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Ovum RHK, a market research advisory that specializes in telecom equipment and service providers, yesterday announced that based on a preliminary analysis of second-quarter 2007 results for optical networking equipment vendors, global revenues rose 14 percent versus the first quarter of 2007 and 20 percent compared to the same quarter a year ago quarter.
"Results were positive across all regions and all next-generation product segments," Dana Cooperson, vice president, Network Infrastructure at Ovum RHK, said in a statement. "Thanks to AT&T, spending was strong even in legacy long-haul DWDM.
The only disappointment, according to the research firm, was in the Japanese market. "Local vendors, most notably Fujitsu, beared the brunt of the stagnation there."
Ovum RHK reports that annualized spending reached $13.2 billion. Top ten vendors in terms of second quarter results included Alcatel-Lucent, Ciena, Huawei, NEC and Tellabs.
The firm attributed gains to the seasonal rebound in spending by Chinese customers, growth in North American metro and backbone DWDM deployments and general spending strength in EMEA.
Other highlights for the optical networking equipment market include the following, according to Ovum RHK:
Growth in metro WDM spending continues, topping $2.4 billion annually and beating last quarter's previous record of $2.2 billion.
Backbone DWDM spending also set records, with annualized next-generation backbone equipment spending exceeding $1.9 billion, 82 percent growth over the period ending for the second quarter of 2006
"Megavendors" Alcatel-Lucent, Ericsson, and Nokia Siemens Networks continue to shift competitive dynamics, with competitors trying to counter these large vendors' end-to-end, service, and equipment value propositions with specialist approaches.
Alcatel-Lucent remained the only vendor with over 20 percent share, as it grew revenues 23 percent sequentially and 30 percent over the same period last year..
Huawei posted the largest sequential gain (56 percent) of the top ten vendors due to seasonal strength in China and improving results around the globe.
Ovum RHK also reported that spending for IP and Ethernet transport and services was up 27 percent and 23 percent, respectively, over last year. Sales for the second quarter of 2007 grew to $2.6 billion overall, a 14 percent increase compared to one year ago.
"Alcatel-Lucent continued its strong IP/MPLS growth, Juniper networks looks to be making a turnaround,and Cisco returned to expected revenue levels," Mark Seery, vice president, Switching and Routing, at Ovum RHK, said a statement.
"Both IP and Ethernet over MPLS continue to grow strongly, driven by NGN [Next Generation Networks] service transformation and the move to packet-based wireline and wireless networks," Seery said.
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