Slower spending by AT&T, Level 3/CenturyLink results in lower North American optical capex, says analyst

AT&T and CenturyLink have cut back or delayed big purchases of next-generation optical gear. The slower spending trends at these two carriers combined with weak cloud and colocation capital expenditure spending by other providers drove what Cignal AI says is a weaker-than-expected North American optical capex situation. “Anemic cloud and colo optical capex—combined with brutal 200G pricing, weak deployments by incumbent and wholesale vendors, and a decline in long-haul WDM purchases—resulted in lower overall spending during 2017,” said Andrew Schmitt, lead analyst for Cignal AI. “In fact, cloud and colo was the weakest North American customer market for the year; a counterintuitive development considering the priority equipment companies place on it.”