Infonetics: OTN poised for growth, while P-OTS vendors battle for top spot

As more service providers update their respective optical networks to 40G, 100G and beyond, Optical Transport Network (OTN) and Packet-Optical Transport Systems (P-OTS) are becoming the platforms of choice.

Infonetics, in its latest report, OTN and Packet Optical Hardware, revealed that the OTN transport and switching market is forecast to grow at a 17 percent Compound Annual Growth Rate (CAGR) between 2011 and 2016, surpassing the 5.5 percent CAGR of the overall optical equipment market.

"OTN is on the fast track to outpacing the overall optical market within the next 5 years," notes Andrew Schmitt, principal analyst for optical at Infonetics Research. "Nearly half of all 2011 optical equipment spending worldwide was on OTN transport and switching hardware, and by 2016 we expect this to rise to almost 80%, with the burgeoning OTN switching segment growing the fastest."

From a vendor perspective, Huawei is the dominant OTN transport vendor, followed by Alcatel-Lucent (NYSE: ALU) and Ciena (Nasdaq: CIEN).

Alongside OTN, Infonetics forecasts that service providers overall will spend a cumulative $6.6 billion on second-generation P-OTS platforms that incorporate both Ethernet and OTN/SDH switching between 2012 and 2016.

Dominating the P-OTS segment are six vendors: Cisco (Nasdaq: CSCO), Tellabs (Nasdaq: TLAB) and Alcatel-Lucent, Fujitsu (OTC: FJTSY.PK), Ciena, and Huawei. While Cisco, Tellabs, and Alcatel-Lucent currently hold the top three spots, they will continue to face new challengers in Fujitsu, Ciena, and Huawei, which are also gaining momentum.

Service providers continue to make progress with deploying P-OTS and OTN platforms to build optical backbones to support their mix of high speed business services like Ethernet, consumer broadband and wireless. Notable developments in this arena include both Verizon and Sprint, both of which are leveraging Ciena's P-OTS equipment as part of their respective 100G deployments.

Complementing its ongoing long-haul optical deployments in both the United States and in Europe, Verizon plans to integrate Ciena's control plane technology and its 5430 Reconfigurable Switching System as part of an upcoming effort to drive 100G into its metro networks and extend its global mesh strategy into the U.S. market.

But the interest in P-OTS and OTN is not just a traditional incumbent carrier phenomenon. Competitive and regional providers like XO Communications and Minnesota's Northeast Service Cooperative are also finding utility in these platforms to support their own network initiatives.

For more:
- see the release

Special report: In detail: Following the Packet Optical Transport Systems (P-OTS) evolution

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