Growth in the global service provider switching and routing (SPSR) market, which came to a halt in Q1 2012, is expected to improve on recent performance and grow 4.4% in 2012 to US$15.4bn (£9.91bn), according to Ovum.
In a new report, Market Share Alert: 1Q12 SP Switching & Routing, the independent telecoms analyst firm states that global SPSR revenue was down 16.4% successively and down 0.2% versus Q1 2011 – the first time SPSR quarterly revenue has declined from the year-earlier period since Q4 2009.
David Krozier, principal analyst, network infrastructure at Ovum, explained: ‘In Q1 2012, 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 (multi-protocol label switching) edge and IP/Ethernet product segments.
‘The strongest performance in Q1 2012 was in the smallest geographic segment, South and Central America (SCA), with sales up 25% from the year-ago quarter. North America (NA) produced 13% growth, while the Asia-Pacific market declined by 0.7% and the EMEA markets fell sharply, by 18.5%,’ noted Krozier.
Regional differences were significant and had a major impact on vendor performance. Indeed, vendors with significant exposure in South and Central America and North America benefited in Q1 2012 as those markets both grew by double digits.
Krozier added: ‘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.
‘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,’ concluded Krozier.