will continue to consolidate spending and look for operational and cost-efficiencies. As a result of the mergers between different RBOCs and GTE over the past five years, carriers have been able to reduce head counts and consolidate networks and organizations.

CIR's report, "Metro Optical Networking Opportunities," examines such technologies as SONET, DWDM, and metro optical Ethernet. For more information, call 434-984-0245 or visit www.cir-inc.com.

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