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Study: Broadband Access Will Drive SONET/SDH Investments
Apr 2003
BOONTON, N.J., April 9 -- The acceleration of broadband deployment by Verizon and other phone companies will increase demand for SONET/SDH systems, says a new market research study by The Insight Research Corp.

Insight Research's telecommunications industry analysis report, Optical Networks: DWDM and SONET 2003-2008, indicates that a gradual return to network infrastructure investment by carriers could begin as early as the fourth quarter of 2003. Even as carriers ratcheted back their capital spending in 2001, end-user demand for bandwidth continued to grow, Insight Research said. Carriers met that bandwidth demand by using up existing spare capacity in their networks. Now that recent regulatory rulings have given local carriers the incentive to begin re-investing, the company said it expects real growth to return to the optical equipment market. It forecasts compounded growth from 2003 to 2008 of more than 50 percent in the SONET/SDH terminal market, and an 18 percent compounded annual growth rate in the fiber optic cable market.

"Providers have squeezed excess capacity out of existing facilities for the last couple of years to meet bandwidth demand by their end customers," said Robert Rosenberg, Insight Research president. "The recent UNE-P broadband ruling gives the local carriers an incentive to begin re-investing, and local access trends are the drive wheels powering the entire telecommunications industry. We expect SONET/SDH upgrades in metropolitan areas to become a major carrier priority."

The study concludes that carriers will continue relying on SONET/SDH in the near-term, despite the ability of dense wavelength-division multiplexing (DWDM) technology to increase optical network capacity.

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