Spending on optical transport hardware by North American network operators grew more than 20% in 2Q22 compared with the year before. Equipment capex by traditional network operators as well as large cloud operators has now surpassed pre-Covid levels, according to the most recent Transport Hardware Report from research firm Cignal AI. Spending by European and Asian operators remains low by comparison.
“Funding for broadband infrastructure, continuing 5G rollouts, and pent-up demand because of supply chain disruptions have catalyzed growth in North American transport spending,” said Kyle Hollasch, Lead Analyst for Transport Hardware at Cignal AI. “Massive order backlogs and an anticipated easing of supply issues point to a period of rapid spending growth for Service Providers and Cloud operators in the region.”
Highlights from the 2Q22 Transport Hardware Report:
Second quarter 2022 worldwide optical hardware spending grew 3%. Revenue grew in North America and China while all other regions declined.
Worldwide Cloud and Colo spending grew over 10%, compared to roughly flat spending by traditional service providers. Enterprise and Government sales declined YoY for the fifth consecutive quarter as the heightened spending levels during the pandemic reverted to normal.
Cisco, Infinera, and ADVA benefited the most from an increase in spending by Cloud Operators in North America
Results varied widely by region; North American optical revenue grew to the highest second-quarter level on record, while European spending declined. EMEA’s decline is due to a shift from transport to RAN spending, combined with a disadvantageous dollar exchange rate.
Worldwide packet transport sales grew 6%, driven by Cloud and Colo packet spending, which grew 16%.
North American packet transport sales climbed in tandem with optical and grew over 30%, with Cisco, Nokia, and Juniper all participating. EMEA packet sales fell.
North American WDM Transport Spending Surpasses Pre-Covid Levels
