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SPSR market to approach $15.4B by yearend

Posted: 17 Jul 2012 ?? ?Print Version ?Bookmark and Share

Keywords:SPSR? Ovum? switching and routing market? IP/MPLS core? Alcatel-Lucent?

According to Ovum, the global service provider switching and routing (SPSR) market is expected to improve on recent performance and grow 4.4 percent this year to $15.4 billion. There was no recorded growth in 1Q12, noted the market research firm.

The global SPSR revenue was down 16.4 percent successively and down 0.2 percent versus 1Q11the first time SPSR quarterly revenue has declined from the year-earlier period since 4Q09, added Ovum.

"In 1Q12, annualized revenue growth paused. Declines in the IP/MPLS core and access switch and router segments were nearly balanced out by gains in the IP/MPLS edge and IP/Ethernet product segments," stated David Krozier, principal analyst, network infrastructure, Ovum. "The strongest performance in 1Q12 was in the smallest geographic segment, South & Central America (SCA), with sales up 25 percent from the year-ago quarter. North America (NA) produced 13 percent growth, while the Asia-Pacific market declined by 0.7 percent and the EMEA markets fell sharply by 18.5 percent."

Regional differences were significant and had a major impact on vendor performance. Vendors with significant exposure in South, Central and North America benefited in 1Q12 as those markets both grew by double digits.

"Alcatel-Lucent turned in a particularly strong performance in South and Central America in the quarter, while Cisco produced record revenues in North America, and both vendors managed double-digit revenue growth in the Asia-Pacific region to outpace global growth," Krozier added. "SPSR carrier spending in NA and SCA will remain healthy, and the Asia-Pacific market will pick up as 2012 progresses. While the Southern European economies are a concern, Eastern Europe and MEA provide reasons for optimism in carrier spending in the EMEA region."

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