More tea leaves

Trying to get a read on the world’s economy is a tough thing these days– are we in recovery, are we not in recovery, what part of the worldis in recovery, is it a U-shaped recovery, a W-shaped recovery? …

So here’s another tidbit: According to Dell’Oro Group, in the secondquarter sales of optical transport equipment jumped 11 per cent overthe previous quarter to hit US$3.1 billion. That was good news formanufacturers Huawei, Alcatel-Lucent, number one and two, who saw sales growth of 12 and 17 per cent respectively, and ZTE, which saw its sales rocket by 130 per cent. Nortel Network’s sales dropped two per cent compared to the first quarter.

The bad news is that 25 per cent ofthe growth came on sales to the Asia-Pacific region, largely China. Sothat’s another piece of evidence that China is coming out of the recession ahead of everyone else.

Carriers there must believe there are people ready to spend on telecom. “An 11 per cent growth following anear historic sequential decline in the first quarter of the year givesme confidence that the worst may be over for the optical equipmentmarket,” Jimmy Yu, Dell’Oro’s director of optical transport research,said in a news release.

Here’s something else to chew on: China Mobile,the world’s largest wireless company (about 464 million subscribers)has earmarked US$19.6 billion for capital spending next year. There areno reports that the Chinese government has embarked on a “cash for optical clunkers” program.

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