Broadband aggregation, router, switch markets grow

CALIFORNIA, USA: Broadband aggregation equipment revenue rose five per cent in 2Q12 over the previous quarter, to $1.72 billion, finds research firm Infonetics Research in its second quarter 2012 (2Q12) PON, FTTH, and DSL Aggregation Equipment and Subscribers report.

"Stimulus-based broadband deployments and Verizon's continued purchase of optical network terminals are finally starting to move the needle in North America, where spending on GPON equipment surpassed the $100 million mark for the first time since 2010," notes Jeff Heynen, directing analyst for broadband access and video at Infonetics Research.

2011 saw record spending on broadband aggregation gear, especially in China, so year-over-year growth in 2012 is going to be challenging; case in point: 2Q12 global revenue, while up from the previous quarter, is down eight per cent from 2Q11.

"China posted its second largest PON quarter on record, thanks to both new and ongoing projects at big 3 operators China Telecom, China Unicom, and China Mobile," Heynen adds.

Huawei maintained its lead in the global broadband aggregation equipment market in 2Q12; Alcatel-Lucent, buoyed by GPON wins at China Telecom and China Unicom, moved into the #2 spot, above ZTE.

Following three straight quarterly declines, DSL equipment revenue in EMEA (Europe, the Middle East and Africa) grew 11 per cent in 2Q12, but is still down year-over-year as operators continue the long-term move away from copper.

In its second quarter 2012 (2Q12) Service Provider Routers and Switches report the research firm finds that global service provider router and switch market, including carrier Ethernet switches and IP edge and core routers, grew four per cent in 2Q12 from the previous quarter, to $3.5 billion.

"A nearly 50 per cent increase in revenue in China propped up the global service provider router and switch market in the 2nd quarter," notes Michael Howard, Infonetics Research's co-founder and principal analyst for carrier networks. "China was the differentiating factor between a positive worldwide quarter and one that otherwise would have been down."

From the year-ago second quarter, the overall carrier router and switch market is down nine per cent, as service providers generally remain cautious, particularly in North America and Europe.

"While Cisco has long led the global IP edge and core router market by very comfortable margins (and whose share is steady from this time last year), Alcatel-Lucent, Juniper and Huawei have been fighting it out every quarter for the past year-and-a-half for the next three leadership positions. The race tightened considerably in the 1st half of 2012, with Huawei taking the #2 spot in the 2nd quarter," Howard adds.

Latin America is the only major world region posting an increase in carrier router and switch revenue on a year-over-year basis (up 57 per cent in 2Q12 over 2Q11).

ZTE posted especially strong gains in carrier Ethernet switches (CES) in 2Q12, particularly in China where CESs are being used in major mobile backhaul deployments.