8/5/2008 -- It shouldn't surprise you that the combined telecom/datacom equipment market is enormous, totaling $139 billion last year. And it also shouldn't surprise you that Cisco Systems Inc. continues to dominate the enterprise sector -- along with the entire market -- of the telecom/datacom space.

What might surprise you, however, is who's No. 1 in the service provider segment, where Alcatel-Lucent -- the industry's freshly-minted 800-pound gorilla -- is actually running neck-and-neck with another gorilla, Ericsson. That's the upshot of a new study from market watcher Infonetics Research.

It should be a fractious future, too, according to Infonetics. Combined telecom/datacom sales are projected to grow by more than a quarter (26 percent) over the next three years, eventually reaching almost $175 billion. That's an awful lot of growth, and an awfully big pie for networking vendors to vie fight over.

"While service provider wireless and FMC equipment and enterprise routers, switches and wireless LAN equipment make up the largest portions of revenue, the increases we're seeing in the overall telecom and datacom equipment market are being fueled by the transformation to IP packet networks, as evidenced by strong growth in the IPTV and service provider VoIP and IMS segments," said Jeff Wilson, principal analyst at Infonetics Research, in a statement.

Last year, Cisco led the overall worldwide telecom/datacom market -- generating nearly half of all enterprise revenues -- followed by Alcatel-Lucent and Ericsson. The latter two companies are running neck and neck with one another as leaders of the service provider telecom/datacom equipment segment.

For the year, the Europe/Middle East/Africa (EMEA) region accounted for about one-third of all telecom/datacom equipment sales. In 2008, Infonetics projected, China and India will drive an increasing percentage of carrier capital expenditures "as a result of network construction projects combined with currency appreciation against the U.S. dollar." --Stephen Swoyer