4Q 2013 Optical Networking Market Update

Once again the optical infrastructure market grew; 4Q quarter budget flush delivered 19.5% quarter-over-quarter gain and increased the Worldwide Total Optical Networking market revenue to $4.01 billion, the highest run rate level since 4Q 2008. 

The fourth quarter year-over-year growth for the optical infrastructure market was 16%, growing 9% for the year. Of the six product segments tracked within the optical market five of the six reported positive quarterly gains. The Long Haul DWDM segment returned to the number one position based on revenue with 45.6% quarter-over-quarter growth. The Metro WDM segment was the second highest segment, delivering 15.9% quarter-over-quarter growth.

Only the POTS segment experienced negative quarterly growth, -4.1% but was up in 42.1% year-over-year. It also remains the fastest growing segment on a yearly basis. All the other product segments of MSPP, Optical Cross Connect and SONET/SDH saw demand increase and reported positive quarter-over-quarter growth.

In 4Q not all vendors benefited equally from the increased spending with some significantly missing their revenue targets. The vendors’ performance varied widely with several reporting banner quarters with the highest revenue levels seen for years or new highs. For the top 10 positions for the total worldwide optical networking market this caused a reshuffle of positions 2–8 within the Optical Networking market for 4Q.

4Q, 2013 Worldwide Total Optical Networking Market
Company	Rank	4Q Revenue ($M)
Huawei	1	$ 1381.9
Alcatel-Lucent	2	$ 432.8
Ciena	3	$ 403.5
ZTE	4	$ 364.5
Ericsson	5	$ 225.9
Cisco	6	$ 210.0
Coriant	7	$ 152.0
Fujitsu	8	$ 146.0
NEC	9	$ 121.5
Infinera	10	$ 115.1

Huawei maintained its lock on the first position and reported its highest optical revenue quarter ever. The advancers included: Alcatel-Lucent, Ciena, Ericsson, and Coriant, which all advanced one position. The decliners included ZTE and Fujitsu; both lost multiple ranks within the market for 4Q. Cisco managed to maintain its position although its quarterly performance was also below target.

APAC, the largest region from an optical revenue standpoint, reported 25.6% quarter-over-quarter growth and positive 27.0% year-over year gain. This was largely driven by Huawei and the company’s wins with both China Mobile and China Telecom. The economy in EMEA is beginning to show signs of picking up and vendors reported 48% quarter-over-quarter growth and 11.9% year-over-year. LATAM was the largest increase on a percentage basis, delivering +58.9% quarter-over-quarter but only +3.3% year-over-year increases. On a regional basis North America was the worst performing region, -15.0% quarter-over-quarter but still managing a gain of 10.0% year-to-year. This was largely driven by AT&T, Verizon and Sprint, North American Tier 1 providers, curtailing their CapEx spending toward the end of 2013. 

4Q Trends

• The MSPP market segment continues to experience declining revenue and for 4Q was able to post a small positive gain of 3.9% quarter-over-quarter but dropped 15.4% year-over-year. On a yearly basis in 2013 the MSPP segment dropped 17% and is 52% down from its all-time high achieved in 2007. The general transition away from legacy technologies is driving the decline in this market segment. As enterprises move to the IP/Ethernet environment it is driving a shift of product type from MSPPs to POTS platforms.

• Though the POTS segment saw a decline in demand during 4Q and decreased 4.1% quarter-over-quarter it was still up 24.1% year-over-year. This segment grew 25.9% on a yearly basis, making it one of the fastest growing segments in the optical equipment market. These platforms are widely deployed in data center solutions and are generally all SDN ready. There are a large number of both incumbents and newcomers to this market segment, making the competition extremely fierce and partnering and technology decisions more complex.

• Marlin Equity Partners completed its acquisition and privatization of Tellabs and has set its strategic direction. A portion will fold into Coriant and the other will be spun out as a separate entity called Tellabs. With Coriant in seventh position and Tellabs in eleventh, the combined revenue will bring them on par with Fujitsu and Cisco. Marlin Equity Partners has become a major stakeholder in the optical market, and it must now focus on execution.

• Demand for 100 Gig interfaces remains strong and ACG estimates more than 10,000 100G ports were shipped in 4Q. The overall port count for 100G deployment was up by approximately 26% in 4Q and accounts for as much as 30% of some vendors’ revenue. We anticipate a flattening of growth but project that demand will remain strong during the first half of 2014.

