| According to a recent survey conducted by KMI Research, USA, telecom carriers plan on increasing their optical-networking equipment spending in 2004 and beyond. �Across all regions and among all types of carriers surveyed, expectations are that there will need to be a spending increase in the next couple of years as capacity on the presently deployed equipment becomes increasingly filled up�, commented Mr Michael Arden, KMI analyst. For example, 35% of respondents indicated that their 2003 purchases of DWDM equipment would increase over their 2002 purchases. For 2004, 59% of respondents indicated an increase in year-over-year DWDM spending. This is the second year that KMI has conducted a web-based survey of telecom operators to get a quick mid-year �progress report� on carriers� spending and plans for optical networking equipment. In the July 2003 survey, KMI received responses from 141 carriers world-wide, with 44% in North America, 5% in Latin America, 18% in Europe, 31% in Asia-Pacific, and 2% in Middle East/North Africa.
To collect information on a major factor in the demand for optical networking equipment, the KMI survey directed questions to the carriers about the growth of bandwidth on their networks. The responses show that bandwidth continues to grow at strong rates, but the rate of growth is declining (see graph). It should be noted that these growth rates are in reference to total bandwidth, which would include voice, Internet-related traffic, and other data communications. The average responses varied among the major regions, with North American and European carriers reporting the lowest growth rates in recent years and the most conservative expectations. The most aggressive outlook was from the emerging markets of Latin America and Middle East/North Africa.
The survey data also showed a shift in the type of optical networking products to be procured in the near future. As carriers look to evolve their networks to more intelligent systems, equipment manufacturers will see an increase in spending on optical add-drop multiplexers (OADMs), optical cross-connects (OXCs), next-generation SONET-SDH transmission equipment, and similar advanced technologies. Also, the presence of Ethernet will increase in networks, both long-haul and metro, over the next several years.
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