Strategic Deployment Will Double International DWDM Market Within Four Years, Says New CIR Report
CHARLOTTESVILLE, Va., Jan. 11 /PRNewswire/ -- The worldwide market for dense wave division multiplexing (DWDM) gear will more than double in the next five years, as service providers around the globe begin to utilize DWDM to become least cost providers of bandwidth. So says a new report from Communications Industry Researchers, Inc., (CIR) an optical networking market research firm based here. According to the report, expenditures on DWDM equipment for deployment outside of North America will amount to approximately $1.2 billion this year, growing to $2.9 billion in 2004. (See the following table)
The new CIR report Wave Division Multiplexing, Photonic Switching and the Coming of All Optical Networks 1999-2000, Volume 2, International Market Opportunities points to the fact that while most service providers are still installing DWDM only on especially busy routes, DWDM will become major strategic technologies for many service providers as competition heats up for them. According to CIR, the growing intensity of competition in international markets will cause service providers to seek new ways of lowering the cost and time to market for new high bandwidth services and DWDM and other optical networking systems, such as optical switches, will provide a way of meeting such goals.
Europe Leads the Way
Wave Division Multiplexing, Photonic Switching and the Coming of All Optical Networks 1999-2000, Volume 2, International Market Opportunities says that such trends have gone the furthest in Western Europe, where an apparently ever growing number of service providers are in the process of building backbone facilities. These service providers have different motivations. For example, Global Crossing is building its Pan European Crossing to provide raw bandwidth to other service providers and large end users, while France Telecom and British Telecom are building European backbones to support the next generation of value added services. Both motivations have led these carriers to deploy terrestrial DWDM systems extensively in their European networks and as other service providers catch on to the trend, the European DWDM market is expected to increase from $580 million now to $1.2 billion in 2004.
After Europe, Wave Division Multiplexing, Photonic Switching and the Coming of All Optical Networks 1999-2000, Volume 2, International Market Opportunities claims that the next biggest market for terrestrial DWDM systems is the Pacific Rim, although the market in this region for terrestrial DWDM systems is still quite small. According to CIR, this market will be worth about $170 million this year, but will take a quantum leap up to $600 million by 2004. Such rapid growth will in part be due to the growing deregulation in the region. CIR notes, in particular, that the emergence of significant new competition to NTT, the Japanese incumbent carrier, is a driving factor for DWDM in Japan and that NTT has only just begun to make commercial deployments of DWDM in its networks. Various Chinese service providers have also been buying DWDM for the past few years and CIR expects to see more do so as the Chinese government pursues its policy of bringing the most advanced technologies to China.
DWDM in the Cities and Under the Water
CIR believes that outside of Europe and the Pacific Rim, the market for terrestrial DWDM systems will remain quite small. There have already been some deployments of DWDM by service providers in Latin America, especially in Brazil, and CIR expects the Latin American market to grow throughout the forecasting period. However, by 2004 annual expenditures on terrestrial DWDM system by Latin American carriers will still only amount to $175 million. CIR has also identified a small market for DWDM in Africa, but for the time being, most of that market is concentrated in South Africa.
Almost all the expenditures outlined above will go on terrestrial long- haul systems. However, CIR foresees that there will also be a growing need for metro DWDM systems and projects that while the expenditures on such systems will amount to only $72 million in 2000, these expenditures will grow to $231 million by 2000. CIR believes that a major source of these expenditures is going to be the European carriers. SDH rings around major cities in Europe are already quite common, and it is merely a matter of time, before DWDM rings are used in the more crowded commercial centers.
As Wave Division Multiplexing, Photonic Switching and the Coming of All Optical Networks 1999-2000, Volume 2, International Market Opportunities points out, while terrestrial systems will continue to dominate the international DWDM marketplace, the submarine DWDM market is also large and growing. Approximately $400 million will be spent on submarine DWDM systems worldwide in 2000, according to CIR and this figure will grow to $900 million by 2004.
Players
Submarine DWDM is a business dominated by Alcatel, which is also a player in the terrestrial long-haul business. However, in the terrestrial business Ciena, Lucent and Nortel also hold large shares with Ericsson, Siemens and Pirelli (recently acquired by Cisco) also having significant slices of the international DWDM pie. Most of the new optical networking start-ups appear to still be U.S. oriented, but CIR expects this to change as European and Pacific Rim carriers begin to deploy the most sophisticated optical networking technology. Europe is also beginning to give birth to its own optical networking start-ups, such as Algety, Dynarc and Qtera.
Wave Division Multiplexing, Photonic Switching and the Coming of All Optical Networks 1999-2000, Volume 2, International Market Opportunities provides a full assessment of the new revenue potential from optical networking in the countries of Europe, Latin America, Africa and the Pacific Rim. It includes profiles of all the major optical networking equipment vendors and service providers deploying this technology both in the submarine and terrestrial environments, along with five year forecasts broken down by region (Europe, Pacific Rim, Latin America and Africa) and equipment types (terrestrial long-haul, submarine and metro). CIR has also compiled comprehensive DWDM expenditure forecasts for each of the major service providers in each of the regions covered. These are not included in the report, but can be purchased separately from CIR.
This new CIR report is part of a two-volume study on DWDM and optical network -- the first volume, which is currently available, covers North American DWDM markets. Both volumes are expected to become required reading for vendors, leading edge service providers and the financial community. The Table of Contents for both volumes of Wave Division Multiplexing, Photonic Switching and the Coming of All Optical Networks 1999-2000 are available at CIR's Web site cir-inc.com. The report is priced at $2,995. For those who purchase both volumes, the price is $5,000 for the set. CIR's reports are also available in PDF format at an additional charge. Further details of this and other CIR studies can be obtained from Robert Nolan at 617-923-7611 or email to: rob@cir-inc.com.
Based in Charlottesville, Virginia, Communications Industry Researchers, Inc. was founded in 1979. The company publishes market studies and carries out demanding custom market research assignments on the commercial aspects of new communications technologies. CIR specializes in the areas of optical networking and network intelligence It provides objective expertise for the vendor, service provider and user communities that is client focused but not client directed.
DWDM Markets Outside North America ($ millions)
2000 2001 2004
Submarine Systems 440 586 906
Europe 578 779 1184
Pacific Rim 169 259 602
Other 60 92 193
GRAND TOTAL 1246 1715 2885
SOURCE Communications Industry Researchers, Inc.
/CONTACT: Robert Nolan of Communications Industry Researchers, Inc.,
617-923-7611, or email: rob@cir-inc.com/
/Web site: http://http://www.cir-inc.com/ |
