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Thin Times for Metro Optical Vendors
August 19, 2003
By Dan Muse
A combination of industry trends are not being kind to the metro optical equipment market, according to a new report by Probe Group.
The reasons for the disappointing revenue figures, according to the research firm's report Global Metro Optical Markets, 2002-2008, include the following:
Less than anticipated traffic demand
Further carrier capital expenditure reductions
Carrier consolidation and consequent availability of used/auctioned optical equipment
Slow onset of delivering profitable new data services in the metro
Price pressure.
Metro optical equipment vendors are also facing increasing pressure from carriers to produce equipment that is easy not only on capital expenses, but also on operational expenses. In response, many metro vendors have scrambled to release more compact, dense platforms as well as increased software automation features, according to Probe's Maria Zeppetella. "It is fair to say that much of the research and development budgets of optical equipment makers has been focused on enhancing their metro product lines."
Despite the R & D efforts, metro optical revenues for 2002 were still substantially lower than those of 2001 -- 46 percent lower. "First quarter 2003 revenues appear sluggish as well, although the metro optical market still looks rosier than that of long haul, which is still clearly suffering from overbuild," Zeppetella said. She said she expects a slow recovery in 2004 for the metro optical market, with metro Synchronous Digital Hierarchy SDH expected to account for the largest portion of metro optical revenues.
Global Metro Optical Markets, 2002-2008 is part of the Optical Infrastructure Markets series, which tracks and analyzes technology and market trends in optical networking with competitive analysis among key vendors.
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