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Week in research: Network transformation drives telco equipment growth; CPE shipments climb

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Network transformation to drive telco growth: Despite an economy that continues to be challenging, the telecom and datacom equipment and software market has held steady worldwide. In 2010, it grew 19 percent; in 2011 it saw 7 percent growth; and in 2012 it held steady at $172 billion. The market will continue to see a CAGR of 4.9 percent between 2013 and 2017, an Infonetics Research report says, as service providers and enterprises spend $1 trillion on telecom/datacom equipment and software. "Even though there's tremendous uncertainty about the health of the global economy and prospects for economic growth in the short term, the telecom and datacom equipment and software market is on track to grow annually through 2017, driven by major network transformations," said Jeff Wilson, principal analyst at Infonetics. Cisco (Nasdaq: CSCO), Ericsson (Nasdaq: ERIC), Huawei and Alcatel-Lucent (NYSE: ALU) are the top 4 vendors in this market segment. Release

Infonetics telecom datacom equipment 2013

Packet Optical remains strong: Likewise in the optical equipment segment, growth is the watchword as demand for capacity continues to increase, Dell'Oro Group reports. The firm predicts that optical packet product revenues will see a CAGR of 19 percent between 2013 and 2017, nearing $11 billion. "We believe optical transport equipment deployments will be driven by two main factors," said Jimmy Yu, vice president of optical transport market research at Dell'Oro. "The first will be the need to increase network capacity as economically as possible, which will drive the need for 100 Gbps DWDM wavelengths. We forecast 100 Gbps DWDM wavelength shipments to grow at an 80 percent CAGR. The second factor will be the need to transport packets more efficiently as data and video traffic dominate the network, driving the move towards optical packet platforms." Release

CPE is in the house: Broadband consumer premises equipment (CPE) device shipments are on an upswing, with ABI Research estimating that 149.4 million devices will ship in 2013 compared to 144.9 million last year. Interestingly, DSL and cable CPE shipments will not drop even though fiber-based CPE has been gaining market share. Thanks to the advent of VDSL and DOCSIS 3.0 technologies, service providers are able to push their legacy and coax networks further. "Since these advanced technologies allow DSL and cable operators to compete with fiber optic broadband operators in terms of price and service quality, VDSL and DOCSIS 3.0 CPE device shipments have grown year-over-year," said Khin Sandi Lynn, industry analyst. ZTE and Huawei sit atop the CPE device manufacturer list. Release