OTE Global Growth Slow in Q408

According to a report from the Dell’Oro Group, revenue in the Optical Transport Equipment (OTE) space grew sequentially in the last quarter of 2008, but revenues in the quarter were lower than the second quarter of 2008. The report indicates that the Optical Transport market grew 12 percent in 2008 and is forecasted to decline 9 percent in 2009.

 “As anticipated, due to a weakening economy, the fourth quarter did not have a large seasonal uplift that is typical at the end of the year,” said Jimmy Yu, Director of Optical Transport research at Dell’ (News - Alert)Oro Group.

As TMCnet previously reported, a five year analysis by Dell’Oro forecasted the OTE market would experience a significant slowdown in 2009, however predicted it to pick up in 2010 and continue to grow steadily till 2013.

On dissecting revenues accrued for fourth quarter 2008, based on geographic zones, it noted that in North America, Europe, the Middle East and Africa there was no growth when compared with the third quarter 2008. However, there was significant quarter-on-quarter growth in Asia and the Asian Pacific rim. This region chalked up more than 33 percent of total revenue thereby helping to pull up the global average.

Another encouraging trend to emerge was the fact that 80 percent of the quarter-on-quarter growth was accounted for by the increased deployment of 40 Gigabit Dense Wavelength-Division Multiplexing (DWDM).

Originally, WDM evolved to combine multiple digital streams emanating from different signal ranges in a fiber optic network into a single stream on a solitary glass or plastic strand of fiber by using various wavelengths of laser light. WDM technology handles 160 signals or 10 Gigabits per second per strand and provides 16 channels at 2.5 GHz spacing.

DWDM, by contrast, can support 40 channels at 100GHz, 80 channels at 50GHz and even 160 channels at 25GHz spacing therefore increasing speed and amount of data exchanged at least fourfold and that, too, with rock bottom calculations.

Alcatel-Lucent, Huawei, Nortel (News - Alert), and Ericsson led the charge in Q408 and together accounted for more than 50 percent of the market, with the last three sequentially gaining the market share.

All global trends, including the substantial increase of broadband usage, as reported by TMC (News - Alert), indicate that the OTE market revenues will eventually grow via this 40 Gigabit DWDM route.