ZTE ban depresses 2Q18 optical network systems sales: Dell’Oro Group

The ZTE shutdown dampened overall optical systems sales in the second quarter, according to the Dell’Oro Group. The market research firm states in its new “2Q18 Optical Transport Quarterly Report” that ZTE’s plight contributed to a 13% year-on-year decline in optical network equipment spending in China, which was enough drop the global sales total by -4% versus the second quarter of 2017.

With ZTE back in action, Dell’Oro expects optical network hardware spending to rebound. “The optical transport network equipment market year-over-year decline in 2Q18 was entirely due to fewer sales into China,” said Jimmy Yu, vice president at Dell’Oro Group. “Demand outside of China continued to improve, which is a great sign for the overall market health. Now that the ZTE ban has been lifted, we think optical revenue from China will increase substantially in the second half of the year.”

Dell’Oro points to demand for WDM gear targeted at data center interconnect (DCI) and 200-Gbps wavelengths as growth engines. DCI-related sales jumped nearly 40% from the year-ago quarter thanks to strong demand from U.S. and Chinese based internet content providers. On the 200G front, Dell’Oro has boosted its shipment estimates for the technology, now predicting twice the number of such ports will ship in 2018 versus last year’s number.

From a vendor perspective, Huawei weathered the downturn in China well enough to maintain the top spot in overall market share for the quarter. Ciena and Nokia rounded out the top three.

Dell’Oro’s “Optical Transport Quarterly Report” series covers the optical networking hardware market and provides tables covering manufacturers’ revenue, average selling prices, and unit shipments (by speed including 40 Gbps, 100 Gbps, 200 Gbps, and 400 Gbps). The report also tracks DWDM long-haul terrestrial, WDM metro, multiservice multiplexers (SONET/SDH), optical switch, optical packet platforms, and data center interconnect (metro and long haul).

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