Monday, December 26, 2011

Optical communications market forecast: Capex of top 12 service providers

DUBLIN, IRELAND: Research and Markets has announced the addition of the "Optical Communications Market Forecast Report and Database" report to its offering.

There was plenty of good news in 2011 for the communications industry. To start with, total revenues of top 12 service providers increased by 7.5 percent in 2011, after two years of stagnation in 2009 and 2010. Mobile broadband services and cloud computing are driving this growth. While carriers are seeing improvement in their top lines, they are still being cautious about capital expenditures (CapEx) given the market uncertainty.

The forecast report presents analysis of business and CapEx of the top 12 service providers, as well as trends in networking equipment market and business of leading equipment manufacturers. The report also offers a detailed forecast for optical components and modules, including historical data from 2008 to 2011 and a detailed market forecast through 2015 for optical components and modules used in Ethernet, Fibre Channel, SONET/SDH, CWDM/DWDM, wireless infrastructure, FTTx, and high performance computing (HPC) applications.

The sales data for 2008 to 2011 account for more than 30 transceiver vendors, including 25 vendors that shared confidential sales data with LightCounting. The market forecast for 2012-2015 is based on LightCounting's model correlating transceiver sales with network traffic growth and projected subscribers of FTTx systems. LightCounting's team of analysts is also grateful to many industry experts for critical review of the forecast projections.

Over the long term, for a mature market, CapEx should grow in line with revenue growth. In the short term, CapEx can rise and fall as individual technology programs are implemented and the policies of company managers change. As economic conditions improve, companies typically increase CapEx investments faster than revenue increases, to position themselves to capitalize on rising sales.

If not for the macroeconomic uncertainty in 2011, CapEx of top 12 carriers should have been up by more than 7.5 percent, but the actual numbers suggest only 5 percent increase in CapEx for the year. To be fair, the CapEx did increase by 3 percent in 2010, while sales were stagnating.

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