• The Metro WDM market segment was strong, particularly in North America, and has surpassed sales of the MSPP market segment. The Metro WDM growth is driven by increased user traffic as well as a traffic pattern shifts where more of the traffic originates and terminates within the Metro itself. This trend, which predicts as much as 75% of the traffic, will stay within the Metro and will drive equipment sales.

The optical networking equipment market continues to be driven by its traditional application of wireline services (dry and wet), wireless back haul, data centers applications and emerging M2M applications. Demand for services that will rely and effectively run over optical infrastructure will remain strong. With the global economy showing strength and government outages behind us consumers should help drive demand. In the optical market, however, 1Q of every year tends to be down as vendors generally attempt to pull in all possible revenue to finish their year strong.

For more information about ACG'spacket optical transport services, contact sales@acgresearch.net. 

         Jeff Ogle
jogle@acgresearch.net   
    www.acgresearch

Q3 Optical Networking Market Update

The optical infrastructure market continues to exhibit its cyclic nature with the 3Q Worldwide Total Optical Networking market dropping 7.4% quarter-over-quarter but still managing to yield a year-over-year gain of 5.7% with revenues of $3.36 billion. POTS and Metro WDM were the only two segments reporting positive quarterly growth, and for the first time the Metro WDM segment surpassed the Long Haul DWDM segment to become number one on a revenue basis. Traffic in the Metro WDM segment is closely tied to user demand and applications, and more traffic is staying within a metro, partially by network design and architecture. This growth will drive the need for higher performing Metro networks.  

The POTS segment, the fastest growing segment as both a percentage of revenue and total dollar contribution, saw strong demand, growing 8.3% quarter-over-quarter and 42.1% year-over-year. MSPP, Long Haul DWDM and SONET/SDH segments, however, saw demand decrease; all posted negative quarter-over-quarter growth. The Long Haul DWDM segment did grow 5.2% year-over-year and was number two in terms of total revenue contribution.

In 3Q the vendors’ performance did not vary as widely as observed in previous quarters, enabling most of the top 10 vendors to keep their relative positions. There was, however, enough variation to reshuffle positions 5–10 within the Optical Networking market.

3Q, 2013 Worldwide Total Optical Networking Market
Company	Rank	3Q Revenue ($M)
Huawei	1	$ 710.8
ZTE	2	$ 427.0
Alcatel-Lucent	3	$ 376.2
Ciena	4	$ 368.2
Fujitsu	5	$ 260.5
Cisco	6	$ 247.0
Ericsson	7	$ 147.6
Coriant	8	$ 128.0
NEC	9	$ 126.6
Infinera	10	$ 120.8

Huawei and ZTE maintained their lock on positions one and two. Alcatel-Lucent and Ciena both are vying for the third place and are within 2% of one another. A similar situation exists for Cisco (fifth position) and Fujitsu (sixth place); they only differ by 5.26% points and traded places this quarter. In a similar vein Coriant and Ericsson swapped positions 7 and 8. NEC made the top 10 this quarter by bumping Tellabs out of the ranking.  

By region North America was the best performing, providing 5.2% quarter-over-quarter gains and 23.3% year-to-year. This growth was largely driven by AT&T, Verizon and Sprint. Although the CapEx spending of these Tiers 1s is winding down, it has been a significant driver throughout this year. APAC, the largest region from an optical revenue standpoint, reported a decrease of 15.4% quarter-over-quarter but managed a positive 4.5% year-over year. EMEA is still showing lethargic performance and was down 3% quarter-over-quarter and 7.0% year-over-year. LATAM posted the largest declines on a percentage basis: -26.4 quarter-over-quarter and -9.8 year-over-year.   

Trends

• The MSPP market segment continues to decline revenue and for Q3 dropped 15.3% quarter-over-quarter and 14.5% year-over-year. The general transition away from legacy technologies is driving the decrease in this market segment. As enterprises move to the IP/Ethernet environment, product types are shifting from MSPPs to Metro WDM platforms.

• Marlin Equity Partners continues its acquisition and privatization of companies within the optical vendor ecosystem. With its recent Tellabs offer now approved by shareholders, Marlin Equity Partners has become a major player in the optical market. In the LAM region Tellabs and Coriant held the fifth and sixth positions. 

• Demand for 100 Gig interfaces is tapering. Although many vendors made their 3Q revenue target, the product mix is still largely being driven by 100G deployments by the major Tier 1 service providers. The overall port count for 100G deployment was down 12.5% for some vendors.

