Worldwide optical network hardware revenues dropped 12 per cent to $2.6bn between the fourth quarter of 2005 and the first quarter of 2006 as a direct result of the 43 per cent revenue hit sustained by market leader Alcatel.
The latest quarterly Optical Network Hardware report from Infonetics Research said that Alcatel's optical revenue was down in the first quarter, as it usually is, but that its overall growth continues.
Revenue was up 10 per cent in the first quarter of 2006 compared to the fourth quarter of 2005, while worldwide optical hardware rose only eight per cent in the same period.
Infonetics forecasts that annual optical network hardware revenue will increase 14 per cent to $12.3bn between 2005 and 2009, with the strongest growth coming from metro Wave Division Multiplexing (WDM) equipment.
"The optical market is more cyclical than most, and Alcatel's optical sales are more cyclical than any other company; a big fourth quarter followed by a low first quarter is the usual pattern here," said Michael Howard, a principal analyst at Infonetics.
The analyst firm has upgraded its long-haul WDM forecast because growth picked up by some 27 per cent between the fourth quarter of 2005 and the first quarter of 2006.
"A lot of carriers have not invested much in long-haul since before the telecom bubble burst. Now that their equipment is old, and the new equipment is vastly improved, the business case to invest again is compelling," said Howard.
Infonetics predicts that this upgrade drive will fuel strong growth in long-haul WDM through to 2009, when it will reach $2.1bn.
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