Red-hot switching and routing growth cools in Q1 of 2011

MELBOURNE, AUSTRALIA: The red-hot growth that the service provider switching and routing market has experienced over the last year cooled in the first quarter of 2011, according to Ovum.

In a new market analysis, the independent telecoms analyst states that although global spending grew by 9 percent compared to the first quarter of 2010, this was the least positive result in more than a year.

Nonetheless Ovum’s research shows that Alcatel-Lucent, Huawei, Juniper and ZTE all posted double-digit revenue gains compared with the first quarter of 2010. However, market leader Cisco and Tellabs both posted declines.

Market leader Cisco’s revenues of $1.25 billion for the first quarter of 2011 were down six per cent compared to the first quarter of 2010 and down 12 percent compared to the fourth quarter of 2010. This led to the company losing the most annualised market share.

Second-ranked Juniper enjoyed the biggest gain in sales versus the first quarter of 2010, increasing its revenues by a massive 28 percent. This meant it also had the largest share gain for the annualised period ending in the first quarter of 2011.

Dana Cooperson, Ovum network infrastructure practice leader and author of the market report, commented: “While the market still experienced healthy growth, it was more modest than we have seen in previous quarters and an indication that this red-hot growth is cooling.

“All the global regions grew compared with the first quarter of 2010. In Europe, the Middle East and Africa and in South and Central America the growth was particularly strong, more than the nine per cent global average. However, growth in North America and Asia-Pacific fell short of this average.

“In terms of vendor strategy, mobility, the cloud, and the mobile cloud continue to be a focus of attention for vendors and are causing them to hone their value propositions. Meanwhile network operators are taking a more holistic approach when it comes to their needs.”