#United States #Redwood City #optical transport #Dell'Oro Group #WDM

Optical Transport Market Growth in Q2 2025

The Optical Transport infrastructure sector marked a significant resurgence in the second quarter of 2025, buoyed by a robust 14% year-on-year growth. This shift was documented in an analysis from the Dell'Oro Group, a reputable authority in market intelligence concerning telecommunications and associated fields. The driving forces behind this impressive growth were primarily the heightened demand for disaggregated Wavelength Division Multiplexing (WDM) and the continuing investments in Data Center Interconnect (DCI).

Recovery After a Soft Sales Period

Jimmy Yu, Vice President of the Dell'Oro Group, expressed optimism about the market’s recovery after a prolonged period of lackluster sales, which persisted for six consecutive quarters. Yu stated, "Witnessing this market rebound and achieve double-digit growth is a noteworthy development. A crucial factor in this resurgence has been the increasing interest in disaggregated WDM solutions. This innovation emerged over a decade ago, driven by both cloud service providers and telecom operators who sought more flexibility and vendor diversity. It enabled network operators to choose suppliers for transponders, optical line systems, and pluggable optics, ultimately fostering a more competitive environment."

Key Highlights from the Report

The Dell'Oro Group's Optical Transport Quarterly Report painted a vivid picture of market dynamics:
1. Increasing Year-over-Year Revenue: Both optical transport systems and ZR/ZR+ optical plugs designed for IP over DWDM applications experienced a boost in revenue.
2. Disaggregated WDM Outperformance: The segment dedicated to disaggregated WDM blossomed with nearly 35% growth year-on-year, reflecting strong demand across all technology segments including transponder units, Optical Line Systems (OLS), and ZR/ZR+ optics.
3. Resurgence in Communication Service Provider Spending: After a decline, spending among communication service providers saw a slight increase compared to the same quarter last year, reinforcing the sector's recovery.
4. Cloud Providers' Influence: Cloud providers were pivotal in driving optical transport revenue, with direct purchases of WDM systems soaring by 60% year-on-year. This trend underscores the increasing reliance on advanced optical technologies in cloud networking.
5. Market Leaders: The quarter was dominated by six major vendors, ranked by their share of revenue: Huawei, Ciena, Nokia, ZTE, FiberHome, and Cisco, showcasing the competitive landscape of the Optical Transport market.

Details of the Dell'Oro Group Report

The Dell'Oro Group Optical Transport Quarterly Report comprehensively covers market data, including detailed tables that display manufacturers' revenue, average selling prices, and unit shipments by speed—up to 1.6 Tbps. The report tracks various segments of the optical transport landscape, such as DWDM long-haul, WDM metro systems, multiservice multiplexers (SONET/SDH), and distinct DCI approaches, both metro and long-haul.

To secure this vital information, interested parties can reach out to the Dell'Oro Group. With their continued focus on delivering precise quantitative data and insightful qualitative analysis, the Dell'Oro Group remains a fundamental resource for stakeholders in telecommunications and data center infrastructure.

Conclusion

The 14% growth in the Optical Transport market during the second quarter of 2025 not only signals a turnaround for the sector but also highlights the crucial role of innovations such as disaggregated WDM. As cloud computing and telecommunications continue to evolve, understanding these market dynamics will be essential for industry participants aiming to capitalize on the growth potential.