As more service providers deploy 100G optical across their networks, it is driving up optical transport network (OTN) and packet optical transport system (P-OTS) revenues for Alcatel-Lucent (NYSE: ALU), Ciena and Infinera, the industry segment's key suppliers.
According to a new Infonetics Research report, OTN switching and P-OTS revenue rose 35 percent year-over-year.
The research firm said that the global optical transport network (OTN) market totaled $4.3 billion in the first half of 2014, up 9 percent from the first half of 2013. In particular, the majority of OTN switching growth is being seen in North America, while EMEA spending has slowed.
"The dramatic growth of OTN switching we saw last year carried over into the first half of 2014 (1H14), with revenue soaring 35% from the same period a year ago as deployment is catalyzed by service providers continuing rollouts of 100G coherent technology," said Andrew Schmitt, principal analyst for carrier transport networking at Infonetics Research. "Most of the growth in OTN switching is coming from North America as spending trends stagnate again in EMEA."
Schmitt added that the "P-OTS market is also up 35% in 1H14, as providers continue to favor packet optical systems that combine OTN and Ethernet switching over more complex and expensive carrier Ethernet systems."
While Ciena, Cisco, Coriant, Fujitsu and Huawei are the dominant incumbent P-OTS players, an emerging group of younger companies such as BTI, Cyan and Transmode are becoming a larger factor with pure-play P-OTS platforms.
Chinese-based vendors Huawei and ZTE are also benefitting as key customers like China Telecom adopt OTN in their network.
Infonetics has forecast that the OTN market will grow at a 12 percent compound annual growth rate (CAGR) from 2013 to 2018, slightly faster than the wavelength division multiplexing (WDM) segment.
- see the release
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