Communications service providers are upgrading their networks to faster technologies as they prepare for greater demand for network capacity. This was one of the chief findings of a recently published report by independent analyst firm Dell’Oro Group.

Growth was especially strong for the third quarter of the year in the service provider router and aggregation switch market, bettering a strong prior quarter in North America and the Caribbean and Latin America (CALA) regions particularly. Worldwide, growth in those sectors is running at 5% for the year.

“North America’s continued upward trend in 3Q 2022 was driven by service providers upgrading networks to gain the advantages of 400 Gbps technologies and expanding their networks to accommodate growing traffic,” said Ivaylo Peev, Senior Analyst at Dell’Oro Group. “Demand for network capacity continues to increase, driven by 5G, IoT, pervasive video, and other technology trends. From a worldwide perspective, solid revenue growth in the combined SP Edge router and aggregation switch segment was partially offset by flat performance in the core router segment. The fast-growing adoption of edge router and line cards based on the newest ASICs, which support 400 Gbps connections and offer the highest available bandwidth, was the key reason for the edge router segment growth in 3Q 2022.”

Additional highlights from Dell’Oro Group’s 3Q 2022 Service Provider Router and Switch Report:

• High revenue growth in North America and CALA was diminished by declines in Europe, Middle East and Africa, and Asia Pacific.
• Supply chain constraints eased somewhat in the quarter, improving access to components and enabling router vendors to work through some of their order backlogs.
• Among the top five router suppliers, Cisco and Juniper recorded solid revenue growth, while Huawei and ZTE declined. Nokia had a strong quarter based on revenue reported.