5/20/2008 -- The People's Republic of China isn't just an Asia-Pacific juggernaut when it comes to outsourcing, manufacturing and population density; it's also a consumer giant.

That's especially the case in the red-hot broadband aggregation market segment, where -- according to savvy market watchers -- China is spending four times as much as the next biggest splurger, Japan.

That could translate into a boon -- if short-lived -- for Cisco Systems Inc., Alcatel-Lucent and other players. China's unprecedented broadband expansion will almost certainly taper off, chiefly because the bulk of its spending stems from infrastructure improvements it's making ahead of the upcoming Olympics.

That said, China's 2007 spending on broadband aggregation gear (e.g., MSAPs and IP DSLAMs) just about quadrupled that of Japan and South Korea, according to market watcher Infonetics Research. All told, China last year spent about $1 billion -- 50 percent of a $2 billion overall pie -- on broadband aggregation gear.

"China presents the largest market for broadband aggregation hardware in the Asia-Pacific region as deployments accelerate in the run-up to the 2008 Olympics in Beijing," said Mark Showalter, directing analyst for broadband networks at Infonetics Research, in a statement. "Although the Asia-Pacific broadband aggregation hardware market is the largest in the world, DSL sales in the region flatten after 2008 as services shift from copper- to fiber-based access, as we've already seen in Japan and are starting to see in South Korea."

The numbers are thought-provoking. Right now, the Asia-Pacific region constitutes about one-third of total telecom capex (on a worldwide basis), but more than one-third of total worldwide broadband aggregation equipment spending. The primary driver, as Showalter mentioned, is the shift from copper- to fiber-based services, chiefly represented by IP network transformation projects and boosts in traffic from triple-play services (e.g., video, IPTV, online gaming and P2P).

In the lucrative Chinese market, local giants Huawei and ZTE are No. 1 in the IP DSLAM and MSAP markets, respectively, according to Infonetics, while -- across the rest of the Asia-Pacific region -- UTStarcom is No. 1 in MSAP sales and Alcatel-Lucent is the IP DSLAM leader. --Stephen Swoyer