Increase in capital expenditure and the emergence of high-speed networks in the telecommunications industry opens up new growth opportunities in the synchronous optical network/synchronous digital hierarchy (SONET/SDH) test equipment markets. However, vendors now face the challenge of providing end users with sophisticated equipment with enhanced features and scalability at a minimal price.
Frost & Sullivan finds that the World SONET/SDH Next-generation SONET & OTN Test Equipment Markets earned revenues of $199.6 million in 2005 and estimates to reach $247.8 million in 2012.
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With the increase in demand for bandwidth, there is a need to expand the capacity of optical networks, which in turn, drives the adoption of next-generation SONET/SDH technologies.
“Forty gigabit Ethernet and high-accuracy jitter testing offer growth prospects to vendors in this market today,” says Frost & Sullivan Senior Research Analyst Sujan Sami. “In addition, the need to test higher SONET/SDH networks such as OC-192 and OC-768 leads to the need for newer, upgraded test equipment.”
In the long run, with service providers (SPs) increasing the size of their networks worldwide – mostly outside North America – the future of the SONET/SDH test equipment markets relies largely on such next-generation test solutions.
Test vendors need to direct their solutions toward SPs and network equipment manufacturers (NEMs), which are currently the two largest end-user segments in the markets. In 2005, SPs contributed to 62.8 percent and NEMs, 30.8 percent of total market revenues.
Product differentiation is likely to be a critical competitive factor for vendors looking to promote their next-generation test products. Vendors that offer integrated solutions – that are not only compact, easy-to-handle units, but also demonstrate a high price/performance ratio – stand to gain the most.
“Such integrated test solutions must allow end users to perform multiple tests on various network technologies within a single platform without having to sacrifice the features and functionalities of the solutions,” notes Sujan.
In order to obtain a significant share of the markets, test equipment vendors not only need to closely track customer needs, but should also monitor evolving standards and advancements in SONET/SDH networks.
World SONET/SDH Next-generation SONET & OTN Test Equipment Markets, a part of the Communications Services Subscription, offers a comprehensive analysis of the traditional SONET/SDH, next-generation SONET/SDH and OTN SONET/SDH test equipment markets. It includes end-user, application and geographic analyses coupled with detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Analyst interviews are available to the press.
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