News

FOR IMMEDIATE RELEASE

The global optical communication industry is on a path to sustainable profitability.

 

EUGENE, Ore. ��� July 18, 2011 ��� LightCounting has released a report titled “State of the Optical Communications Industry: On a Path to Sustainable Profitability.” This report examines profitability across the industry supply chain, which improved substantially in 2010. However, a wide gap remains between companies like Google, which generate high profits by taking advantage of the network at almost no charge, and those composing the rest of the industry, which are struggling to stay profitable while upgrading networking infrastructure to keep up with rapidly increasing traffic or delivering more efficient and lower cost networking gear or components for it.

“Average profitability of content providers such as�� Amazon, eBay, and�� Google doubled in 2010 compared to 2007,” commented Vladimir Kozlov, founder and CEO of LightCounting. “Profitability of optical component and equipment suppliers has also improved during the same period, but telecom service providers are yet to find a path to improve profitability, while increasing investments into networking infrastructure.”

While consolidation remains a proven approach to profitability, more innovative solutions such as charging content providers for delivering their band-width hungry videos to consumers as suggested at CEO roundtable organized by European telecom regulators last week, may become necessary.

Cisco’s restructuring announced recently confirms a shift in datacom equipment market, where Juniper and HP are gaining market share for high- and low-end products, respectively. Curbing the dominant position of Cisco should have a longer term positive effect on profitability of the whole supply chain.

LightCounting’s report outlines the major technological transitions impacting evolution of the networks and the whole industry. These include the increasing popularity of cloud computing and over the top (OTT) services and the emergence of super datacenters and flat networking architecture, which drive demand for higher data rate optics, including 10G, 40G and 100 Gbps.

The report also examines the changing landscape of the optical component and module industry in several market segments including SONET/SDH, Ethernet, Fibre Channel, WDM, and FTTx. In addition, it discusses the increasing influence of Chinese optical component and equipment suppliers.

Leading vendors shared confidential sales data with LightCounting that enable an analysis of the industry’s dynamics. Data on revenues of the Chinese optical communication market used in the report were provided by Infostone Communications Consultant Co., a research partner of LightCounting based in China.

More information on the report is available at http://www.lightcounting.com/2011%20SOTIR.cfm.

About LightCounting
LightCounting is a market research company focused on in-depth study of the optical communications market. Our research covers the whole supply chain including components, modules, systems, and their applications. Most of our analysis is based on confidential sales data provided exclusively to LightCounting by leading component and module suppliers.

For more information: www.LightCounting.com or 408.962.4851.