New technologies set to boost service provider router revenue

New technologies, like 5G and cloud networking, are set to drive the service provider router market past $15bn in value by 2024, according to new research.


The findings were made by Dell’Oro Group and published in its Service Provider Router and Carrier Ethernet Switch five-year market forecast.


“We made some significant adjustments to our January report to incorporate the impact of the COVID-19 pandemic,” commented Shin Umeda, report author and VP with the firm. “On the other hand, our view of emerging technology trends remains largely unchanged, and that demand will remain healthy over the coming years. Our forecast isn’t as rosy as our January outlook, but we still expect The SP Router and CES market to grow annually from 2021 and to top $15 billion by 2024.”


Umeda said he believes that in the short term, market growth will be suppressed due to supply and human resource constraints, as well as weakened macroeconomic conditions. Over the longer term, from 2021 through 2024, he expects the technology and use case drivers of prior forecasts to remain largely intact and drive annual growth.


“The good news is that the importance of technologies such as 400 Gbps, 5G, and cloud networking remains unchanged or perhaps will increase in the face of tighter capital spending and infrastructure investments,” concluded Umeda. “Prioritized spending will lead to a faster decline for less critical infrastructure and legacy technologies.”


On the 400 Gbps technology front, the emergence of new products will be a big growth driver over the next five years, he added. Network operators see 400G as a logical step to increasing network capacity at lower costs for hardware and operations.


A separate report from Dell’Oro has revealed that the market for microwave transmission equipment has declined 14% year-over-year in first half 2020 to $1.3 billion.


“Most of the decline in the microwave transmission market was due to lockdowns instituted by governments to stop the spread of COVID-19,” stated Jimmy Yu, Vice President at Dell’Oro Group. “As a result of these national lockdowns, microwave manufacturers often faced difficulties in obtaining components, shipping products to customers, installing equipment, and obtaining permits and licenses. We believe with fewer lockdowns in second half of 2020, the demand for microwave gear will improve.”

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