• The Metro WDM market was strong, particularly in North America, and will soon surpass sales of the MSPP market. This transition is driven from the migration away from the legacy technologies such as ATM and TDM to an all IP/Ethernet environment. We expect this trend to continue as well as spread to other regions with long existing legacy infrastructures.

The optical networking equipment market continues to be driven by its traditional application, wireless backhaul and data centers applications. Although there has been some consolidation, the space has numerous players and competition remains fierce as vendors compete for Greenfield opportunities, target the installed base of their competitors’ aging solutions and look for any chance to unseat an incumbent. This trend is expected to continue throughout the remainder of 2013 as vendors attempt to pull in all possible revenue to have a strong finish this year.

For more information about ACG's packet optical transport services, contact sales@acgresearch.net. 

         Jeff Ogle
jogle@acgresearch.net   
    www.acgresearch

Strong Optical Networking Spending Promises Steady Growth

The Total Worldwide Optical Networking market is projected to increase from $14 B to $17.25 B by 2018 (CAGR 4.4%). From a regional perspective the immediate growth is coming from network expansions of the incumbent carriers in North America and APAC and driven largely by the up-take in wireless 4G LTE based services. This build-out should take a couple years to complete and will also expand to the EMEA market where it will fuel revenue growth in the outlying three to five years. The projected five-year growth on a regional basis will be EMEA (CAGR 5.0%), Americas (4.7% CAGR) and APAC (3.7% CAGR). Based upon revenue generation the ranked order is Americas, APAC and EMEA.

The packet optical transport segment (POTS) will grow the fastest over five years (7.2% CAGR) and reach a $2 B run rate in 2018. The POTS segment emerged around 2008 as vendors started fielding the purpose-built IP to optical platforms that carriers and enterprises will need as they transition to an IP environment. Although this segment has not grown as fast as some originally predicted, it has offered new opportunities for vendors to expand their optical portfolio with minimal investment and thus has attracted new entrants into this optical market segment. This segment has the potential to exceed the forecast based upon the carriers’, content service providers’ and enterprises’ transition to an all IP environment.      

The legacy product segments of Long Haul DWDM (4.7% CAGR), Metro DWDM (4.7% CAGR) and MSPP (4.0% CAGR) will continue to grow; they account for approximately 85% of the total optical network spend during the next five years. This is due largely to the relationships or dependencies between the product segments. The Metro DWDM and MSPP are the edge devices and customer interface to the optical network. The Metro is usually deployed to support Carrier Ethernet-based business services. MSPP supports legacy voice data and video service offerings. The deployment of these edge devices drives the need for the Long Haul DWDM platforms to interconnect them, a trend that will not abate within this forecast window. Most Long Haul DWDM vendors are now shipping 100G interfaces and have announced or demonstrated their roadmap to higher rates. These have been well received and are being deployed at a high rate, demonstrating the advantages of this higher speed interface to support  subscribers’ connections.  

  

The only product segments forecast to deliver negative growth over five years are the optical cross connect (OXC) segment (-6.0% CAGR) and the SONET/SDH (-9.1% CAGR) segment. These product segments are the oldest within the optical networking market and are in the declining phase of their product life cycles. Much of the OXC functionality has been absorbed into the Long Haul DWDM and MSPP platforms, eliminating the need for a separate box to accomplish this function. The majority of carriers have also stopped spending on legacy SONET/SDH gear as they work to transition their networks to the all IP packet-based environment. Equipment vendors have also added SONET/SDH gateway functionality to their MSPP platforms to allow carriers to support these legacy systems both internally and for their subscribers. These two segments combined account for only 4% of ON spend and will drop to approximately 2% by 2018.

The optical networking equipment market is forecast to deliver 10.1% revenue growth in 2013 and experience slow but steady growth over this forecast period. This is in contrast to the boom or bust cycles for which optical has been historically known. The applications for optical technology have expanded in wireline and wireless networks, data centers and cloud computing and have created constant and ongoing support demand in support for network services.

The next five years will bring about stratification of these network services as carriers go to tiered services to close and cover the gap between costs and average cost per user (ARPU), the common metric used to derive the revenue generation of a service. ACG feels a new metric will emerge that defines the profit per user or APPU based upon an individual’s consumption of network resources and services. This new metric is a key requirement to determining actual costs and ultimately the profit a user generates. This capability will require the need for analytics applied to the software-defined network and virtualization capabilities of the entire element service delivery chain and will be a serious differentiator for those vendors that can deliver.  

