Technical Insight
North American optical market in decline (Market News)
New market figures from RHK show that the North American optical transport market will decline 36% from 2000 levels. The research says that optical transport equipment sales, including DWDM, SONET and cross-connects, is expected to end the year at $12.5 billion, down from $19.6 billion last year. Equipment spending will remain flat well into 2002 as inventory is consumed and service providers lease capacity from wholesale carriers. "Since our last forecast, we completed another round of interviews with carriers, who account for 95% of carrier spending," said John Ryan, RHK s principal and chief analyst. "We found that carriers dramatically shifted their purchasing and operational behavior to match the unprecedented changes in competition and economics experienced in this market." The updated RHK forecast points to significant shifts in carrier spending philosophy, from purchases of new equipment to leasing capacity from other carriers, and a redeployment of in-service equipment to new routes to match traffic demand. Not all the news is bad; RHK maintains that particular market sectors, including metro transport, ultra-long-haul systems and optical core switches, will experience substantial growth for several years. More information can be obtained from RHK s North America Long Haul and Metro Transport services see www.rhk.com.
