The global service provider switching & routing (SPSR) market in the Asia-Pacific is set take top spot from North America on the back of stronger growth this year, Ovum predicts.
According to the market analyst firm in its report Monday, the Asia-Pacific market will have a compound annual growth rate of 9.7 percent this year, compared with 4 percent growth in North America.
Ovum pointed out part of this growth will come from rising IP traffic, which will drive strong demand for switches and routers in service provider networks. It expects the growth to accelerate further as fixed and mobile broadband subscriber penetration rates increase and consumer video applications drive network traffic.
In a report by ZDNet Asia last month, Cisco systems predicted that mobile data traffic in the Asia-Pacific would hit 1.1 billion DVDs monthly in 2016, or 4.32 exabytes. The company said Asia Pacific will see an 84 percent compound annual growth rate (CAGR) of mobile data in that period--making the region the second fastest growing market for mobile data, after the Middle East and Africa which will experience a CAGR of 104 percent.
"Carriers will need to invest in growing their IP infrastructure or risk losing subscribers. In developing nations, carriers are building out their 3G wireless networks, while developed nations are investing in LTE to accommodate mobile bandwidth demand," explained David Krozier, principal analyst of network infrastructure at Ovum.
The SPSR market is set to hit revenues of US$20.5 billion in 2017 from US$13.3 billion in 2010, with a CAGR of 6.4 percent over the period, predicted Ovum.
"The Asia-Pacific and South & Central America regions will grow faster than the global CAGR of 6.4 percent. The Asia-Pacific region will have a CAGR of 8.1 percent, growing from US$4.2 billion in 2010 to US$7.3 billion in 2017," said Krozier.
"In terms of revenues in Asia-Pacific, the edge router segment is leading the way, reaching US$4.2 billion in 2017, while the core router segment will hit US$1.6 billion and the IP/Ethernet router segment will only break the US$1.4 billion level. This is not surprising, as the edge router plays a key role in carrier networks as the control point for delivering subscriber services," he added.