For more information about ACG's optical services, contact sales@acgresearch.net.

         Jeff Ogle
jogle@acgresearch.net   
    www.acgresearch

What's the Network Market Look Like for Optical Equipment?

Because of the inherent advantages of optical technology, it has become the standard foundation for practically all network types. This, in turn, makes the optical equipment market a very competitive arena, one that has grown to almost 20 vendors. The vendor list includes both the well-known incumbent players that have been around for decades as well as newer entrants that are offering a different approach or value proposition to provide optical connectivity and control. Read more at TechTarget.

For more information about ACG's optical services, contact sales@acgresearch.net.

         Jeff Ogle
jogle@acgresearch.net   
    www.acgresearch

Optical Networking Market Rebounds in Q2 and Shows Its Competitive Nature

In Q2 2013 the Worldwide Total Optical Networking market had a significant rebound, 34.0% quarter-over-quarter, yielding a year-over-year 10.2% increase with revenues of $3.66 billion. All segments reported positive quarterly growth, pointing to strong product demand to support end users. Only MSPP and SONET/SDH reported negative year-over-year growth. The Long Haul DWDM segment contributed the largest revenue, and the POTS segment posted the highest growth on a percentage basis.

Again this quarter vendors’ performance varied widely, causing another reshuffle of positions 2–9 of the top 10 players in the ON market. ZTE overtook Alcatel-Lucent, which usurped Ciena, bumping it from 2^nd place in 1Q to 4^th this quarter. Such quarterly swings in position are indicative of the cyclic nature of the optical business as one new network deal and deployment can quickly boost revenue.  

2Q, 2013 Worldwide Total Optical Networking Market
Company	Rank	Revenue ($M)
Huawei	1	$ 849.1
ZTE	2	$ 673.0
Alcatel-Lucent	3	$ 375.1
Ciena	4	$ 351.7
Cisco	5	$ 240.6
Fujitsu	6	$ 232.3
NSN (Coriant)	7	$ 138.0
Ericsson	8	$ 122.6
Infinera	9	$ 120.2
Tellabs	10	$ 112.7

Alcatel-Lucent and Ciena are within 6% of one another, both vying for 3rd place. A similar situation exists for Cisco (5^th position) and Fujitsu (6^th place); they only differ by 4% points. In positions 7–10 the difference between Coriant in 7^th and Tellabs in 10^th is $26.1 million on a quarterly basis; consequently, this spread presents opportunity for vendors to advance their overall rating and market percentage.

Trends

• The MSPP market segment has been consistently dropping and although grew 40.6% quarter-over-quarter was down 13.2% year-over-year. The overall transition away from some of the legacy technologies such as TDM and ATM is impacting this market segment. Enterprises are driving a shift of product type from MSPPs to Metro WDM platforms as they move to the IP/Ethernet environment.

• Supporting multiple 10G and 40G subscriber connections in wireline networks and mobile broadband backhaul 100G has become the de-facto optical standard for long haul transport.  Several optical vendors such as Alcatel-Lucent, Ciena and Infinera have already field trialed, demonstrated and in some cases delivered the ability to combine additional wave lengths to form super channels that will enable transport rates to 400G, half terabit and ultimately full terabit line rates. This is a good way for vendors to demonstrate their optical prowess as well as product future proofing.

• SDN is gaining traction and the battle lines are being drawn. Various vendor alliances are being formed to develop the entire ecosystem, such as Blue Orbit. PlugFests have been established to help in the validation and interoperability, and vendors, such as Ciena, have announced test bed networks to also validate implementations. All optical vendors will need to have their SDN story in place along with the product roadmap to be considered for new networking opportunities.

• The Metro WDM market was strong, particularly in North America, and will soon surpass sales of the MSPP market. This transition is driven from the migration away from legacy technologies, such as ATM and TDM, to an all IP/Ethernet environment. We expect this trend to continue as well as spread to other regions with long existing legacy infrastructures.  

The optical networking equipment market is being driven by applications in wireless data centers and its traditional role of long haul transport. The market is showing signs of solid growth this year and is poised to increase to the low double-digit range. The number of players in this space continues to actually increase, and ACG Research now tracks over 20 vendors in this space, though not all play in all market segments. This keeps competition fierce as vendors compete for Green field opportunities and any chance to unseat an incumbent supplier. We expect this trend to continue throughout 2013 and into next year.

