6/18/2009 -- It looks like the economic crunch is affecting the recently crunch-proof service provider routing and switching segment.

To be sure, service provider router and switch sales climbed by 4 percent in Q1 of 2009. However, that amounts to a 13 percent decrease (year-over-year) from 2008's tally.

That's a sure-fire indication of what market watcher Infonetics research dubs "protective behavior" on the part of service provider customers. What's more, it's the steepest such retrenchment in quite some time.

"While the first quarter of every year is typically a down one for the carrier router and switch market, [the first quarter of 2009] showed the deepest sequential decline in years," said Michael Howard, a principal analyst for carrier and data center networks with Infonetics, in a statement.

Howard's prognosis isn't all doom and gloom, however. "[I]f carriers keep to their capital expenditure guidance given for 2009, spending will have to pick up in the second half of the year. With Internet and data traffic growing unabated, service providers are going to have to upgrade their equipment to keep up, or risk losing customers," he said.

On a quarter-to-quarter basis, service provider uptake of carrier-grade routers and switches dropped by 17 percent. Asia-Pacific was the only locale in which service providers significantly stepped up their spending on carrier-grade gear: sales shot up by 11 percent year-over-year and 3 percent sequentially.

Cisco remains the dominant player in the carrier routing space; Infonetics dubs it the "big gorilla," but stresses that "aggressive competition" in the IP core and edge segments is transforming the marketscape, such that carrier-come-latelies Alcatel-Lucent, Huawei and Redback all grew their shares.

Although sales were stagnant, Infonetics cites the ongoing effort on the part of service providers to migrate from TDM- to packet IP-based infrastructures as a bright spot in an otherwise listless market. Internet, mobile, data, broadband and video traffic continues to increase, Infonetics reports, spurring service providers to flesh out their infrastructures accordingly. --Stephen Swoyer