Strong Growth Continues for the Worldwide Optical Networking Market in 2006

IDC: This year looks to be extremely positive for the optical networking equipment market. Outpacing the general growth of the telecommunications market, the worldwide optical networking market will increase at a 12% compound annual growth rate (CAGR), rising from $7.9 billion in 2005 to over $13.9 billion in 2010.

Prospects for the optical networking market continue to improve as service providers are replacing legacy equipment with next-generation equipment faster than expected. Growth in Metro WDM and multi-service provisioning platforms is being driven by a combination of carrier broadband services, initial and planned video services, cellular data services, and established disaster recovery plans.

Providers will continue their investments in the metropolitan space, showing a preference for single optical rings based on reconfigurable optical add/drop multiplexing (ROADM). Although most attention is focused on the technology, which allows add/drop capabilities and degree of direction, the cost of the other optical components that may or may not be integrated into ROADMs must decrease for this market to really explode.

Service provider consolidation is driving vendors to find new outlets for revenue, thus the interest in the optical vertical segment is growing. We have seen significant growth in private optical networks, deployed by large enterprises such as financial institutions, health care organizations, and educational institutions, as well as all levels of government. This trend to continue and contribute to the market growth in 2006.

Worldwide Optical Networking 2006-2010 Forecast

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