For more information about ACG's optical services, contact sales@acgresearch.net.

         Jeff Ogle
jogle@acgresearch.net   
    www.acgresearch

Sea of Change Ahead for the Optical Market

The financial and analyst community tend to roll up equipment vendors’ revenues for product lines into a single high-order number to gauge market size and simplify the reporting and analysis. GAAP reinforces this mindset as the majority of public companies that are equipment and/or software suppliers generally report only two types of revenue, product and service. Any further breakdown of financial disclosure is not mandated though some vendors provide it in the interest of providing more transparency to their shareholders. Yes, analyzing top-line revenue is a way to judge overall market size and gain a sense of direction, but if you look only at the market performance at the highest level you could easily get a false impression of the market and its opportunities.

The optical market is a good example of a calm surface that doesn’t immediately reveal the strong currents underneath. If we review the historical performance of the optical networking equipment market revenue (Fig 1), we see a spike in 2007 to 2008, which was driven by build-outs by wireless and wireline service providers. The wireless service providers were building 3G and 4G networks using optical as the preferred backhaul. The wireline service providers were building out business Ethernet services using optical metro rings and long-haul optical technology to interconnect the metros. Optical technology was also being deployed to interconnect data centers and to drive revenue growth.

Since the optical infrastructure build-outs that peaked in 2008, the overall market has remained relatively flat with some slight variation but averaging around $12.65 billion per year for the last four years. Based upon this top-line revenue growth, or lack thereof, you might quickly conclude this market is flat with little growth or upside revenue potential. 

However, by segmenting the optical networking market revenue along product/technology lines we see a vastly different view of the same market (Fig 2). The revenue spikes for the technology commonly used (MSPP, Metro WDM and Long-Haul DWDM) in wireless and wireline applications. Although MSPP seems to be in decline, the Metro WDM and Long Haul segments are showing growth. SONET/SDH and OXC are declining, both dropping well below the $100 million per quarter run rate. The POTS technology segment launched in 2008 has quickly grown to be a significant contributor to the optical market. The growth in POTS is somewhat cannibalizing the MSPP segment and has become a big contributor to the overall market.  

The true takeaway from all this is that the optical market is very dynamic with robust growth in specific segments and major declines in others. Similar to the router market, the optical market has benefitted from the de facto standardization of Ethernet and IP as the primary subscriber access technology for wire line networks. This combined with the users’ insatiable demands to support bandwidth-hungry video applications will continue to drive this market.

Competitors cannot be complacent and expect to grow at market rate by doing nothing more than what they have been. Because there is little Greenfield in this space, competition is fierce and vendors will be aggressive to win against or unseat an incumbent optical supplier. There is also a melding of the optical technology into the routers and vice versa that will tend to further confuse the market (as does the need for SDN in all network elements). Product technology cycles tend to run on a seven-year cycle, placing the next wave of network build-outs and expansion in the 2014 time frame. The industry will see optical convergence, SDN and terabit level trunking driving changes within this industry over the next several years.    

For more information about ACG Research’s optical services, contact sales@acgresearch.net.

         Jeff Ogle
jogle@acgresearch.net   
    www.acgresearch

Vendor Commitment to SDN in the Optical Environment

Not wanting to create the perception that their solutions are behind the times and anything less than state of the art, the telecommunications equipment vendors are always fast to embrace the next thing. However, the reality is that adopting new technology/methodology into diverse multivendor elements that comprise a service provider’s (SP) network is a significant undertaking. This has caused some of the larger content service providers such as Google and Facebook to undertake the building and deployment of their own private infrastructures to support their businesses. Because users’ demand for content delivery is outpacing the cost per bit to deliver the data, traditional SPs are getting squeezed. Simultaneously, the time to turn up a service offering has become a real and competitive advantage. This has forced SPs to look toward new approaches such as software-defined networking (SDN) to reduce service turn-up times and better leverage the infrastructure to support content delivery and achieve CapEx and OpEx benefits. But for SDN to deliver on these benefits it must work in a multivendor environment and end to end across all services supporting elements in the network.

Currently, this level of SDN deployment has only been achieved in a couple of private networks with proprietary implementations undertaken by the providers. Although this validates the need and benefits of SDN it by no means makes it mainstream. The question remains, how long will it be before SPs can implement SDN in a key portion of their networks such as optical transport? Examining some recently published vendor activity indicates just how ready for prime time this technology really is.

