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Chinese companies lead the way in global growth

Global spending on optical networking (ON) is growing steadily, according to analyst firm Ovum.

The company says that results of $4.08 billion for the second quarter of 2013 were 29 percent higher than they were in the first quarter of the year, and seven percent higher than the second quarter of 2012. Annualised spending grew to $14.9 billion.  

Chinese companies led the way. ZTE had its strongest quarter ever, solidifying its position behind Huawei as the second-ranked ON vendor. Annualised spending in Asia-Pacific, at over US$6bn, reached record levels.

Demand in North America was also up significantly, benefitting Alcatel-Lucent, Cisco, Ciena, and Fujitsu. Growth in 100G remains a particular bright spot, with annualised revenues exceeding US$1.6 billion for the first time.

Strong sales in Asia-Pacific and North America mitigated weakness in Europe, the Middle East and Africa, as well as South and Central America, propelling the industry to its best quarter since the fourth quarter of 2011. Ovum believes the market downturn that began in the first quarter of 2012 may finally be past in all regions except Europe – which, it says, is still showing signs of sluggishness.

'We always expect an uptick going into the second calendar quarter. However, sales of over US$4bn help dispel some of the fear generated by the slow start in 1Q13,' said Ron Kline, network infrastructure analyst at Ovum.

'100G revenue growth is pumping a lot of enthusiasm – and revenue – into the market and increasing the revenues for converged packet optical (CPO) and optical transport network (OTN) switching gear.'

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