SEPTEMBER 28, 2006 -- Worldwide sales of reconfigurable optical add/drop multiplexing (ROADM) gear will break the $250 million mark for the first time in 2006 and will grow to $920 million in 2011, for an average annual growth rate of almost 30 percent, according to a new report from Heavy Reading.
"IPTV and triple-play services are the biggest drivers for ROADM deployment," notes Scott Clavenna, chief analyst with Heavy Reading and author of the report. "ROADMs are the primary link between IPTV and optical, so where IPTV is rolled out, ROADMs will follow. ROADMs are an excellent way for optical transport vendors to ride the massive tide of consumers and content lifting other telecom segments."
Clavenna cautions that the long-term success of the ROADM sector depends on telco commitments to offer video services over their networks. "If telco IPTV build outs get scrapped or postponed, the ROADM market will suffer," he adds.
The ROADM and WDM markets involve most of the world's largest telecom equipment makers, including Alcatel, Cisco Systems, Ericsson, Fujitsu, Huawei Technologies, Lucent Technologies, Nortel Networks, and Siemens. In total, the report profiles and analyzes 17 different providers of ROADM and WDM gear and assesses the competitive positioning of six leading suppliers of ROADM subsystems, including JDSU.
Other findings of ROADM & WDM Worldwide Market Forecast, 2006-2011 include:
- North America currently generates the lion's share of ROADM revenues, but the market opportunity is global. North American service providers are leading the ROADM charge, led first by cable MSOs building video-on-demand (VOD) infrastructure, and now by large telcos building IPTV and video networks to challenge cable's hold on consumer entertainment. However, activity has been picking up in Europe and Asia throughout 2006.
- The overall metro WDM market has hit its stride with good, but slowing, growth prospects. Worldwide metro WDM revenue reached $1.3 billion in 2005, seven years into its existence as an equipment segment. Heavy Reading forecasts that metro WDM revenue will increase at a 12 percent compound annual growth rate (CAGR) from 2006 to 2011, to reach $2.8 billion. At that point, ROADMs will account for roughly a third of the overall metro WDM market.
- ROADM subsystem revenue will keep pace with the market for ROADM systems. Heavy Reading projects double-digit annual revenue increases over the next five years for the ROADM subsystem market, which will quadruple in size as ROADM networks proliferate.
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