In its latest forecast for the ON equipment market, Ovum projects an upbeat, long-term forecast driven by brand new data centre demands, and with the sector expected to reach US$20 billion by 2017 with a five percent compound annual growth rate (CAGR).
According to Ovum, the highest growth region will be Latin America, driven by network modernisation efforts to enhance regional connectivity in support of mobile and broadband access network buildouts.
In the Asia Pacific region, principal analyst in Ovum’s Network Infrastructure practice, Ian Redpath, says that the Chinese optical network market has trebled in size over the past five years and continues to grow. “Much of the core backbone was built in support of early generations of mobile technology, but there is still a wave of high-speed fixed broadband and next-generation mobile to come,” Redpath predicts.
“The data centres are being placed in brand new locations, creating brand new optical networking demands. For example, the new Facebook data centre at Lulea, Sweden, near the Arctic Circle, will require terabits of bandwidth. These new demands are not unique to Lapland – they are emblematic of a trend unfolding in multiple European and North American locations.”
Ovum predicts that North America is expected to exhibit solid growth as tier-1 network operators embrace new 100G technology to meet growing data centre needs, and Redpath says the EMEA market was expected to expand, “despite the current macro-economic malaise, due to deployment activity in Russia, the U.K., Eastern Europe and Africa.”
According to Redpath, in EMEA, Russian network operators have visions of supplying pan-Asian capacity interconnecting the Far East to Europe overland. “The southeast U.K. is another hotspot, with over 150 data centres outside of central London that require high-bandwidth interconnection.”
Ovum says that the ON market in Latin America is in great shape as incomes have been rising, enabling network operator revenue growth. “Broadband is recognised as an essential service, and inter- and intra-continental connectivity is undergoing an upgrade,” Redpath says.
Redpath describes the global optical network market as being at a very interesting point in its evolution, with new demands arising “just as the industry’s latest technology offering is coming to fruition.”