Incumbent operator spending grew much faster than cloud and colocation operators during 2020

BOSTON (January 27, 2021) – Expenditures by North American cloud and colocation operators on optical and packet transport equipment declined 20 percent year over year in the third quarter of 2020 (3Q20), while incumbent operator spending increased 2 percent, according to the 3Q20 Transport Customer Markets Report from market research firm Cignal AI.

“Equipment suppliers to cloud operators report that sales in the third quarter were depressed because service providers absorbed capacity on networks that were built during the first half of 2020,” said Scott Wilkinson, lead analyst at Cignal AI. “Both incumbent and cloud operators, especially in North America, spent significantly more of their annual budget than typical in the first half of the year.”

More Key Findings from the 3Q20 Transport Customer Markets Report

  • After uncharacteristically strong growth in 2Q20, sales to cloud and colocation operators in Asia Pacific (APAC) rose dramatically again in the third quarter
  • Despite a year-over-year decline in sales, Ciena maintained its worldwide market share leadership in sales to cloud and colocation operators in 3Q20
  • The fourth quarter is expected to be challenging for sales outside APAC, with traditional telco and cloud and colocation purchases anticipated to wane worldwide

About the Transport Customer Markets Report

The Cignal AI Transport Customer Markets Report tracks global optical and packet transport equipment spending by end-customer market type, including incumbent, wholesale, cloud and colocation, cable MSO and broadband, enterprise and government network operators. The report includes historical market share and market size and five-year market size forecasts. Vendors examined: Adtran, ADVA, Alaxala, Ciena, Cisco, Ekinops, Ericsson, Fiberhome, Fujitsu, Fujitsu NC, Huawei, Infinera, Juniper Networks, Mitsubishi Electric, NEC, Nokia, Padtec, RAD, Tejas Networks, Ribbon Communications, Telco Systems, Xtera and ZTE.

About Cignal AI

Cignal AI provides active and insightful market research for the networking component and equipment market and its end customers. Our work blends expertise from various disciplines to create a uniquely informed perspective on the evolution of networking communications.

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