The Optical Transport equipment market has witnessed noteworthy expansion, surging by 14% year-over-year in the second quarter of 2025. This upswing is largely attributable to increased interest in disaggregated WDM and the need for data centre interconnect (DCI) solutions.
“Following six quarters of soft sales in optical transport, it was great to see this market recover and post a strong double-digit growth rate,” said Jimmy Yu, Vice President at Dell’Oro Group. “One area contributing to the strong growth for optical was the rising demand for disaggregated WDM, a concept that arose over a decade ago when both cloud providers and communication service providers wanted to have a more open, vendor-agnostic environment. One where a network operator had more choice in suppliers for transponders, optical line systems, and pluggable optics,” added Yu.
Notable Insights from the 2Q 2025 Optical Transport Report:
- The Optical Transport market's growth can be attributed to an increase in year-over-year revenues from both optical transport systems and ZR/ZR+ optical plugs within IPoDWDM setups.
- The Disaggregated WDM market exceeded forecasts, expanding by almost 35% year-over-year due to solid demand across various technical sectors, including transponder units and optical line systems (OLS).
- Spending by communication service providers also saw a resurgence, with a modest increase from the previous year's figures.
- Cloud providers played a pivotal role, with direct WDM systems purchases seeing a 60% year-over-year growth.
- The top six vendors for the quarter, leading in revenue share, include Huawei, Ciena, Nokia, ZTE, FiberHome, and Cisco.
As the sector advances, the Optical Transport market is poised to leverage ongoing innovations and increasing demands, further propelling its position in the telecommunications landscape.
