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The Russian DWDM equipment market, 2011-2020

October 2016

Analytical Report (full version)

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Analytical Report (full version)

The Russian DWDM equipment market, 2011-2020
The Russian DWDM equipment market, 2011-2020
October 2016

The Russian DWDM equipment market, 2011-2020

October 2016

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J'son & Partners Consulting presents brief results of a study of the main development trends and prospects of the market for DWDM equipment in Russia.

 

According to “Research and Markets” analysts, the global market for DWDM equipment has reached $ 9.2 billion, by 2020 it is expected to grow up to $ 11.4 billion. Russian manufacturers of telecommunication equipment are also part of this market, and today they are actively proposing their solutions.

 

With the increased consumption of mobile and fixed Internet access, cloud services and rising number of broadband devices end users, operators have an increasing need to expand the bandwidth of their transport networks. To solve this problem operators worldwide are introducing telecommunications equipment for Dense Wavelength Division Multiplexing (DWDM).

 

The Russian market

 

According to the Ministry of Telecom and Mass Communications of the Russian Federation, the volume of Russian Internet traffic is growing on average by 30-40% per year and according to forecasts of Cisco, it will increase by 2.7 times by 2020. Such growth rate of information consumption requires that operators make investments in modernization and construction of fiber-optic communication networks.

 

J'son & Partners Consulting conducted an evaluation of the capacity growth of Russia's main networks, including intra-zonal networks in terms of channels of 10 Gbps based on the statistics of the Russian Ministry of Communications for the length of the transmission lines with optical cable.

 

 

Russian operators continue to build and modernize their transport networks. Over the past 5 years, the total throughput of the Russian backbone networks has increased by more than 50 times – from 34 to 1916 thousand km of 10G channel. Moreover, the market participants tend to use more powerful DWDM equipment.

 

So, over the past 10 years, Rostelecom has twice extended the capacity of DWDM systems - from 10 Gbps to 40 Gbps in 2008 and to 100 Gbps in 2012. In 2011, Huawei together with Rostelecom has tested DWDM equipment for technologies of 100 Gbps in the operator's network, and in 2012, Rostelecom has already launched it into commercial operation. In the same year VimpelCom announced the introduction of transfer technology with speeds of 100 Gbps in its backbone network (Ufa - Samara section, length 587 km). In 2013 three more major backbone operators (TTC, MTS and MegaFon) announced the introduction of DWDM equipment for data transmission via optical 100G channels. Thus, since 2013 we can talk about the beginning of the 100G technology mass distribution in the networks of the major backbone operators in Russia.

 

According to J'son & Partners Consulting, despite the recent temporary decline of the Russian market for DWDM equipment due to the economic problems in the country, this year is expected to change the trend to positive and begin the market recovery, due to the objective needs among operators in increasing of traffic, as well as the huge length of the country, and the necessity of transit traffic over long distances. The growth of the market in 2016, according to J'son & Partners Consulting, will exceed 60%.

 

In 2016 consumers will be able to readjust to the new realities of the economy, and a fast recovery of the market will start. This confidence is primarily based on the actual needs of the main operators in upgrading their networks, and on the data of conducted large-scale tenders. In addition, the rapid development of cloud services requires transformation of the existing telecommunication networks towards their better connectivity with data centers (DC – Centric Networks). In this regard, the growing share of so-called private networks which are used, among others, by providers of digital cloud services. Until 2010, according to TeleGeography, their share of the bandwidth did not exceed 20%, but now in some areas such as “USA – Europe”, “USA – Asia”, the share of private networks has already reached 40 – 60% of the total bandwidth networks. It is obvious that this trend will sooner or later come to Russia. Thus, it can be stated that the future growth capacity of the transport networks will be defined not only by the volume of Internet traffic transit.

 

International experience of introduction of DWDM equipment of the last generation shows that it significantly reduces specific costs of organizing a communication channel in terms of 10 Gbps. Thus, according to TeleGeography, in 2015 during the operators’ transition to the 100G transmission technology, reduction of unit costs for one channel in terms of 10 Gbps ranged from 20% to 30%. In frames of particular segments on the American inner market, for example, in the segment “Chicago - New York”, this reduction reaches 50%.

 

The main drivers of the development of equipment quality on the Russian market for DWDM equipment are:

- The need for continuous upgrading of the Russian operator Internet backbone networks in conditions of 30 – 40% annual growth of traffic;

- The increasing use of DWDM technology in local networks;

- The formation of a data center-centric networks, designed for transferring cloud services, transformation of telecommunications networks towards software defined networks.

 

Detailed results of the research presented in the full version of the report

The Russian DWDM equipment market, 2011-2020”

Contents

1. Summary

2. Main trends of the telecommunication equipment market development in Russia. Drivers and barriers.

3. Estimates and forecasts of the Russian market for DWDM equipment development

in 2011 – 2020

3.1. The DWDM equipment market volume and dynamics in monetary terms

3.2. The DWDM equipment market by major consumer groups

3.3. The DWDM equipment market by technology

4. Assessment of the competitive situation on the market of DWDM equipment, 2011-2015

5. The main consumers of DWDM equipment in Russia and their major projects in 2013 – 1st half 2016

5.1. Main operators

5.2. Operators of regional networks (including departmental operators)

5.3. Data centers

5.4. Local broadband providers

6. Key vendors on the Russian market for DWDM equipment

6.1. International vendors

6.2. Russian companies

7. Conclusions and recommendations

The report includes 27 figures and 17 tables

 

The newsletter prepared by J'son & Partners Consulting. We work hard to provide factual and prognostic data that fully reflect the situation and which are available at the time of the release. J'son & Partners Consulting reserves the right to revise the data after publication of new official information from particular players.

 

 

J'son & Partners Consulting presents brief results of a study of the main development trends and prospects of the market for DWDM equipment in Russia.