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FOTE markets to grow with 3G/4G, FTTH deployments

Posted: 28 Mar 2011 ?? ?Print Version ?Bookmark and Share

Keywords:fiber optic? test equipment? FOTE? market report?

Frost & Sullivan has released a market report on the world fiber optic test equipment (FOTE) markets, reporting that the market earned revenues of over $544.6 million in 2010. The analyst says the market is expected to grow due to increasing 3G/4G, cell back haul and FTTH deployments, to reach $695.2 million in 2015.

The market watcher also notes that several governments are implementing broadband initiatives in their countries, thus increasing bandwidth demand and the number of networks, and driving the need to upgrade to 40Bb Ethernet capacity.

"The R&D sector is growing with increased demand for triple-play technology voice, video, data and increasing bandwidth requirements," says Sujan Sami, industry manager, Frost & Sullivan. "This is expected to spike demand for new test equipment."

At the same time, demand in manufacturing as well as installation and maintenance sectors will increase as well. Agilent Technologies exited the I&M application segment and is significantly focused on R&D, says the analyst.

Asia Pacific will see the most growth with increases in FTTH deployment, particularly in China and India, and a growing demand for cell back haul and 40Gbps networks. China offers immense opportunities for the FOTE market, with regulations and standards to build infrastructure boosting the growth of broadband access, and in turn, the FOTE market, according to Frost & Sullivan.

However, there remain challenges to the market's growth, according to the market watcher. The global economic downturn reduced the FOTE market and is expected to have a slight impact on the growth of the market. The FOTE market is quite mature and as such, competitive where price sensitivity is very high. Other factors contributing to the pricing of fiber optic test equipment include the complexity of measurement, distance to be covered and regional competition.

Low-cost manufacturers in China pose an immense threat to global companies. Price pressure is significant in this region as foreign vendors compete with incumbent market participants. There is a pressing need for additional government stimulus packages to help the market pick up momentum, according to Frost & Sullivan.

They note that Europe has not shown a keen interest in the FOTE space with the level of already existing stimulus packages. Countries in Europe still deal with regulatory problems for FOTE rollouts. In addition, global vendors face operating issues from western countries and face challenges with distance and language.

Distribution plays a major role in conquering the customer base for a vendor in the fiber optic test equipment market, according to the analyst. Indirect sales through distributors are critical for reaching out to smaller companies/customers and covering key regions. However, direct sales with a local representative are vital to cater to the needs of the large customer base. This will help build long-term relationships, discuss new projects and provide them with the right type of test equipment at the right time.

"A prominent trend in today's market is integration of test equipment; this adds value for the customer," says Sami. "With operational expenditure being an important criterion for end users, the combinational testers market is expected to witness a growth upsurge."

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