April 11, 2013, Ciena to Showcase Service Provider SDN at Open Networking Summit. Ciena demonstrated two service scenarios that leveraged the automation and central intelligence of its OPⁿ network architecture to show automated provisioning, virtualization and bandwidth on demand.

June 12, 2013, Cyan to Demonstrate the First SDN Application Spanning Enterprise, WAN and Data Center Environments at Interop Tokyo. This demo tested several use cases and showed interoperability between vendors. Cyan’s goal was to demonstrate the virtualization of the data center and network resources. It included members of the recently formed Blue Orbit Ecosystem

June 18, 2013, Coriant announces Intelligent Optical Control (IOC), industries first solution advancing SDN for optical networks. Coriant claims its solution, which is the first, allows for the optimization of the optical portion of the network. Its solution reduces CapEx by as much as 50 percent.

June 24, 2013, Infinera Demonstrates Transport SDN and Packet Technology on DTN-X Platform at Nissho Labs. This demo featured the DTN-X working with an external SDN controller and different network applications. It provisioned bandwidth on demand using OpenFlow and included VLAN switching and MPLS pseudo-wire transport over a 500G super-channel.

Although these press releases are show demos or lab trials they are key indicators of market direction and vendor uptake — to get to the demonstration stage the equipment vendors have invested in development resources to achieve this level of interoperability. The testing also helps harden the solution as nuances are identified and addressed by the vendors; it is a gauge of the technology maturity level of the solution. Multivendor environments must operate end-to-end to receive the full value and promise of an SDN networking environment. At this stage, at least for the optical transport portion of the network the equipment, vendors seem very committed to SDN and are poised to begin delivery of SDN ready systems in earnest as soon as 2014.  

For more information about ACG Research’s optical services, contact sales@acgresearch.net.

           Jeff Ogle

jogle@acgresearch.net   

     www.acgresearch

Ciena, Infinera and NSN Gain Market Position in 1Q WW Optical Long Haul DWDM Market Segment

In Q1, 2013 the worldwide revenue for the Long Haul DWDM market dropped from its average quarterly run rate of approximately $1 billion to $782M, a precipitous drop of 26.3% over the previous quarter yet 22.1% higher on a year-to-year basis. Y-Y this is the highest performing segment within the optical market segmentation. The top five players accounted for 83.1% of the available Long Haul DWDM segment market; however, one major difference in the 1Q optical market performance is the ranking of the more pure play optical vendors over the more traditional multitechnology providers. In 4Q only Huawei and Alcatel-Lucent made the top five. In 1Q Ciena, Infinera and NSN (Coriant) all advanced at least one rank; Infinera gained two ranks. 

1Q/13 Worldwide Optical Long Haul DWDM Market
Company	Rank	Market Share
Huawei	1	29.7%
Ciena	2	16.7%
Infinera	3	13.1%
Alcatel-Lucent	4	12.5%
NSN (Coriant)	5	11.1%

Market Drivers and Forecast

In addition to its traditional role in Metro, Long Haul and mobile backhaul networks, the optical market, in general, is also gaining traction within cloud and data center networks. Optical vendors have integrated their classic SONET/SDH, DWDM and packet optical products to offer single hardware architecture with scalable platforms targeted for different network deployment points that effectively maximize the solution for their installed bases. The more pure play optical vendors are also increasingly enhancing and adding to their transport capabilities with features such as fast rerouting and adding level 2.5 protocol support such as MPLS to climb the stack. These features help with network resiliency and provide more functionally and service deployment options to a carrier.

100G WDM is becoming the de-facto standard for Long Haul transport, driven by the need to support multiple 10G and 40G subscriber connections. The optical vendors are already working on ways to combine multiple 100G long haul connections to form super channels that will enable transport rates into the half terabit and ultimately full terabit line rates. This should better position the optical transport solutions against router technology, which is more expensive for higher speed interfaces.

With the demand for bandwidth continuing to increase and optical vendors adding value to their platforms to become better transport enabled, AGC predicts the Long Haul DWDM optical market segment will continue to grow 20–25% in 2013. 

For more information about ACG Research’s optical services, contact sales@acgresearch.net.

         Jeff Ogle
jogle@acgresearch.net   
    www.acgresearch