Colocation growth rises, but varies by geography; North American WDM market rises

Colocation growth varies by region: As more service providers roll out cloud services for their business customers, colocation capacity has continued to rise in various geographies, reports TeleGeography. In North America, colocation growth varied. While some markets such as Dallas, Seattle, and Toronto saw capacity increase 20 percent and 28 percent, in New York and Washington, D.C., two of the world's largest colocation markets by floor space, grew only 12 percent and 11 percent, respectively. Leading the European market was Paris, which grew 25 percent to 2.6 million square feet. Frankfurt, Zurich, and Moscow also reported colocation growth of 16-18 percent compounded annually. However, in London, colocation capacity increased by only 8 percent. Finally, in Asia colocation capacity grew 15 percent compounded annually in both Singapore and Mumbai, while in Hong Kong it grew 34 percent per year, due largely to sizable investments by a couple of service providers. But in Tokyo capacity increased only 4 percent annually over the past four years. Jon Hjembo, a TeleGeography analyst, said that while colocation providers have continued to increase capacity to meet potential demands, "vacancy rates fluctuate widely within metro areas." Post

Telegeography colocation 2013

North American WDM market rises up: Driven by ongoing deployments of 100G by major service providers, the North American WDM market grew almost 20 percent in the first nine months of 2013, says a Dell'Oro Group report. From a vendor perspective, Ciena (Nasdaq: CIEN) and Fujitsu led the market, growing 9 and 65 percent, respectively. Driven by customer wins at service providers such as Shentel and TeliaSonera International Carrier (TSIC), Cisco (Nasdaq: CSCO) and Infinera (Nasdaq: INFN) reported 1 and 22 percent growth. "Demand in North America for optical transport equipment has been really strong," said Jimmy Yu, vice president of optical transport research at Dell'Oro. "Market revenue for WDM equipment in North America has increased year-over-year for the past three quarters." Reflecting a similar forecast made by Infonetics, Yu added that "we do expect equipment sales to be softer in the current fourth quarter as service providers conserve their capital." Release

Competition, friendly regulation drives Latin America FTTx: Latin America's fiber market may be still relatively nascent, but a mix of competition and friendlier regulatory policies will drive growth of fiber-based broadband. According to a Pyramid Research report, FTTx will rise from 2.2 accounts in 2013 to 11.8 million in 2018. With the exception of Western Europe, the research firm said it expects FTTx accounts to expand at a 40 percent compound annual growth rate (CAGR). What's hindered FTTx growth are inefficient and unbalanced telecom regulations. In Mexico, the lack of local loop unbundling (LLU) and a ban on incumbent telcos like Telmex from selling IPTV services has required competitive providers to build their own fiber networks to provide broadband and TV services. Daniele Tricarico, analyst at Pyramid Research, said that "supply-push forces" such as regulatory frameworks that encourage fiber deployments and cable and wireless competition "are playing the decisive role in the growth of fiber broadband." He added that without the presence of these supply side factors, service providers "are less likely to make the substantial investments needed to offer fiber broadband service." Release

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