Packet transport rebound offsets optical transport weakness in 1Q21: Cignal AI
Network transport equipment spending grew 4% in the first quarter of 2021, with strength in packet transport sales offsetting a slightly negative quarter for optical transport, according to Cignal AI. Chinese network operators didn’t help matters in either niche, however, the market research firm states in its most recent Transport Hardware Report.
Softness in the China and North American markets dragged down optical network hardware sales in the first quarter, enough to overshadow year-over-year growth in all other global regions. Sales in China shrank nearly 10%, despite being compared to a weak 1Q20, Cignal AI says. The market research firm says the downturn was a surprise, given China has resolved its COVID issues and has been rapidly expanding its 5G, OTT, and regional interconnection activities.
“Chinese spending on optical transport hardware has plateaued as major 5G network builds mature and new projects have not been initiated,” commented Scott Wilkinson, lead analyst for transport hardware at Cignal AI. “China's extraordinary growth during 2015 to 2018 could not continue long term due to the impracticality of expanding upon the enormous amounts that had already been spent in the region.”
Conversely, EMEA's optical hardware sales in the quarter by more than 20% versus the year-ago quarter. Despite losing contract bids at customers such as Swisscom and Deutsche Telekom, Huawei maintained its market share lead in the region.
Meanwhile, the worldwide packet transport space saw sales grew in the edge, core, and aggregation niches all increase by more than 10% versus an especially weak 1Q20. Japan continued to be a star, with spending up nearly 40% year over year. Established carriers (rather than newcomers like Rakuten) led the way. Cisco continued to benefit most from sales in the region, and the company more than doubled its packet transport sales versus 1Q20.
Cignal AI’s quarterly Transport Hardware Report examines optical and packet transport equipment revenue across all regions and equipment types. The initial analysis is based on financial results, independent research, and guidance from individual equipment companies. Hardware forecasts are reviewed and updated in the following weeks, along with spending trends by operator type. The report includes revenue for metro WDM, long-haul WDM, and submarine (SLTE) optical equipment, and access, aggregation, edge, and core packet equipment in six global regions.
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Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
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