The global optical networking (ON) market topped $3bn for the seventh consecutive quarter, growing 23 per cent year on year.

However the market declined sequentially by 12 per cent on the previous quarter, Ovum claimed.

Ovum's latest figures also reveal spending in North America topped all other regions and next-generation synchronous optical networking (SONET)/synchronous digital hierarchy (SDH) maintained its position as the single largest segment, with metro wavelength division multiplexing (WDM) as the second largest segment.

The top vendor in the space was Alcatel-Lucent with 20 per cent market share according to Ovum. The closest vendor to that was Huawei with 14.3 per cent market share. Third was Fujitsu with 8.1 per cent market share. Other vendors in the top ten included Nokia, Nortel, Ericsson, NEC, Cisco and Ciena.

Dana Cooperson, vice president of optical networking at Ovum, said: "“The sequential decline, particularly after a super-hot 4Q07, was expected, while the strong growth over 1Q07 points to continued strength in spending for ON gear used for consolidating disparate services onto a single network and supporting growth in broadband consumer and enterprise services.

“The trends we have been following for at least the past year — the increasing fraction of ON spending dedicated to metro WDM, the shift in end-to-end solutions marketing (if not purchasing), growing investment in undersea capacity, the growing addressable market for ON gear as emerging markets and alternative network builders take out their wallets, network evolution built on more packet-capable, agile, and resilient networks — remain powerful forces for market growth and spending shifts," she added.

"Of the top ten vendors, Ciena, Fujitsu, NEC, and Tellabs all posted positive sequential and year-over-year results; Alcatel-Lucent and Huawei both followed strong 4Q07 results with expected sequential declines; and only Nortel posted both sequential and year-over-year declines.”