Global Optical Communications Industry in Full Swing, China's Optical Communications Makes Significant Contributions

Unlike Baidu, whose search engine generates high profits, optical communications companies leverage their nearly free network advantages and profitable derivative industries to keep pace with rapidly growing traffic demand or provide more efficient and lower-cost network equipment or components.

Recently, LightCounting released a research report titled "Global Optical Communications Industry: On a Path to Sustainable Profitability." This report summarizes the entire industry supply chain in 2010. Unlike Baidu, whose search engine generates high profits, optical communications companies leverage their nearly free network advantages and profitable derivative industries to keep pace with rapidly growing traffic demand or provide more efficient and lower-cost network equipment or components. Therefore, optical communications requires a long-term investment and long-term return process, which is a sustainable development process, and thus has huge potential for profit growth.

"Compared to 2007, the average profit margins of content providers such as Amazon, eBay, and Google doubled in 2010," said Vladimir Kozlov, founder and CEO of LightCounting. "The profitability of optical component and equipment suppliers also improved during the same period, but with increased investment in network infrastructure, telecom service providers have not yet found a path to improve profitability."

Although asset consolidation remains an effective way to achieve profitability, more innovative solutions such as charging content providers for the video bandwidth consumers crave were also recommendations raised at the CEO roundtable organized by European telecom regulators.

The LightCounting report outlines major technology transitions affecting network evolution and the entire industry. These include the growing popularity of cloud computing and over-the-top (OTT) services, as well as the emergence of hyper-scale data centers and flat network architectures, driven by the demand for optical systems supporting higher data rates including 10G, 40G, and 100 Gbps.

The report also examines changes in several market segments, including SONET/SDH, Ethernet, Fibre Channel, WDM, and FTTx optical components and module industries. In addition, the report discusses the growing influence of Chinese optical component and equipment suppliers.

Source: OFweek Optical Communications