European fiber optic test market driven by FTTH deployments - Embedded.com

European fiber optic test market driven by FTTH deployments

With the expansion of the installed base and the need for higher bandwidth speed, the European fibre optic test equipment (FOTE) markets are gaining strong traction. New analysis from Frost & Sullivan finds that the European fiber optic test equipment market earned revenues of over $140.4 million in 2010 and estimates this to reach $165.4 million in 2015.

Fiber optics are poised to play a major role in most parts of Europe. New strategies unleashed to enhance passive optical network (PON) across Europe in the near future will bolster fibre to the home (FTTH) deployments.

Opportunities abound in the integrated test equipment market segment, and with operational expenditure being high on the agenda for end users, demand for combinational testers will witness an upsurge.

“The United Kingdom is showcasing its broadband initiative, and FTTH deployment in most of England is triggering growth in the FOTE market,” said Sujan Sami, Frost & Sullivan Research Analyst. “Besides FTTH, other segments stoking growth in this domain are 3G, cell backhaul, and dense wavelength division multiplexing (DWDM).”

FTTH and 40 gb/s are driving market growth in Germany. The Czech Republic, Slovakia, Hungary, and Scandinavia are showing promise. Russia may see significant growth with reinvestments in the fibre optic space.

Although the prospects for the market look upbeat, there are some aspects clouding its landscape according to Frost & Sullivan. Currently, vendors find it difficult to replace existing underground cables with fibre optic cables in certain parts of Europe, especially in Germany. Despite great demand for FTTH, vendors face a huge challenge in laying cables as right-of-way access is restricted with existing laws. This has hindered the growth of the market, and this trend is expected to continue in the foreseeable future.

Apart from this, the ripple effects of the global economic downturn were felt in the European FOTE market. France and Germany are yet to recover, and growth in these regions is expected to be lacklustre. Competition is intense among test vendors in this space, making price pressure significant in the region and hindering vendors’ growth. Increasing the price-to-performance ratio of their products is critical for vendors to prosper in this region.

In this scenario, vendors must contribute to lowering the cost of testing, as well as optimise customer workflow and end-user requirements, in order to establish their market presence. With new and emerging technologies such as reconfigurable optical add-drop multiplexer (ROADM), 40gb/s and 100 gb/s, standardisation is key for getting consensus among test vendors while developing new products.

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