European carriers see upswing in optical-network equipment spending

Dec. 1, 2003

Telecommunications-carrier responses to the "Optical Networking Equipment Survey 2003" from KMI Research (Providence, RI) indicate that carriers plan to increase their optical-networking equipment spending in 2004 and beyond.

"Across all regions and among all types of carriers surveyed, expectations are that there will need to be a spending increase in the next couple of years as capacity on the presently deployed equipment becomes increasingly filled up," reports KMI analyst Michael Arden. For example, 35% of respondents indicate their 2003 purchases of DWDM equipment will increase over their 2002 purchases. For 2004, 59% of respondents indicate an increase in year-over-year DWDM spending.

This is the second year that KMI has conducted a Web-based survey of telecom operators to get a quick mid-year "progress report" on carriers' spending and plans for optical-networking equipment. In the July 2003 survey, KMI received responses from 141 carriers worldwide, with 18% in Europe, 2% in Middle East/North Africa, 31% in Asia-Pacific, 44% in North America, and 5% in Latin America.

The survey data shows a shift in the type of optical-networking products to be procured in the near future. As carriers look to evolve their networks to more intelligent systems, equipment manufacturers will see an increase in spending on optical add/drop multiplexers (OADMs), optical crossconnects (OXCs), next-generation SONET/SDH transmission equipment, and similar advanced technologies. Also, the presence of Ethernet will increase in networks—both long-haul and metro—over the next several years. For instance, the survey's data reveals that carriers expect to increase OADM deployment during 2003–05. At the same time, there will be a shift to more advanced OADMs. The percentage of carriers that will be deploying at least 40% of their OADMs as reconfigurable OADMs (versus fixed) will increase among all types of carriers surveyed.

KMI's "Optical Networking Survey 2003" provides carrier insight into such topics as bandwidth demand growth trends; deployment of Ethernet line cards; and spending trends for SONET/SDH, digital crossconnects, DWDM, and OXCs. More information can be found at www.kmiresearch.com.