“The demand for Optical Transport equipment is significantly lower, although customer inventory is still a factor causing the declining optical sales, we believe unfavorable macroeconomic conditions had a larger influence on the current market results,” said Jimmy Yu, Vice President at Dell’Oro Group.

“With quarterly results widely fluctuating at this point, it is more insightful to examine the trends on a rolling 4-quarter basis. On that basis, the MCN market growth rate was down 4 percent Y/Y, and the 5G MCN market was up 5 percent Y/Y, based on rolling 4-quarter averages,” stated Dave Bolan, Research Director at Dell’Oro Group.

“The market contraction that the router vendors are undergoing is in its fifth quarter,” said Jimmy Yu, Vice President at Dell’Oro Group. “We anticipate that as the market stabilizes and customer inventory levels return to normal, vendors will experience higher order flows, followed by increased revenues

“Tougher comparisons, excess capacity, monetization challenges, and capex fatigue negatively affect both capex levels and investment priorities, providing operators with an opportunity to calibrate their RAN budgets to better align with historical capital intensity and RAN/capex ratios,” said Stefan Pongratz, Vice President of RAN and Telecom Capex research at the Dell’Oro Group.