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Optical network systems revenue jumps 15% in 2Q12

After a down quarter over the first three months of 2012 optical network systems manufacturers saw sales increase sequentially by 15% in 2012, according to market research firm Infonetics Research. However, year-on-year, 2Q12 was off 10% Infonetics says in its 2Q12 Optical Network Hardware vendor market share report.

For many companies, future prospects depend on their product mix, says Infonetics

"The optical hardware market outlook looks decidedly different depending on which market you sell into," explains Andrew Schmitt, principal analyst for optical at Infonetics Research. "While spending on WDM is reasonably healthy, SONET/SDH is sailing off a cliff. Vendors who have good WDM products but large exposure to SONET/SDH are struggling to replace lost revenue fast enough to show growth."

For example, North American SONET/SDH spending shrank 45% in the second quarter year-over-year. Those companies with heavy exposure to AT&T suffered in particular, as that carrier has cut its SONET spending significantly. Overall, WDM equipment now accounts for 80% of all optical spending in North America, according to Infonetics.

Huawei extended its market share lead during the quarter, thanks in part to an uptick in spending by carriers in the Asia Pacific sector. Winds from this direction will continue to fill Huawei’s sails as well as boost ZTE, Schmitt believes. "Asia Pacific notched a big increase in the second quarter, with large seasonal gains by Huawei and ZTE,” he says. “Despite tepid growth in the first half of 2012, we expect significant growth in optical spending in China, where ZTE continues to take market share from Huawei."

Alcatel-Lucent held onto second place in optical network sales, thanks to a revenue increase of 5%. Ciena posted its strongest quarter ever to maintaining third place overall and slip into second in WDM sales. This chart shows the current market share standings:

Despite repeated lamentations about the region’s economic state, optical equipment sales in Europe, the Middle East, and Africa (EMEA) rose strongly in 2Q12, although followed the overall trend of failing to match sales in the second quarter of 2011. Spending growth on WDM equipment outpaced that on SDH gear, which Infonetics sees as a positive indicator for the region as it implies carriers were doing more than just maintaining current systems.

Infonetics' quarterly Optical Network Hardware report covers worldwide and regional market share, market size, and analysis for metro and long-haul SONET/SDH and WDM equipment, Ethernet optical ports, SONET/SDH/PoS ports, and WDM ports.

GPON leads access market growth through 2016 says DellOro Group

A new five-year forecast by Dell’Oro Group predicts increased sales of GPON optical line terminals (OLTs), DOCSIS 3.0 CMTS and VDSL infrastructure equipment through 2016. Driven by growing bandwidth requirements, the report say that GPON will show the fastest growth, followed by CMTS and VDSL, offsetting a trend of declining revenue for slower-speed ADSL equipment.

“Our forecast for GPON growth is driven by deployment in China as well as increasing projects in other global regions,” says Steve Nozik, principal analyst of access research at Dell’Oro Group. “For CMTS, growth will be driven by rapidly increasing Internet traffic, competition with telecom service providers, and an increasing focus on the small and medium-sized business market among cable operators as well as a migration to IP video service.”

The report also expects DOCSIS to continue as the primary cable broadband technology for at least the next five years due to additional channel bonding being used to meet increasing bandwidth needs. VDSL growth will be driven by its higher bandwidth capabilities in association with emerging vectoring technology aimed at extending the life of copper infrastructures by eliminating crosstalk.

Ukraine's Eurotranstelecom taps Ciena for 100-Gbps coherent optical technology

After the 2011 collaboration on the first 100-Gbps link in Eastern Europe (see "ETT, Ciena deploy first commercial 100G network in Eastern Europe"), Ukrainian telecommunication operator Eurotranstelecom (ETT) and Ciena announced the nationwide rollout of Ciena’s 100-Gbps coherent optical technology in ETT’s backbone network. With this deployment, ETT extends its original 100-Gbps network connecting Kiev and Kharkov to cover all major Ukrainian regional centers, including Lvov, Donetsk, Odessa, and Dnepropetrovsk. It also provides high-speed support for traffic from European, Ukrainian and Russian operators.

