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HR: ROADM Market Primed to Boom

Revenues are on track to exceed $250 million in 2006 as big network operators install ROADMs to deliver IPTV service, Heavy Reading projects

NEW YORK -- Worldwide sales of reconfigurable optical add/drop multiplexing (ROADM) gear will break the $250 million mark for the first time in 2006 and will grow to $920 million in 2011, for an average annual growth rate of almost 30 percent, according to a major new report from Heavy Reading (www.heavyreading.com), the market research division of Light Reading Inc. (www.lightreading.com).

ROADM & WDM Worldwide Market Forecast, 2006-2011 assesses the current state of the ROADM market and forecasts its performance through 2011. The report includes extensive five-year revenue and market share forecasts for the ROADM and WDM sectors, as well as market share data for WDM and ROADM system vendors current through the second quarter of 2006.

"IPTV and triple-play services are the biggest drivers for ROADM deployment," notes Scott Clavenna, Chief Analyst with Heavy Reading and author of the report. "ROADMs are the primary link between IPTV and optical, so where IPTV is rolled out, ROADMs will follow. ROADMs are an excellent way for optical transport vendors to ride the massive tide of consumers and content lifting other telecom segments.

Clavenna cautions that the long-term success of the ROADM sector depends on telco commitments to offer video services over their networks. "If telco IPTV buildouts get scrapped or postponed, the ROADM market will suffer," he adds.

The ROADM and WDM markets involve most of the world's largest telecom equipment makers, including Alcatel, Cisco Systems, Ericsson, Fujitsu, Huawei Technologies, Lucent Technologies, Nortel Networks, and Siemens. In total, the report profiles and analyzes 17 different providers of ROADM and WDM gear and assesses the competitive positioning of six leading suppliers of ROADM subsystems, including JDS Uniphase.

Other key findings of ROADM & WDM Worldwide Market Forecast, 2006-2011 include:

North America currently generates the lion's share of ROADM revenues, but the market opportunity is global. North American service providers are leading the ROADM charge, led first by cable MSOs building video-on-demand (VOD) infrastructure, and now by large telcos building IPTV and video networks to challenge cable's hold on consumer entertainment. However, activity has been picking up in Europe and Asia throughout 2006.

The overall metro WDM market has hit its stride with good, but slowing, growth prospects. Worldwide metro WDM revenue reached $1.3 billion in 2005, seven years into its existence as an equipment segment. Heavy Reading forecasts that metro WDM revenue will increase at a 12 percent compound annual growth rate (CAGR) from 2006 to 2011, to reach $2.8 billion. At that point, ROADMs will account for roughly a third of the overall metro WDM market.

ROADM subsystem revenue will keep pace with the market for ROADM systems. Heavy Reading projects double-digit annual revenue increases over the next five years for the ROADM subsystem market, which will quadruple in size as ROADM networks proliferate.

ROADM & WDM Worldwide Market Forecast, 2006-2011 costs $3,795 and is published in PDF format. The price includes an enterprise license covering all of the employees at the purchaser's company.

For additional information, or to request a free executive summary of this report, please contact:

Dave Williams
Sales Director
Heavy Reading
858-485-8870
[email protected]

Press/analyst contact: Dennis Mendyk
Managing Director
Heavy Reading
201-587-2154
[email protected]

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About Heavy Reading
Heavy Reading is an independent market research organization offering quantitative analysis of telecom technology to service providers, vendors, and investors. Its mandate is to provide the comprehensive competitive analysis needed today for the deployment of profitable networks based on next-generation hardware and software.

About Light Reading Inc.
Founded in 2000, Light Reading Inc. (www.lightreading.com) is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. It reaches an extensive audience of executives and technologists within the telecom and enterprise networking communities, as well as the financial/industry analysts and investors who track these sectors. Light Reading was acquired by United Business Media in August 2005, and operates as a unit of CMP Technology.

About CMP Technology
CMP Technology (www.cmp.com) is a marketing solutions company serving the technology industry. Through its market-leading portfolio of trusted information brands, CMP has earned the confidence of more technology professionals than any other media company. As a result, CMP is the premier provider of access, insight and actionable programs designed to connect sellers and buyers in ways that yield superior return on investment. CMP Technology is a subsidiary of United Business Media (www.unitedbusinessmedia.com), a global provider of news distribution and specialist information services with a market capitalization of more than $3 billion.

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