North American optical transport woes will continue into 2015, 2016, says Dell'Oro

Service providers' cautious capital spending trends contributed to a 13 percent year-over-year decline of the North American optical market in the third quarter of 2014, according to a new Dell'Oro report.  

A large portion of the optical transport equipment revenue decline in North America was due to a 17 percent year-over-year decline in WDM-based equipment for metro applications.

"Optical equipment demand was quite robust in North America leading up to the third quarter," said Jimmy Yu, vice president of optical transport research at Dell'Oro Group. "Within one quarter, however, the optical market took a sudden and negative turn as major tier-one North American service providers reduced deployments and cut spending on transport equipment." 

Yu added that the pain of slow spending will continue into 2015 and 2016.

"The remainder of this year and next year may not be much brighter as one of the largest telecom operators, AT&T, intends to cut its capital spending in 2015, and is poised to refrain from certain network expansion until the Federal Communications Commission (FCC) clarifies its net neutrality policies," Yu said.

Dell'Oro's summary echoes similar findings from Infonetics, which revealed in its own report that the overall global optical market dipped 5 percent year-over-year as Tier 1 telcos become cautious about spending capital on new network builds.

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