“As 100-Gbps adoption gathers momentum globally, large demand-driven deployments such as this one are also testament to the bandwidth explosion that the Russia/CIS region is going through at the moment,” says Sergei Fishkin, Ciena’s regional managing director for Russia, CIS and the Baltics. “With the growing adoption of high-bandwidth applications such as cloud computing, high-capacity networks are becoming more instrumental than ever before in allowing operators to meet the requirements of their customers.”

With the rollout, ETT can operate 10-, 40-, and 100-Gbps channels simultaneously while providing a seamless upgrade to higher capacities as bandwidth requirements on its network change in the future.

ETT operates its own underground fiber-optic cable network along railways, covering all major regions in Ukraine. The operator has its own national DWDM, SDH, and IP/MPLS networks, offering IP transit, data and voice transmission, lambda services, collocation, dark fiber renting, and maintenance services to clients.

China Mobile to deploy Huawei FTTW gear for WLAN mobile backhaul

China Mobile Shangdong Branch (Shangdong Mobile) deploy Huawei’s GPON fiber-to-wireless (FTTW) offering in 17 cities of Shandong province to backhaul wireless local area network (WLAN) data streams and help Shangdong Mobile provide 54-Mbps Internet access for 50,000 WLAN hotspots in schools, offices, transport hubs, hotels, leisure places, downtown areas, and residences.

The FTTW equipment will be deployed in Shangdong Mobile’s E2E mobile backhaul network, covering the optical line terminal (OLT) in the central office, the optical distribution network (ODN), and the optical access equipment for multi-dwelling units (MDUs).

The combination of WLAN and existing mobile communication networks provides high-speed mobile broadband access, says Huawei. This enables users to work away from their offices, browse websites, send and receive emails, watch online movies, and download large files on the fly.

XO Communications chooses Nokia Siemens Networks for nationwide 100G network

Communications service provider XO Communications has begun rolling out 100-Gbps wavelengths on a U.S. nationwide fiber-optic backbone network using coherent-based technology from Nokia Siemens Networks. XO chose Nokia Siemens Networks’ technology over that of its other incumbent long-distance platform supplier, Infinera.

According to XO Senior Vice President and CTO Randy Niklas, the first-of-its-kind national network initially will see four to six wavelengths of 100-Gbps traffic traveling over previously unlit fiber. The routes will have the capacity to handle 96 wavelengths, either with newly installed Nokia Siemens Networks hiT7300 systems or, in the near-term future, upgrades to the hiT7300 platforms XO already had in its network.

The 100-Gbps wavelengths will derive from multiplexed 10-Gbps traffic, Niklas told Lightwave. However, conversations are already underway with wholesale and client service customers who might require 100-Gbps connections. Along these lines, XO has completed 100-Gbps interface certification on Cisco routers and is doing the same with Juniper Networks routers, Niklas added.

Niklas said that XO did not conduct an RFP for the backbone project, but turned to its incumbent suppliers. He said Nokia Siemens Networks was chosen because it could deliver 100-Gbps capabilities to XO’s amortization targets better than Infinera. “And we frankly got good business terms,” he added.

XO has partially completed the roll out, with work ongoing in its West Coast, Northeast corridor, and southwest territories. Meanwhile, the company has already turned its attention to shorter reach applications, thanks to interest from a major wireless carrier customer that wants 100-Gbps connectivity to its switching centers. To meet such requirements, XO also is certifying platforms from Ciena and Cisco for 100-Gbps performance.

This is the first announced 100-Gbps customer in North America, Jim Benson, head of Optical Networks for the Americas at Nokia Siemens Networks, confirmed. However, he indicated that XO isn’t the company’s only customer on the continent. Nokia Siemens Networks announced a pair of European 100G customers previously.

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