Global ON market to reach US$20bn by 2017, Ovum predicts

The global optical networking (ON) equipment market is expected to reach US$20 billion by 2017, according to new research from Ovum. The research company projects an upbeat long-term forecast for ON sales, driven by new data centre demands.

Latin America will be the region with the highest growth, according to Ovum, driven by network modernisation efforts to enhance regional connectivity in support of mobile and broadband access network buildouts. Ovum predicts North America will continue to grow solidly as tier-1 network operators embrace new 100G technology to meet increasing data centre needs. Asia-Pacific growth may slow after five years of rapid growth, while Ovum anticipates the EMEA (Europe, Middle East and Africa) market will expand.

“The new bandwidth driver is data centres,” said Ian Redpath, principal analyst in Ovum’s Network Infrastructure practice. “Large-scale data centres continue to be built out - both the multitenant, carrier-neutral variety and private data centres.

“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.”

In North America, the next generation of network technology, 100G, is ready, Ovum said, while over 150 data centres outside central London require high-bandwidth interconnection. The Chinese ON market has tripled in size in the past five years and continues to grow, Redpath said, and there is still a wave of high-speed fixed broadband and next-generation mobile to come. Rising incomes in Latin America are benefiting the ON market, enabling network operator revenue growth.

“All told, the global optical network market is at a very interesting point in its evolution,” Redpath concluded. “New demands are arising just as the industry’s latest technology offering is coming to fruition.”