Global SPSR Market To Reach US$15.4bn By End Of 2012

Growth in the global service provider switching and routing (SPSR) market, which came to a halt in 1Q12, is expected improve on recent performance and grow 4.4 percent in 2012 to to US$15.4bn, according to Ovum.

In a new report the independent telecoms analyst firm states that global SPSR revenue was down 16.4 percent successively and down 0.2 percent versus 1Q11 – the first time SPSR quarterly revenue has declined from the year-earlier period since 4Q09.

David Krozier, Principal Analyst, Network Infrastructure, Ovum said, “In 1Q12, annualised revenue growth paused. Declines in the IP/MPLS core and access switch and router segments were nearly balanced out by gains in the IP/MPLS edge and IP/Ethernet product segments.

“The strongest performance in 1Q12 was in the smallest geographic segment, South & Central America (SCA), with sales up 25 percent from the year-ago quarter. North America (NA) produced 13 percent growth, while the Asia-Pacific market declined by 0.7 percent and the EMEA markets fell sharply, by 18.5 percent,” added Krozier.

Regional differences were significant and had a major impact on vendor performance. Indeed, vendors with significant exposure in South & Central America and North America benefited in 1Q12 as those markets both grew by double digits.

Krozier said, “Alcatel-Lucent turned in a particularly strong performance in South & Central America in the quarter, while Cisco produced record revenues in North America, and both vendors managed double-digit revenue growth in the Asia-Pacific region to outpace global growth.

“SPSR carrier spending in NA and SCA will remain healthy, and the Asia-Pacific market will pick up as 2012 progresses. While the Southern European economies are a concern, Eastern Europe and MEA provide reasons for optimism in carrier spending in the EMEA region,“ said Krozier.