The market for optical add-drop multiplexers (OADM) will grow from $338 million in 2000 to more than $4 billion in 2006, representing a 53% compound average annual growth rate, according to a new report by Allied Business intelligence (ABI), Oyster Bay, NY.

This growth will be driven by both growth in dense wavelength division multiplexing (DWDM) systems and the increasing use of more expensive reconfigurable OADMs.

ABI's new report, “Optical Add-Drop Multiplexers: World markets and Opportunities for Fixed and Reconfigurable OADMs in the Long-Haul and Metro Networks,” provides an overview of the markets for fixed and remotely configurable OADMs. It forecasts shipments to submarine, long-distance terrestrial and metro segments of the world.

DWDM is still in the early stages of development. Its deployment in the terrestrial long-haul applications is well-advanced in North America and has occurred over the past two years in Europe. DWDM is just now appearing in long-haul applications in other parts of the world and in metro networks. The metro market is forecasted to grow rapidly, beginning in North America and Europe.

Fixed OADMs have been used in terrestrial long-haul applications for years. However, remotely reconfigurable OADMs offer advantages, particularly in metro networks, where there will be frequent reprovisioning of the systems as carriers gain and lose customers.

Remotely reconfigurable OADMs are more expensive, and their use will depend on the market. Carriers outside of Western Europe and North America, where economies are less developed, might avoid the extra cost.