Optical networking revenues slide around the globe

Optical networking revenues are down across the globe, according to Ovum, with Q1 2012 figures indicating a 9% drop from the same period in 2011.

This is the first time in almost two years that these quarterly figures have fallen year-on-year, Ovum said. Huawei and Alcatel-Lucent posted their worst global quarterly revenues since 3Q07 and 2005, respectively.

The figures come from a new Ovum report, ‘Market Share Alert: 1Q12 Global ON’, which also found that annualised spending retreated by $300m, or 2% sequentially, wiping out a third of the gains of 2011.

Sales were also lower than Q1 2011, across all regions, ranging from an 8% loss in North America, to a 15% drop in EMEA. Despite these drops, Ovum is forecasting a modest growth this year of 4%, to $16.2 billion.

“Preliminary results for 1Q12 indicate more a cause for concern than a cause for panic,” said Dana Cooperson, Practice Leader of Ovum’s Network Infrastructure practice.

“While 1Q sales are typically lower than 4Q sales, actual spending last year overshot our $14.9bn forecast when results in Asia-Pacific and Europe were less negative than we predicted.”

This poor showing in Q1 2012 may be because the weakness that was expected to occur in late 2011 is happening now, Ovum said, particularly given “continued macroeconomic and political challenges in Europe”.

“Also, 4Q/1Q market seasonality is becoming more pronounced as spending and spending growth shifts to Asia-Pacific and South & Central America (SCA), in which case sales should rebound more than is typical in 2Q12,” Cooperson said.