Connect
Related Content
On Twitter
TelecomTV One - News
(c) ijustwanttobeperceivedthewayiam (yes, really!) via Flickr under CC licence

Gloomy news for optical networking vendors

Posted By TelecomTV One , 23 November 2012 | 0 Comments | (0)
Tags: Optical Networking Research Ovum Ericsson Huawei NEC Alcatel-Lucent nsn ZTE Tellabs

A new study show global optical networking vendors battling for shrinking telco business, with no respite in sight. Guy Daniels reports.

Global optical networking equipment spending retreated for the third consecutive quarter in Q3 2012, compared with the year-ago quarter, reports research firm Ovum. It found that operators in troubled economies are running networks hotter in an effort to delay network projects and defer spending. Whilst seasonal increases in 4Q revenues are expected, Ovum believes market performance so far means growth over the whole of 2012 will remain flat.

 

The market continues to contract, and vendors with strong exposure to the weaker North America and European markets are cutting costs and restructuring operations in the hope of riding out the downturn until the situation improves. Ovum says global spending in Q3 dropped 1 per cent compared with 3Q 2011 to $3.7bn.

Advertisement
Whilst spending is up 14 per cent in Asia-Pacific compared to a year ago, it is not enough to offset declines of 11 per cent in North America, 8 per cent in EMEA and 4 per cent in South and Central America.

 

Ron Kline, principal analyst network infrastructure with Ovum, says preliminary analysis of the quarter’s results offers little positive news:

 

“The competitive environment is challenging at the moment. Many vendors are grateful just to see their business stay flat. It will be very difficult for the market to reach the 2 per cent growth we have predicted for the year. Now is the time to position next-generation products with operators which will have no choice but to turn spending back on in 2013.”

 

Ovum – like the rest of us – believes the current global economic problems will continue into 2013 at the very least, and could get potentially worse sh. A lot depends on the policy of the US government.

 

Ericsson, Fiberhome, Huawei and NEC were the only top vendors to post both sequential and year-over-year revenue growth. Nokia Siemens, Tellabs and ZTE posted sequential and year-over-year revenue declines, with Alcatel-Lucent’s quarterly revenues falling below $400m for the first time and its rolling revenues falling below $2bn for an all-time low.

 

Ovum is advising its clients that the global market will likely contract into the $14.5–$15bn range, a further retrenchment from its Q2 guidance.

 

please sign in to rate this article
49662